EBF obtains CCAA protection after court grants initial stay over receivership

mThe EBF Group Ltd., a Burlington, Ontario-based non-bank lender with a $27.3 million factoring and loan portfolio, obtained protection under the Companies’ Creditors Arrangement Act on May 13, 2026, after Justice Sean Dunphy rejected, at least for the initial stage, a competing push by secured creditor Brian Vyner to place the company into receivership.

EBF provides working capital financing to SMEs across Canada, including invoice factoring, asset-based lending, short-term and bridge financing, DIP financing, and equipment and other asset-backed lending. The company operates from leased premises in Burlington and has 4 employees in Ontario, including 2 directors and officers who are active in the business. Its factoring business involves approximately 200 account debtors, and the company says active management of borrower relationships, collateral monitoring, collections and enforcement is central to preserving recoveries.

As at March 31, EBF reported unaudited assets of approximately $28.0 million and unaudited liabilities of approximately $28.5 million. Its portfolio consists of approximately $11.1 million of traditional asset-based loans and approximately $16.2 million of invoice factoring contracts across eight borrower relationships.

The company’s financial difficulties trace back to a deterioration in portions of the portfolio following lending expansion in 2023 and 2024. EBF described aging receivables, funding discrepancies, borrower information issues, defaults, litigation and enforcement-heavy recoveries, including problems involving Project X and other non-performing accounts. EBF says its performing portfolio continues to generate approximately $125,000 per month, enough to fund non-debt service operating costs of approximately $100,000 per month, but not enough to service secured debt.

The secured debt stack is divided among three main lenders. EBF’s materials state that Vyner, 1968328 Ontario Inc. (“196 Ontario”) and Fred Hageman’s Holdings Limited (“FHHL”) are owed approximately $21.9 million in the aggregate. Vyner is owed approximately $5.8 million, 196 Ontario is owed approximately $3.0 million, and FHHL is owed approximately $13.9 million. The interaction between the FHHL arrangements, participation agreements and security granted to Vyner and 196 Ontario has created competing claims to portfolio proceeds and potential priority disputes.

Those disputes shaped the battle over process. Vyner’s facility matured on November 30, 2025, and Vyner demanded repayment on December 17. 196 Ontario demanded repayment on December 10, then warned on March 6, 2026 that it intended to seek a court-appointed receiver absent an acceptable forbearance deal. Vyner commenced the receivership application on April 21.

196 Ontario supported Vyner’s receivership application and opposed the CCAA case, arguing that EBF was a closely-held private factoring and lending company funded largely by three private secured creditors, two of whom had lost confidence in management. 196 Ontario also alleged that EBF disclosed its financial crisis only after the fact, refused access to its general ledger, failed to keep reporting commitments, and entered into disputed priority arrangements with Hageman interests. It said a receiver would provide independent control, immediate access to books and records, and a better platform to investigate priority disputes.

FHHL took the opposite view, arguing EBF’s assets are not hard assets but a portfolio of loans, participations and factored receivables owed by third-party borrowers, making orderly collection the core value driver. FHHL said multiple secured creditors hold security over overlapping collateral pools, with priorities governed by intercreditor, participation, subordination and postponement agreements that differ by asset pool. A single CCAA process, FHHL argued, would avoid duplicative professional fees, conflicting mandates and creditor jockeying.

Justice Dunphy accepted that the case was, in substance, about an orderly wind-down rather than a conventional operating restructuring. He noted that all parties were pursuing broadly similar end goals, but disagreed on who should control the process. Justice Dunphy found that the CCAA offered distinct advantages in the circumstances, including a better forum to address the complex capital structure, multiple layers of debt and intercreditor disputes, while allowing EBF’s existing employees to continue administering the portfolio under close monitor oversight.

MNP is the monitor. Counsel is Chaitons for EBF, TGF for the monitor, Harris + Harris for 196 Ontario, Torys for FHHL, Devry Smith Frank for Brian Vyner. GlassRatner was the proposed receiver on Vyner’s competing application.