Wallace & Carey Inc. and Loudon Bros Limited, which operate as a distribution and logistics business across the country, and Carey Management Inc., their ultimate parent company, obtained CCAA protection on June 22. Wallace & Carey and Loudon Bros employ more than 600 full-time and 50 part-time employees, as well as numerous short-term seasonal employees, especially during the summer months. The COVID-19 pandemic created several operational challenges, resulting in significant operating losses and liquidity pressures in the 2021 and 2022 fiscal years, including difficulty in managing or predicting cash flow, a material decline in sales due to the frequent closure of customer stores, larger than normal amounts of inventory being held, and inflationary pressures and driver and labour shortages. In April 2021, Wallace & Carey was forced to vacate from its long-term tenancy at its former Vancouver warehouse, resulting in unexpected costs of over $10 million. Although the companies have taken steps to address their financial challenges, they are unable to address the legacy unsecured trade debt that accumulated during the pandemic which now exceeds $86 million. KSV was appointed Monitor, represented by Cassels. Miller Thomson is counsel for the company, Norton Rose is counsel for CIBC and McCarthy Tétrault is counsel for CWB.

By: Dina Milivojevic