Services Clean d'Oeil Inc., a Saint-Augustin-de-Desmaures, Quebec-based cleaning services company for residential and commercial buildings, serving notably clients in the hotel industry, filed an assignment in bankruptcy on February 8, 2021. In 2019 and 2020, the company acquired material and equipment to develop an expertise in commercial laundry services to be offered to its clients in the hotel industry. The recent pandemic and downturn in the hotel industry forced the company to cease its operations at the beginning of 2021. PwC was appointed bankruptcy trustee. Counsel is McCarthy Tétrault for CIBC, the secured lender, and Langlois Avocats for the trustee.
Kanwal Inc., which is part of an international corporate group based in Magog, Quebec, whose commercial operations include the production of specialty rubber and plastic automotive sealing systems, filed for protection under the CCAA on January 29, 2021, listing approximately $21.6 million in liabilities, including $12.2 million to First West Capital Union and $4.3 million to BMO. In July 2020, the company filed an NOI under the Bankruptcy and Insolvency Act (the "BIA"). Despite multiple extensions of time for filing a proposal, the company was unable to make a proposal to its creditors before the deadline to do so expired on January 30, 2021. As such, the company sought an order authorizing the BIA proceedings to continue under the CCAA. In the longer term, the company is confident that the CCAA proceedings will permit it to complete a proposed senior secured asset-based financing with Waygar Capital Inc. PwC was appointed monitor. Woods is counsel to the company.
Boutique Tristan & Iseut Inc., which operates the Montreal, Quebec-based Tristan fashion brand with 38 stores across Canada, filed for protection under the CCAA on January 20, listing approximately $32.9 million in liabilities, including $1.5 million to the National Bank of Canada. Various factors contributed to the company's financial difficulties. In recent years, Canadian clothing retailers, including Tristan, have faced increasing competition from online and foreign retailers. The COVID-19 pandemic further exacerbated the company's financial situation when the company experienced a further drop in traffic in its brick-and-mortar stores and it was forced to temporarily lay off more than 300 employees. In July 2020, the company filed an NOI under the Bankruptcy and Insolvency Act (the "BIA"), with the time to file a proposal set to expire on January 21, 2021. Although the company's restructuring is largely complete, it is not yet ready to emerge from the restructuring process. As such, the company has sought an order authorizing the BIA proceedings to continue under the CCAA. Since the start of its restructuring, the company has operated in the normal course of business and has tried to stimulate demand by maintaining orders for new seasonal clothing collections. MNP was appointed monitor. Stikeman Elliott is counsel for the company.
Algold Resources Ltd. (TSX: ALG), a Montreal, Quebec-based junior mining company that focuses on the exploration and development of gold deposits in West Africa, filed an NOI on January 15, listing approximately $16.8 million in liabilities, including $9.8 million to Aya Gold & Silver Inc. ("AGS"). The pre-COVID-19 pandemic macro-economic background of gold, including increasing interest rates, stronger USD, and the downward trended price of gold, has led to a challenging financing environment for junior gold exploration projects. In addition, the jurisdiction in which the company operates, Mauritania, has been the object of certain negative perceptions in the industry and among investors that have made it more difficult to attract financing and support. Confronted with various liquidity issues and difficulties in raising debt or equity financing, the company ceased its operations on November 19. In June 2020, IIROC issued a cease trade order against the company. AGS, a Canadian mineral exploration and development company, has notified the company of its interest in providing interim financing during the court-supervised restructuring proceedings. Raymond Chabot is the proposal trustee. Counsel is Lapointe Rosenstein Marchand Melançon for the company and Dentons for AGS.
Studio Black Suede Inc., a Montreal, Quebec-based premium footwear brand, filed an NOI on December 24, 2020 owing approximately $434.0 thousand to CIBC. Litwin Boyadjian is the proposal trustee.
Academie Linguistique Internationale Inc., a Montreal, Quebec-based company that operated a language school for learning French and English, filed for bankruptcy on December 1, listing approximately $1.0 million in liabilities and $130.0 thousand in assets. Since the company's clientele was comprised of mainly students from abroad, the closure of borders in the spring of 2020 forced the company to cease operations. PwC is the Bankruptcy Trustee.
Le Château Inc. (TSX:CTU), a Montreal, Quebec-based fashion retailer with a 60-year history and 121 stores across Canada, obtained protection under the CCAA on October 23, listing approximately $125.0 million in liabilities, including $21.2 million in deferred rent owing to landlords, and $81.0 million in assets. In the three-month period up until July 25, the company made $14.7 million in sales across its network of stores and online, down from $50 million in the same period last year. Since 2015, the company's network had already been reduced by almost 50% to adapt to the changing retail landscape and consumer shopping habits. The ongoing COVID-19 pandemic further impacted consumer demand for the company's holiday party and occasion wear, which represents the core of the company's business. Despite re-opening its stores, the company's brick-and-mortar operations continue to be negatively impacted by COVID-19 safety measures. While the company intends to remain fully operational as it liquidates its stores, eventual closures will mean the termination of approximately 1,400 jobs. During these CCAA proceedings, the company will receive interim financing from Wells Fargo Capital Finance Corp. Canada. PwC was appointed monitor. Counsel is Stikeman Elliott for the company, Norton Rose Fulbright for Wells Fargo, Osler for the monitor, McCarthy Tétreault for Gordon Brothers Finance and Fasken for Gordon Brothers and Hilco.
HOW Fashions International Inc., Montreal, Quebec-based importer and distributor of women’s and men’s high-end fashion brand clothing and accessories, and 9896481 Canada Inc., the owner of certain trademarks related to fashion brands sold by HOW Fashions International Inc., each filed an NOI on October 22. The business suffered drastic financial difficulties as a result of the COVID-19 pandemic, resulting in the brand and the related merchandise having little realizable value. HSBC, the companies' senior secured creditor, engaged EY to assess the companies' operations with the companies' advisors. In August, the companies and their advisors began to implement a recovery and exit plan, including soliciting prospective purchasers for the sale of some or all of the companies’ assets. This resulted in the companies receiving an offer made by Captive Brands Corp. to purchase all of the companies’ intellectual property, as well as assets of its US counterpart, HOW International USA, Inc. The Quebec Superior Court (Commercial Division) granted an Approval and Vesting Order on October 29. EY is the proposal trustee. Counsel is Kugler Kandestin for the companies, Scheib Legal for Captive Brands Corp., Davies for HSBC and Fasken for the proposal trustee.
G.I. Sportz Inc., a Montreal, Quebec-based manufacturer of high-quality paintball products, along with several of its US and European affiliates, were placed in receivership on October 15 on application by GIS Debt Acquisition Partnership ("Partnership"), owed approximately $29.4 million (USD). The company's business was already under considerable stress prior to the emergence of the COVID-19 pandemic, having incurred losses totaling over $45.0 million (USD) since January 2018. Since paintball is a social sport played by a large number of participants, often in teams and in relatively confined areas, the COVID-19 pandemic further exacerbated the company's financial issues due to Canadian and US government policies mandating social distancing. Kore Outdoor Inc., a party related to the Partnership, has agreed to purchase substantially all of the company's Canadian and US assets in exchange for assuming the secured obligations owed by the company to the Partnership. KSV was appointed receiver. Counsel is Davies for the applicant and Cassels and Lapointe Rosenstein Marchand Melançon for the receiver.
Okaïdi Canada, the Canadian subsidiary of a French children's clothing retailer, filed an NOI on October 7, listing approximately $15.8M in liabilities. In 2010, the company entered the Canadian market and currently operates 15 stores in Quebec and Ontario. Given the COVID-19 environment and the impact on the retail sector, the company suffered significant losses and a major reduction in its sales. The company will evaluate its restructuring options in the coming weeks, including having discussions with landlords. Richter is the proposal trustee. Counsel is BDG Law for the company and Stikeman Elliott for the proposal trustee.