Structurlam, CCAA

Structurlam, one of North America's leading manufacturers of mass timber products, had its US Chapter 11 proceedings recognized in Canada on April 27. Founded in 1962 in Penticton, British Columbia, the company has been involved in numerous projects throughout North America, including the University of British Columbia Brock Commons, the Microsoft Silicon Valley Campus in California and several Google campuses. In 2019, the company entered into a contract with Walmart valued at approximately USD $100 million to supply product for a new Walmart home office campus in Arkansas. A local manufacturing facility was constructed and manufacturing began in mid-2022. In November 2022, the company identified a manufacturing error which led to certain product requiring re-manufacturing. Despite extensive negotiations and discussions with Walmart, the companies were unable to reach a resolution and Walmart terminated the contract in January 2023. This event caused a significant liquidity crisis for the company. BMO, the company's senior secured creditor owed approximately USD $50.0 million, agreed to provide additional funds as long as the company hired an investment banker to conduct a marketing process, which the company did. The process has led to a USD $60 million stalking horse bid being accepted from Vancouver-based Mercer International. In conjunction with the bid, insolvency proceedings were initiated in the US and Canada, with Mercer's bid subject to higher and better offers as part of a court monitored auction process. Alvarez & Marsal is the Canadian information officer. Canadian counsel is Gowling WLG for the company, Blakes for BMO and DLA Piper for the information officer.