Muskokaniss Inc. d/b/a Muskoka Nissan et al., Receivership

Muskokaniss Inc. d/b/a Muskoka Nissan et al., which own and operate two Nissan dealerships and one Mitsubishi dealership in Ontario, were placed into receivership on January 28 on application by Nissan Canada Inc., owed over $15.6 million.

The companies have committed several defaults under their loan documents with Nissan which have not been remedied, including sales of vehicles “out of trust” — where proceeds were not remitted to Nissan as the loan documents require — and a failure to make remittances to CRA.

It appears that the companies ran into trouble after certain employees were involved in a criminal fraud on certain banks. The companies were obliged to divert revenues to pay back the banks, leaving insufficient resources to pay other creditors, such as CRA and Nissan.

In November 2024, the parties entered into a forbearance agreement under which Nissan appointed Farber to act as a private monitor. Farber discovered further evidence of additional and ongoing defaults, including misinformation provided as to the amount of the CRA unpaid remittances, as well as parts inventory being overstated and the companies’ books and records being in disarray.

B. Riley Farber is the receiver.

Counsel is McMillan for Nissan, Cassels for the receiver, TGF for the companies, and Miller Thomson for Orilliannis.