Engagements

Mill Street & Co Inc.

On May 12, 2020 by Order (the “Appointment Order”) of the Ontario Superior Court of Justice (Commercial List) (the “Court”), A. Farber & Partners Inc. (“Farber”) was appointed as receiver (the “Receiver”), pursuant to section 243(1) of the Bankruptcy and Insolvency Act, R.S.C. 1985, c. B-3, as amended and section 101 of the Courts of Justice Act, R.S.O. 1990, c. C.43, as amended, without security, of all of the assets, undertakings and properties of Mill Street & Co. Inc. (the “Debtor”) acquired for, or used in relation to a business carried on by the Debtor, save and except for any interest of the Toronto-Dominion Bank in any shares, if any, that may have been pledged by the Debtor in favour of the Toronto-Dominion Bank in respect of the capital stock of All Source Security Container Holding Corporation, All Source Security Container Mfg. Corp. and 2548343 Ontario Inc.

The Appointment Order and motion materials filed in relation to this matter are available below.

Status Updates

The Receiver filed a motion to the Superior Court of Justice (Commercial List) on August 4, 2020 to be heard on August 11, 2020 for an Order approving, among other things, the following:

a) an Order substantially in the form at Tab 3 of the Motion Record:

  • amending the Order granted on May 12, 2020 by the Honourable Mr. Justice Hainey of the Court to remove language pertaining to the Specified Shares;
  • approving the First Report of the Receiver, dated August 4, 2020 (the “First Report”) and the activities of the Receiver described in the First Report;
  • approving the fees and disbursements of the Receiver and its legal counsel for the period up to and including June 30, 2020;
  • sealing the Confidential Appendices to this First Report until further Court order; and

b) such further and other relief as this Court deems appropriate.

In its First Report, the Receiver provided the Court with the following:

  • background information about the Debtor, the Portfolio Groups and these proceedings;
  • an overview of the Receiver’s activities since the Appointment Date;
  • an analysis of each of the Portfolio Groups and the Receiver’s recommendations for monetizing the Debtor’s shares in the Portfolio Groups; and
  • information regarding negotiation of the Proposed Transaction and request Court time for a hearing to approve the Proposed Transaction.

The Receiver seeks an order approving, among other things, the following:

  • amending the Receivership Order to remove language pertaining to the Specified Shares;
  • approving this First Report and the activities of the Receiver;
  • approving the fees and disbursements of the Receiver and its legal counsel up to and including June 30, 2020; and
  • sealing the Confidential Appendices to this First Report until further Court order.

The Motion Record and the First Report can be found below.

On August 11, 2020, the Honourable Justice Koehnen of the Ontario Superior Court of Justice (Commercial List) issued an Order (the “Receiver Order”) against the motion made by the Receiver approving, among other things, the following:

  • amending the Receivership Order to remove language pertaining to the Specified Shares (as defined in the Receivership Order);
  • approving the First Report of the Receiver and the activities of the Receiver as described in the First Report; and
  • sealing the Confidential Appendices to the First Report until further Court order.

On August 11, 2020, the Honourable Justice Koehnen of the Ontario Superior Court of Justice (Commercial List) issued an Order (the “Appeal Order”) against the motion made by 997322 Ontario Inc., 2394419 Ontario Limited, Noah Murad and Roy Murad approving, among other things, the following:

  • lifting the stay of proceedings set out in paragraph 9 of the Initial Order (the “Stay”) for the limited purpose of permitting Noah Murad, in his capacity as President and Chief Executive Officer of Mill Street & Co. Inc., to pursue on behalf of Mill Street the appeal of the Order of Justice Kimmel in the action styled Madison Joe v. All Source Security Container MFG. Corp. et al. and bearing court file number CV-17-588646 (the “Madison Joe Appeal”) but not in respect of any enforcement of a judgment against Mill Street;
  • declaring that the Receiver will have no further obligations and no liability in respect of the Madison Joe Appeal and authorizing Noah Murad, in his capacity as President and Chief Executive Officer of Mill Street, to continue the Madison Joe Appeal; and
  • declaring that Noah and Roy Murad will be liable for all of Mill Street’s legal costs associated with the Madison Joe Appeal, including any negative costs award.

The Receiver Order, Appeal Order and Corresponding email endorsement of Justice Koehnen dated August 11, 2020 can be found below.

On August 21, 2020, the Receiver filed a motion to the Superior Court of Justice (Commercial List) to be heard on August 28, 2020 for:

a. an order (the “Approval and Vesting Order”) to:

  • approve the transaction contemplated by the transfer of all of the issued and outstanding shares in the capital of GNI Management Group Inc., held and beneficially owned by 2534898 Ontario Inc. pursuant to the Share Purchase Agreement by and among, inter alia, the Seller and 2771182 Ontario Inc. and appended to the Second Report of the Receiver to be filed (the “Second Report”), and vesting in the Purchaser the Seller’s right, title and interest in and to the Transferred Shares; and
  • seal the unredacted SPA until further Court order.

b.  an order (the “Fee and Activities Approval Order”) to:

  • approve the Second Report and the activities of the Receiver as described therein;
  • approve the fees and disbursements of the Receiver and Cassels Brock & Blackwell LLP as counsel to the Receiver for the period up to an including June 30, 2020 as set out in the affidavit of Monique Sassi sworn August 3, 2020 and the affidavit of Paul Denton sworn July 30, 2020;
  • approve the fees and disbursements of the Receiver and Cassels for the period from July 1, 2020 through July 31, 2020 as set out in the Affidavit of Monique Sassi sworn August 21, 2020 and the affidavit of Paul Denton sworn August 21, 2020; and
  • seal the unredacted Fee Affidavits until further Court order.

The Notice of Motion can be found below.

On August 25, 2020, the Receiver filed its Second Report to Court (the “Second Report”) in support of, among other things:

  • approval of the SPA and the Transaction and the granting of a vesting order; and
  • sealing the unredacted SPA until further Court order.

The Second Report of the Receiver can be found below.

On August 26, 2020 and August 31, 2020, the Receiver filed its Supplement to the Second Report (the “First Supplement”) and the Second Supplement to the Second Report (the “Second Supplement”) respectively. Both the First Supplement and the Second Supplement should be read in conjunction with the Second Report and are subject to the same qualifications set out in the Second Report.

In the First Supplement, the Receiver is considering the most tax efficient way to transfer the net proceeds from 2534898 Ontario Inc. (the “Seller”), to the Debtor in order to facilitate distributions to the stakeholders. One option is the potential amalgamation of the Seller and the Debtor in order to avoid the need to deal with an intercompany dividend.

In the Second Supplement, the Receiver is of the view that the amalgamation of the Seller and the Debtor immediately prior to closing the Transaction will minimize the adverse tax consequences associated with a significant capital gain on the sale of the shares by the Seller. By amalgamating the Seller with the Debtor, the capital gains can be offset by significant losses of the Debtor. Accordingly, subject to making sure creditors’ rights are maintained, the Receiver believes the amalgamation is in the best interests of all stakeholders and is seeking approval to implement such step in furtherance of the Transaction.

The Second Report, the First Supplement and the Second Supplement can be found below.

On August 31, 2020, the Honourable Justice McEwen of the Ontario Superior Court of Justice (Commercial List) issued the following orders:

1.Approval and Vesting Order, among other things, approving the following:

  • the transfer of all of the issued and outstanding shares in the capital of GNI Management Group Inc., pursuant to the Share Purchase Agreement (the “SPA”) by and among, inter alia, the Seller and 2771182 Ontario Inc. (the “Purchaser”) and the associated transactions contemplated under the form of SPA; and
  • all of the Seller’s right, title and interest in and to the Transferred Shares shall vest absolutely in the Purchaser, free and clear of and from any and all security interests, encumbrances, etc.; and
  • sealing the unredacted SPA until further Court order.

2. Fee and Activities Approval Order, among other things, approving the following:

  • the Second Report and the activities of the Receiver;
  • the fees and disbursements of the Receiver and Cassels Brock & Blackwell LLP as set out in the Fee Affidavits in the Second Report; and
  • sealing the unredacted Fee Affidavits until further Court order.

3. Payment Order, among other things, approving the following:

  • authorizing the Receiver and the current officers and/or directors of the Debtor to amalgamate with the Seller to form a single amalgamated entity; and
  • authorizing the payment to Canadian Imperial Bank of Commerce (“CIBC”) and Fiera Private Debt Fund VI LP (“Fiera”) an amount equal to the secured indebtedness owed to CIBC by the Seller and an amount equal to the secured indebtedness owed to Fiera by the Seller.

The Approval and Vesting Order, the Fee and Activities Approval, the Payment Order and the Endorsement of Honourable Justice McEwen can be found below.

On September 22, 2020, the Receiver filed a motion to the Superior Court of Justice (Commercial List)  to be heard on September 29, 2020 for an Order (the “Distribution Order”) approving, among other things, the following:

  • authorizing and directing the Receiver to make the distribution to Crown Capital;
  • authorizing and directing the Receiver to pay the Canaccord Fee and Expense Reimbursement;
  • authorizing and directing the Receiver to pay the CIBC Legal Fees;
  • authorizing the Receiver to conduct the Lumbermen’s Sale Process;
  • confirming the rights of TD Bank;
  • approving the Third Report of the Receiver dated September 22, 2020 (the “Third Report”) and the activities, actions and conduct of the Receiver set out therein; and
  • sealing the Confidential Appendices in the Confidential Compendium to the Third Report until further order of the Court.

On September 22, 2020, the Receiver filed its Third Report to Court to:

  • provide  the  Court  with an  overview  of  the  Receiver’s  activities  since  the  Second Report;
  • provide the Court with information regarding the closing of the Transaction; and
  • recommend that the Court issue the Distribution Order.

The motion record and the Third Report dated September 22, 2020 can be found below.

On September 29, 2020, the the Honourable Madam Justice Conway of the Ontario Superior Court of Justice (Commercial List) issued an order (the “Distribution Order“) approving, among other things, the following:

  • authorizing and directing the Receiver to make the distribution to Crown Capital;
  • authorizing and directing the Receiver to pay the Canaccord Fee and Expense Reimbursement;
  • authorizing and directing the Receiver to pay the CIBC Legal Fees;
  • authorizing the Receiver to conduct the Lumbermen’s Sale Process;
  • confirming the rights of TD Bank;
  • approving the Third Report of the Receiver and the activities, actions and conduct of the Receiver set out therein; and
  • sealing the Confidential Appendices in the Confidential Compendium to the Third Report until further order of the Court.

The Distribution Order and Endorsement of Justice Conway can be found below.

The Receiver filed a motion to the Superior Court of Justice (Commercial List) which included its Fourth Report on November 6, 2020 to be heard on November 13, 2020 to:

1. Provide the Court with an overview of the Receiver’s activities since the Third Report;

2. Provide the Court with information regarding the Lumbermen’s Sale Process;

3. Recommend that the Court issue an Order (the “Approval and Vesting Order”), inter alia:

  • approving the transaction (the “Lumbermen’s Transaction”) for the sale of all of the issued and outstanding shares (the “Purchased Shares”) in the capital of Lumbermen’s held and owned by the Debtor, pursuant to the stalking horse agreement dated October 20, 2020 (the “Stalking Horse Agreement”) appended hereto, by and among the Debtor as vendor and 2747524 Ontario Inc. as purchaser (the “Purchaser”); and,
  • vesting in the Purchaser the Debtor’s right, title and interest in and to the Purchased Shares.

4. Recommend that the Court issue an Order (the “Administration Order”), inter alia

  •  approving and authorizing the execution by the Receiver on behalf of the Debtor the Minutes of Settlement to be executed(the “Minutes of Settlement”) between the Receiver, the Murads (as defined below) and the Laval family (the “Lavals”) regarding the Debtor’s HVAC portfolio group (the “HVAC Portfolio Group”), as well as any other documents referenced in the Minutes of Settlement and such additional documents as may be necessary, with such minor amendments and additional actions as the Receiver may deem necessary;
  • declaring that no amounts are owing by the Debtor to any of the former employees (the “Former Employees”) of the Debtor’s Fastway portfolio group (the “Fastway Portfolio Group”) pursuant to section 81.4 of the Bankruptcy and Insolvency Act, RSC 1985, c B-3 (the “BIA”); and,
  • approving this Fourth Report of the Receiver and the activities, actions and conduct of the Receiver set out herein;
  • approving the fees and disbursements of the Receiver and Cassels Brock & Blackwell LLP (“Cassels”) as counsel to the Receiver for the period from August 1, 2020 through September 30, 2020 as set out in the affidavit of Paul Denton sworn November 2, 2020 and the affidavit of R. Shayne Kukulowicz sworn November 4, 2020 (together the “Fee Affidavits”), appended hereto as Appendices “2” and “3”; and,
  • sealing the Confidential Appendices in the Confidential Compendium.

The Motion Record dated November 6, 2020 and Receiver’s Fourth Report (without appendices) are set out below.

Lumbermen’s Sale Process

A sale process is being administered by Farber in its capacity as Receiver to identify one or more purchasers of the Lumbermen’s Credit Group Ltd. (Lumbermen’s) Shares.

Lumbermen’s provides a comprehensive range of products and services. Credit products and services include: credit reporting, credit scoring, on line credit reports, access to payment data, corporate searches, construction lien searches, legal claims, lien data and lien registrations, principal reports, insolvency searches, weekly and on-line lien information, registration searches under PPSA or UCC and credit seminars.

On September 29, 2020, the Court granted the Distribution Order authorizing:

  • the Receiver to conduct the Lumbermen’s Sale Process in respect of the Lumbermen’s Shares which includes a provision for entering into a potential stalking horse agreement with any party the Receiver believes is appropriate and for the benefit of the stakeholders prior to the Phase I Bid Deadline; and
  • the Receiver to take such steps as are necessary or desirable to carry out and perform its obligations under the Lumbermen’s Sale Process, subject to prior approval of the Court being obtained before completion of any transaction(s) resulting from the Lumbermen’s Sale Process.

Details on Summary of Sale Process and Acknowledgement of Sale Process are posted below.

Interested parties will have until 5:00 p.m. (Toronto time) on October 20, 2020 to submit an initial expression of interest (“Phase I Qualified Bid”). Participants that submitted a Phase I Qualified Bid must submit a binding offer by 5:00 p.m. (Toronto time) on October 30, 2020.

The Receiver has negotiated a winning bid and transaction and is seeking the Court’s approval of same. Particulars of the winning bid and transaction are set out in the November 13, 2020 Motion Record attached below.

For further information, potential purchasers may contact:

Paul Denton

Email: pdenton@farbergroup.com

Telephone: +1 (416) 496-3773

Angela Liu

Email: aliu@farbergroup.com

Telephone: +1 (437) 317-6056

Creditor Enquiries

For creditor enquiries, please contact:

Angela Liu
Senior Associate | Restructuring
T: 437.317.6056
E: aliu@farbergroup.com

The case updates and court filed documents on this website are for information purposes only and you should consult your financial or legal adviser if you have any questions or concerns about your rights or obligations. Additional updates on the status of these proceedings may become available in the future.

Documents

Receivership Documents

Receivers Reports

Court Orders & Endorsements

Motion Materials

Service List

Lumbermen’s Sale Process