Summit Automotive Group, a group of companies which operate seven car dealerships across Alberta and BC, were placed under CCAA protection on August 22 on application by BMO, owed approximately $58 million.

The Summit Automotive Group’s operated brands are Chrysler, Dodge, Jeep, Ram, Volkswagen, Mitsubishi, Nissan, and Ford, and the dealerships employ approximately 103 individuals in total.

The Summit Automotive Group is in default of its obligations under the BMO loan. These defaults include a significant amount of vehicles having been sold without the proceeds having been paid to BMO. BMO issued a demand but agreed to forbear provided certain conditions were met. The companies have also breached the forbearance agreements, including by continuing to sell vehicles without remitting the proceeds to BMO.

The Summit Automotive Group is suffering significant financial losses which is rapidly deteriorating BMO’s secured position and placing its security in jeopardy. BMO has lost confidence in management’s ability to manage the business and sought a CCAA initial order with enhanced monitor powers to take over the operations of the businesses.

BDO is the monitor and Full Circle Automotive is the CRO.

Counsel is Gowling WLG for BMO and Miller Thomson for the monitor.