Wow Air, an Iceland-based airline carrier company that specialized in ultra-cheap flights between North America and Europe, was deemed bankrupt on March 28 by the Icelandic court and ceased operations, leaving thousands of customers stranded or out-of-pocket for future flights. On May 13, the Office de la protection du consommateur (OPC) appointed PwC as claims adjudicator of the claims submitted to the Compensation Fund for Customers of Travel Agents, a financial protection plan administered by the OPC that protects customers who purchased services through licensed travel agencies in Quebec.
Imperial Tobacco, a Montreal, Quebec-based cigarette company that manufactures tobacco products for brands such as Marlboro and Pall Mall, filed for protection under the CCAA on March 12. The company leads the tobacco industry with roughly 48% market share of all legal sales in 2018. The two other major Canadian manufacturers and distributors of tobacco products are Rothmans Benson & Hedges and JTI-Macdonald, the latter of which was granted court protection under the CCAA on March 8. The company is currently facing an existential threat from litigation across Canada, including multiple class actions and government claims seeking to recover health care costs (collectively, the "Tobacco Litigation"). Earlier this month, the Quebec Court of Appeal upheld a 2015 ruling in a lower court that found the tobacco companies concealed the health risks of smoking from the public. The plaintiffs in the Tobacco Litigation are seeking hundreds of billions of dollars in damages, which significantly exceed the company's total assets. FTI Consulting was appointed monitor. Counsel is Osler for the company and Davies for the monitor.
Avara Boucherville Pharmaceutical Services, a Boucherville, Quebec-based international pharmaceutical services company that delivers world-class contract manufacturing and technical services to the pharmaceutical industry, was placed in receivership on February 18 on application by Sandoz Canada, another pharmaceutical company. EY was appointed receiver. Miller Thomson is counsel to the applicant.
Sural Québec ("SQ"), a Victoriaville, Quebec-based greenfield plant that manufactures and commercializes aluminum rods, and Sural Laminated Products of Canada ("SLPC"), a Becancour, Quebec-based rod plant, filed for protection under the CCAA on February 11, listing approximately $142.0MM in liabilities, including $39.3MM to Investissement Québec and $41.3MM to BMO. The two companies are part of a large global group of privately owned companies operating four rod mills in the aluminum sector. In 2014, this group acquired the Becancour plant from Alcoa Canada and entered into a 10-year supply contract with it to provide SLPC with 100,000 metric tons per year of molten aluminum. SQ has experienced higher losses than forecast primarily because of schedule delays caused by, amongst other things, the death of a worker and construction cost overruns. The problems experienced by SQ impacted the SLPC operations. Furthermore, in fall 2018, Alcoa informed SLPC that its molten metal production would no longer be sufficient to meet SLPC's demand. Compounding these existing issues, the US announced in May 2018 that tariffs of 25% on imports of Canadian steel and 10% imports of Canadian aluminum would take effect on June 1, 2018. These tariffs significantly increased working capital pressures on the group as it scrambled to negotiate price concessions with its metal supplier and price premiums with its clients. By February 2019, SLPC's indebtedness to Alcoa increased to approximately $40.0MM, and it sent the company a notice requesting payment. PwC was appointed monitor. Counsel is Norton Rose Fulbright for the companies, Fasken for PwC, BLG for BMO and Lavery de Billy for Investissement Québec.
Lanla, a Montreal, Quebec-based marketing research company, and Wizper, a digital advice management mobile app driven by customer experience-focused AI technology that is backed by Lanla's 15 years of customer experience expertise, filed NOIs on February 1. EY is the proposal trustee.
Taxelco, a taxi company founded in 2015 with the objective of being an environmentally and socially-friendly tax service, obtained protection under the CCAA on February 1 on application by National Bank, owed approximately $10.2MM. In February 2018, the Caisse de dépôt et placement du Québec, the FTQ Solidarity Fund, Fondaction CSN and XPND Capital agreed to inject $17.0MM into the company to grow its Téo Taxi fleet of electric cars. When it became clear, however, that the firm's financial outlook would not improve, the investors refused to provide any more capital. Richter was appointed monitor. Counsel is Stikeman Elliott for the applicant, McCarthy Tétrault for the monitor and Norton Rose Fulbright for the company.
Pizza Salvatore, a Thetford Mines, Quebec-based pizza restaurant franchise with more than 12 restaurants in operation in Quebec, filed for bankruptcy on January 17, listing $761.0M in liabilities. Raymond Chabot is the bankruptcy trustee.
V.A. Transport, a Boucherville, Quebec-based company that provides transportation, distribution, warehousing and related logistical support services for furniture, household appliances and electronics industries, filed for protection under the CCAA on December 21, listing $16.3MM in liabilities, including $6.4MM to BDC and $2.3MM to Roynat. The company, which has a 40-year history, has been experiencing a decline in profitability since 2012 due to a slowdown in the furniture industry and increasing competition from online US commercial transport companies. Furthermore, the company's fleet of registered vehicles is ageing, which means that a significant investment will be required to renew this fleet. Raymond Chabot was appointed monitor. Counsel is Norton Rose Fulbright for the company and Miller Thomson for Roynat and BDC.
Group Collette, a Montreal, Quebec-based general contractor for commercial, industrial and environmental construction projects, filed an NOI on December 7, listing $15.0MM in liabilities, including $12.0MM to 89591089 Quebec. The major shareholder of Group Collette, 8317399 Canada, also filed an NOI on December 7, listing $16.6MM in liabilities. Houle Roy is the proposal trustee.
Carpet Art Deco, a Montreal, Quebec-based manufacturer and distributor of carpets and rugs, filed an NOI on November 29, listing $53.9MM in liabilities, including $28.2MM to CIBC and $10.7MM to BDC. The company reported a loss of approximately $7.0MM for the eleven months ended August, which it attributed to difficulties arising from its efforts to expand its business in the United States and modifications to the current international trade policies. Richter was appointed proposal trustee and has launched a sale and solicitation process for the company's business. Counsel is BLG for the company, Stikeman Elliott for the proposal trustee, McCarthy for CIBC and Miller Thomson for BDC.