V K Delivery & Moving Services Ltd. et al., CCAA

V K Delivery & Moving Services Ltd. et al. (the “VK Group”), a British Columbia-based group of companies that provide freight delivery, storage, and logistic services, obtained CCAA protection on May 16.

The business was founded by Ved Kaler in 1998. Mr. Kaler initially made his own deliveries but grew the business over 25 years to employ over 100 employees and 80 owner-operator truck haulers.

The VK Group’s cash flow has been adversely affected by factors including increased labour costs and an internal malfeasance issue that the company claims resulted in significant overpayments to certain contractors over a period of several months. Management has terminated the employee and identified numerous troubling transactions but hasn’t yet quantified the losses or considered recovery options.

As a result, the VK Group has been unable to generate sufficient funds to service its loan from senior secured creditor RBC and is in default of its credit facility with RBC. RBC issued a demand in February and subsequently filed a receivership application, which has impacted the VK Group’s efforts to secure alternative refinancing.

The purpose of the CCAA proceedings is to restructure the VK Group’s financial affairs, continue the business, seek refinancing and/or raise equity.

Crowe MacKay is the monitor.

Counsel is Lindsay Kenney for the VK Group and MLT Aikins for RBC.