The Teal Jones Group, a group of Surrey, British Columbia-based lumber companies with operations in Canada and the US, obtained CCAA protection on April 25.

The companies have been operating since 1946, when Jack Jones returned home from World War II and started the business with a one-man cedar mill. Teal Jones is now wholly-owned by his sons, Dick and Tom Jones, and is the largest privately-held forest products company operating in the West Coast of Canada, holding assets of approximately $732.1 million as at February 29.

The companies have been faced with reduced liquidity in their operations as a result of, among other factors, the drop in lumber prices, inflationary pressures and escalating interest rates.

In November 2023, the companies defaulted on certain covenants under their loan with Wells Fargo, resulting in a period of forbearance during which the companies had to meet certain accommodation milestones.

In December 2023, the companies engaged PwC to assist in considering refinancing or restructuring options. Wells Fargo engaged EY to conduct a review of the business. Ultimately, the companies were unable to meet all of the accommodation milestones, and the lenders were unwilling to grant further accommodations.

The companies intend to run a SISP as part of the CCAA proceedings and have sought recognition of the CCAA proceedings as foreign main proceedings under Chapter 15 of the US Bankruptcy Code.

PwC is the monitor. Counsel is DLA Piper for the companies, Dentons for the monitor, Blakes for RBC, Bennett Jones for Wells Fargo and EDC, and BLG for BDC.

By: Dina Milivojevic