Bell Canada secures urgent receiver appointment over SmartONE Solutions

Bell Canada obtained an urgent order on December 11, 2025 appointing PricewaterhouseCoopers Inc. as receiver and manager of all assets, property, and undertakings of SmartONE Solutions Inc., after the Ontario Superior Court of Justice concluded the company could not meet imminent payroll obligations and lacked any viable short-term funding plan. Justice F.L. Myers granted the relief following a same-day hearing, despite limited notice to SmartONE, finding that delay would result in an immediate business failure with significant downstream risks to residential customers and developments.

SmartONE is an Ontario-based provider of smart-building and smart-community technology for multi-residential developments, including in-suite hubs, access controls, HVAC monitoring, security devices, and property-management software integrated with Bell Canada’s network infrastructure. Since 2020, SmartONE and Bell Canada operated under a collaboration model in which Bell installed network wiring during construction while SmartONE supplied, installed, and supported its proprietary hardware and software, presenting developers with a combined offering.

The collaboration produced several hundred development contracts, though only about 100 projects had reached completion. Bell advanced substantial milestone payments in advance of completion, paying approximately $16 million in respect of projects still underway, secured by a general security agreement granting Bell a security interest over all present and after-acquired personal property of SmartONE.

SmartONE’s liquidity crisis intensified through 2025 as sales declined alongside the Ontario condominium slowdown and the company struggled with weak financial reporting systems that required restatements. By mid-2025, SmartONE lacked sufficient cash to purchase equipment needed to meet installation obligations, prompting developer complaints to Bell about delayed projects.

In July 2025, SmartONE requested a $2 million advance from Bell to fund inventory purchases. Bell offered emergency financing subject to a forbearance arrangement after SmartONE declined initial terms it viewed as onerous. Following further deterioration, Bell issued a notice of default and a notice of intention to enforce security under section 244 of the Bankruptcy and Insolvency Act on October 3, 2025.

Bell ultimately advanced $2 million under the forbearance terms and an additional approximately $800,000 for priority projects, subject to strict use restrictions and PwC oversight. PwC later reported that portions of those funds were used on non-approved projects and that approximately $200,000 was swept by The Bank of Nova Scotia to reduce SmartONE’s operating line, a credit facility that had already exceeded its approved limit without Bell’s knowledge.

SmartONE failed to secure the required $2 million third-party refinancing by November 21, 2025, causing the forbearance period to expire on December 1, 2025. By the week of the hearing, SmartONE could not fund payroll due December 15, with its payroll processor requiring funds by the morning of December 12 and no remaining borrowing capacity available.

The Court placed significant weight on the operational and public-interest risks associated with a sudden shutdown. SmartONE had installed equipment in more than 20,000 occupied residential units, with another 40,000 units awaiting installation across future projects. A failure of the business risked loss of control over critical systems such as door locks and HVAC controls, as well as delays that could prevent developers from obtaining occupancy and HVAC permits.

Bell also pointed to reputational exposure arising from its joint marketing with SmartONE and its reliance on the continuity of SmartONE’s proprietary software. Bell advised the Court it was prepared to fund a receivership process, but was unwilling to advance further funds while existing management remained in control.

Justice Myers rejected SmartONE’s request for an adjournment to retain counsel, finding that while notice was short, SmartONE had long been aware of the impending crisis and had taken no steps to secure financing or present a credible plan to meet payroll. The Court held that even if SmartONE later pursued claims against Bell for alleged bad-faith conduct, such claims offered no solution to the immediate funding shortfall.

The Court concluded there was no practical alternative to appointing a receiver with immediate access to funding, emphasizing that a limited or interim appointment would not stabilize the business or restore market confidence. Bell’s willingness to provide up to $4.4 million in receiver financing was central to the decision, enabling payment of wages, purchase of equipment, and continued operation while PwC seeks a longer-term solution.

Bell Canada is represented by Reconstruct and special counsel Gowling WLG. PwC is represented by Blake, Cassels & Graydon.