Woodlore International Inc. and Ébénisterie St-Urbain Ltée, family businesses specializing in the manufacture, sale and distribution of kitchen and bathroom cabinets and office furniture, obtained CCAA protection on May 12. Despite strong growth over the years, Ébénisterie St-Urbain has encountered liquidity problems in recent months, mainly due to a significant temporary reduction in orders from its main customers, including RONA, Réno-Dépôt and Lowe's Canada. In addition, the acquisition of Woodlore put considerable pressure on the companies' liquidity, due in part to a major lawsuit instituted by one of Woodlore's largest historical clients, which was initiated three months after the acquisition. On May 10, the companies’ lender, HSBC, blocked the electronic funds transfers by which the companies pay all suppliers and all of their 341 employees. Despite these temporary issues, the companies are currently experiencing an impressive volume of orders and have a well-stocked backlog. They are confident that an operational restructuring will enable a successful recovery and ensure profitable growth for the benefit of all their stakeholders. Raymond Chabot has been appointed Monitor, represented by Stikeman Elliot. McCarthy Tétrault is counsel for the companies, Davies is counsel for HSBC, Norton Rose Fulbright is counsel for Fiera Capital, Lavery is counsel for IQ, Miller Thomson and Blaney McMurtry are counsel for BDC, and Langlois and Minden Gross are counsel for William James Phillips, Sr. and William James Phillips, Jr.
By: Dina Milivojevic