Louis Garneau Sports, a Saint-Augustin, Quebec-based manufacturer of sports apparel and equipment, filed an NOI on March 3, listing $32.8 million in liabilities, including $11.4 million to RBC and $6.4 million to Investissement Québec. Founded in 1983 by Louis Garneau, a Canadian Olympic cyclist, the company quickly grew to become a leading brand in the cycling industry. The company attributes its current financial difficulties to challenging market conditions as well as the bankruptcies of two of its larger international customers. Raymond Chabot is the proposal trustee.
Senvion GmbH, a German manufacturer and seller of wind turbine equipment and technology with global operations including in Canada, had its German insolvency proceedings recognized in Canada under the CCAA on February 26. In April 2019, the company filed for insolvency in Hamburg under the German equivalent of debtor in possession restructuring proceedings. With the bulk of its business having been sold, the company has now moved into a liquidation phase where it is incumbent upon management to realize the value in the remaining assets. The company has asked for Canadian recognition of the German proceedings so that creditors will have access to the German claim process. Fuller Landau was appointed as information officer. Counsel is Spark for the company and Gardiner Roberts for the information officer.
Le Cordée, a Montreal, Quebec-based sports and outdoor goods retailer operating five stores in Quebec, filed an NOI on February 21, listing $22.2 million in liabilities, including $10.4 million to National Bank, $857.3 thousand to Arcteryx, and $839.0 thousand to North Face. The company is focused on its transformation, which will include refinancing its operating facility with another lender. MNP is the proposal trustee. EY is financial advisor to the company. PwC is financial advisor to National Bank. Counsel is Norton Rose Fulbright for the company and McCarthy Tétrault for National Bank.
Stokes, a Montreal, Quebec-based tableware, kitchenware, and home décor retailer with 147 stores across Canada, filed an NOI on February 18, listing $22.9 million in liabilities, including $9.7 million to Scotiabank and $2.3 million to HSBC. For the last few years, the company has been experiencing financial difficulties due to increasing competition from large-scale and online retailers; successive minimum wage increases across Canada; and high cost of rent in various locations. In 2019, the company reported financial losses of approximately $4.5 million, which were mainly attributable to operational issues following the implementation of a new warehouse management system. These issues led to a significant increase in the company's borrowings and a breach of certain loan covenants with Scotiabank. In order to reduce its retail footprint and streamline head office operations, the company intends to close 43 stores and liquidate inventory, furniture, and equipment located in the closing stores. FAAN Advisors has been retained as Chief Restructuring Advisor. Tiger and Great American will jointly assist with the inventory liquidation. Richter is the proposal trustee. Osler is counsel to the company.
Rebuts Solides Canadiens, a Montreal, Quebec-based waste disposal company, along with certain other related companies, obtained protection under the CCAA on February 3, attributing its liquidity issues primarily to the decline in the recyclable materials industry. In particular, as a result of China's new recycling ban, the value of recycled materials has dropped dramatically in recent years. The price per ton of mixed paper fell from $121 in mid-2017 to $34 in November 2019. The Quebec government has authorized a $7.0 million loan to the company. The Ministry of Sustainable Development, Environment, and Fight Against Climate Change will provide $5.0 million, while RECYC-QUÉBEC will provide the remainder of the loan. PwC was appointed monitor. Fasken is counsel to the company.
Freemark Apparel Brands, a Montreal, Quebec-based retail company that operated Bench stores across Canada, filed an NOI on January 21, listing $41.0 million in liabilities, including $15.1 million to Accord Financial, $4.5 million to Gordon Brothers, and $1.5 million to Briva Financial. According to reports, the company will be shutting down all 24 of its brick-and-mortar stores as part of the restructuring and will shift its focus to the e-commerce side of its business. Richter is the proposal trustee.
Gestion Knighstbridge, a Montreal, Quebec-based residential real estate developer, was deemed bankrupt on January 9, listing $2.9 million in liabilities, including $373.6 thousand to RBC. The company had previously filed an NOI on November 15. The company attributes its financial difficulties to numerous factors that negatively impacted its cash flow, including delays in obtaining approvals from municipal authorities which postponed the launch of ongoing projects; an increase in construction costs and shortage of skilled labour; and cost overruns on certain projects. Richter is the bankruptcy trustee.
Nemaska Lithium (TSX: NMX), a Montreal, Quebec-based minerals mining company, obtained protection under the CCAA on December 23. The company is is in the process of developing a mine in the James Bay Region of Quebec that it hopes will enable it to become one of thew world's most significant lithium salts producer and supplier to the emerging lithium battery market. To date, over $616.0 million has been spent on construction and engineering costs, funded by a combination of debt and equity from government and private sources, including Softbank. In February 2019 it was determined that additional funds of approximately $375.0 million were required to complete construction of the mine and processing plant. Significant efforts were undertaken to find investors, buyers or partners but to date no binding agreements have been reached. Despite a strong long-term outlook for lithium, prices have recently plummeted as a result of increased supply, primarily from Australia, where producers have lower extraction costs and are in closer proximity to the Chinese markets. The mine is currently in a care and maintenance program as the company seeks to conserve cash while it evaluates its restructuring options. PwC is the monitor. Counsel is McCarthy Tétrault for the company, Goodmans and Woods for Nordic Trustee AS, Miller Thomson for Bird Civil & Mines, Torys for OMF Fund II (N) Ltd., Dentons for Chubb Insurance, Norton Rose Fulbright for Investissement Québec and Lavery for Allied World Specialty Insurance
8318085 Canada, a Montreal, Quebec-based company which designs, imports and distributes women’s outerwear garments, its main focus being coats, filed an NOI on December 17, listing $10.8 million in liabilities, including $2.1 million to RBC and $1.1 million to Jiangsu Sainty Glorious Trade. Several factors led to the company’s insolvency, including a reduction in sales as well as the introduction of a new software system that resulted in inaccurate reporting of the business’ performance. Although the company is currently still in operation, it must promptly complete its activities related to the spring and winter 2020 seasons - such as booking orders and making purchases - in order to maintain viability. As part of the restructuring, the company will undergo a sale and solicitation process to market the business to potential acquirers, investors, or strategic partners. KPMG is the proposal trustee. Kugler Kandestin is counsel to the company.
Fortress Global Enterprises (TSX: FGE), a Montreal, Quebec-based company engaged in the dissolving pulp business and the renewable energy generation sector, obtained protection under the CCAA on December 16. Previously known as Fortress Paper, the company changed its name in 2018 to reflect its intention to shift away from traditional pulp and paper operations and pursue opportunities in new business segments. The majority of the company's revenues is now derived from the production and sale of dissolving pulp, a product with a variety of commercial applications, including the production of rayon textile fibres. The market for dissolving pulp, however, has not been favourable for the company, with prices dropping from almost $950 USD per ton in 2017 to $640 USD per ton this year. Other factors have also contributed to the company's financial difficulties, including the recent Sino-American economic conflict which is disrupting markets and the garment sector which Fortress serves. In the past three years, the company has lost approximately $246.6 million. In consultation with its senior secured lenders, the company launched a sale and investment solicitation process in August 2019 with the assistance of Houlihan Lokey but to date has failed to receive any indications of interest. With no liquidity to operate in the normal course, the company's senior secured lenders, Investissement Québec (IQ) and Fiera, made an application on the company's behalf for creditor protection. While under creditor protection, it is anticipated that the company's pulp mill will be indefinitely idled while the company waits for market conditions to improve. Concurrently, the company will explore other ways to return to profitability, including potentially modernizing and upgrading its current facilities with the assistance of a new investor. Deloitte is the monitor. Counsel is BCF for the company, McCarthy Tétrault for the monitor, Stikeman Elliott for IQ, Miller Thomson for Fiera, Blakes for International Forest Products and Goodmans for Computershare.