13517985 Canada Inc. o/a Wholesale Express, CCAA

13517985 Canada Inc. o/a Wholesale Express, a Sainte-Marie-Madeleine, Québec-based company which operates an online trading platform for pre-owned cars, obtained CCAA protection on December 20, on application by Highcrest Lending Corporation, owed approximately $12 million. On December 22, the company’s parent, Trade X Group of Companies Inc., as well as certain other Ontario-based subsidiaries (collectively “Trade X et al.”), were placed into receivership on application by MBL Administrative Agent II LLC as agent, owed over US$15 million. Highcrest has a first-ranking interest over Wholesale Express, while MBL has a first-ranking interest over Trade X et al. The CCAA proceedings and receivership proceedings are taking place concurrently. The Trade X group is primarily involved in operating a business-to-business vehicle trading platform for car dealerships to purchase inventory from Canada and other overseas markets. The group’s financial position deteriorated over 2022 due to the steep decline in car prices, operation inefficiencies and the general reduction of available capital in the investment community. In January 2023, Trade X engaged Canaccord Genuity to assist in a share sale of Wholesale Express. A potential purchaser was located and management prepared a proposed waterfall distribution of proceeds, but the parties to the waterfall did not agree on the proposed distribution. The transaction is at an impasse and Highcrest has lost confidence in the ability of Trade X and its management. MBL has similarly lost faith in the management of the Trade X group, taking the position that the group has diverted millions in funds payable to MBL. KPMG is the monitor on the Wholesale Express CCAA, and counsel is Stikemans for Highcrest. FTI is the receiver on the Trade X et al. receivership, and counsel is Davies for MBL, Dentons for Trade X et al., Goodmans for the receiver and McCarthys for Aimia.

By: Dina Milivojevic