Tung Air Transport Ltd. et al., Receivership

Tung Air Transport Ltd. et al., a group of Ontario-based, family-owned companies which operate a trucking services business across North America, were placed into receivership on April 14 on application by RBC, owed approximately $18 million.

At its height in 2022, Tung Air grew to annual revenues of approximately $17 million, with less trucks and tractors because the market was more favourable at that time. However, the business faced cash flow difficulties and is now reduced.

Recently, the companies had approximately 35 of their trailers seized by Carrier Systems because of a payment dispute about storage fees. This impacted the companies’ business as clients stopped paying accounts and deductions were applied to balances owing to account for costs incurred by clients to recover goods in the trailers.

In January, RBC issued formal demand for payment. The companies did not dispute the debt, but took the position that the bank was over secured and that they should be given till the end of May to obtain new financing. The Court found that it was just and convenient to appoint msi Spergel as receiver, finding that the companies could not finance going concern operations should a receiver not be appointed at this time.

Counsel is Aird & Berlis for RBC, BLG for the receiver and Kramer Simaan Dhillon for the companies.