OKR Group of Companies, CCAA

OKR Group of Companies, a group of Alberta-based funds created to provide short-term financing to borrowers based on their participation in government tax credit and grant programs, obtained CCAA protection on March 7.

The funds to provide these loans came from investors that purchased units in a trust or limited partnership operated by the OKR Group. In total, there are approximately 1,475 investors with investments ranging in size from approximately $500 to $11.6 million.

Since the creation of the funds, the founding partners have allegedly failed to adhere to the terms of the underlying fund documents, exhibited a lack of governance and controls, and failed to adequately account for the funds raised. This conduct has resulted in the intermingling of monies amongst certain funds, as well as a material decrease in the funds raised and reinvested compared to the current net asset value of the funds.

Several of the funds provide unit holders with a right to redeem at a fixed price. Due to their current net asset value, there is not enough money in the funds to pay out all unit holders should each unit holder exercise their right to redeem. This has resulted in a race to the finish of the funds. The purpose of the CCAA proceedings is to address this problem and resolve the inequities that have resulted amongst the unit holders.

PwC is the monitor.

Counsel is Lawson Lundell for the companies.