CCA Industries Inc V.CAW.P

From an Insolvency publication reporting today...

[AndyNewmark]

Distinct Infrastructure Group (TSX:DUG), a Toronto, Ontario-based infrastructure provider for Canadian utilities, municipal and provincial governments, was placed in receivership on March 11 on application by RBC, owed approximately $53.4MM. The company's major customers include Rogers, Bell, Manitoba Hydro and the Manitoba Water Services Board. RBCrecently became aware that the company had significantly misstated its borrowing base calculations and accounts receivable in its reporting to RBC. This resulted in the company obtaining advances under an operating line of credit of at least $30.0MM more than was otherwise permitted under credit facilities available to the company. In December 2018, the company informed RBC that it and one of its subsidiaries,  iVac West, wished to place certain of their equipment for sale with Richie Bros. Auctioneers. RBC agreed that the company would initially apply $2.0MM from the proceeds of the auction against the obligations owed to RBC. In January 2019, the company applied for an order directing Richie Bros. to distribute the sale proceeds to RBC. This application was stayed upon the granting of the receivership order. The appointment of a receiver was necessary as the company is currently experiencing a severely stressed liquidity position and does not have sufficient cash to support its ongoing operations. Deloitte was appointed receiver. Counsel is TGF for RBC, Stikeman Elliott for a special committee of the company and Aird & Berlis for the receiver.