QM GP Inc. and Highpoint Environmental Services Inc., CCAA

QM GP Inc. and Highpoint Environmental Services Inc., Burlington, Ontario headquartered environmental and industrial services companies, obtained CCAA protection on July 29.

The companies are members of a larger group (the “QM Group”), which has been providing a wide range of demolition, remediation and emergency response services across Canada for over 40 years. The QM Group has over 400 employees and operates from eight leased facilities across Canada. At the time of the CCAA filing, the QM Group had approximately 250 active projects.

Despite the QM Group’s success, severe working capital and liquidity issues have caused a strain on the borrowing base under the QM Group’s credit agreement with BNS, resulting in the QM Group being unable to pay its obligations in the ordinary course. These liquidity constraints have resulted in significant arrears becoming owing to subcontractors and suppliers, and have recently caused disruptions on a number of active project sites due to suppliers and vendors refusing to supply services until payments are made.

BNS is currently owed approximately $34.3 million, while unsecured creditors are owed approximately $47.4 million.

The purpose of the CCAA proceedings is to review the portfolio of projects, disclaim unprofitable contracts and develop a SISP. WeShall Investments is providing a DIP loan.

A&M is the monitor.

Counsel is Reconstruct for the companies.