Chesswood Group Limited (TSX:CHW) et al., CCAA

Chesswood Group Limited (TSX:CHW) et al., a group of Ontario-headquartered financial services companies that provide loans to small businesses and consumers across Canada and the US, obtained CCAA protection on October 29, on application by RBC as agent for a group of lenders (the “Lenders”), owed approximately US$66 million and C$93 million.

The Chesswood Group has been suffering from poor financial performance over the past 18 months or longer, due in part to rising interest, operating costs and portfolio write‐downs, all of which have caused a decline in profitability. In addition, a recent audit revealed a significant deficiency (approximately US$92 million) in the borrowing base under the companies’ credit facilities.

The Lenders have agreed to multiple successive waivers during which the Chesswood Group completed several sale transactions. However, to date, it has been unable to effect sales of a large part of its business.

The companies have sought recognition of the CCAA proceedings under Chapter 15 of the US Bankruptcy Code. 

FTI is the monitor.

Counsel is Blakes for the Lenders, McCarthy Tétrault for the Chesswood Group and Osler for the monitor.