Quebec · CCAA
Pre-Filing report of the proposed Monitor
Pre-filing report · 21 November 2023
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What we verified from this filing2 verified
- secured creditorsnote: Approx. $12 million stated in prose (para 2, 'closed to $12 million'); exact figure described as '~$12 million' total principal and interest outstanding under the LSA as of the Application date, excluding costs. Debt originally due June 23, 2023; forbearance agreement extended repayment deadline to October 31, 2023. Amended and Restated Intercreditor Agreement (Dec 23, 2022) confirms HLC as sole senior secured lender re: Respondent's assets. Monitor states HLC's loan was recorded in Trade X's (parent's) financial statements, not the Respondent's, despite Respondent being the borrower. HLC identified as the Respondent's sole secured creditor. · page: 7 · as of: November 20, 2023 (date of Application) · amount: 12000000 · debtor: 13517985 Canada Inc. (d/b/a Wholesale Express) · creditor: Highcrest Lending Corporation (HLC) · currency: CAD · security: First-ranking universal hypothec on the universality of movable property of the Respondent, granted December 22, 2022, registered for $17,250,000 (registration ceiling, not balance owing); Securities Pledge Agreement dated December 23, 2022 by Trade X granting senior security interest in its shares of the Respondent; Guarantee by Trade X (parent/pledgor) of the Respondent's obligations under the LSA
- financial positionnote: Balance sheet (Appendix A) and income statement (Appendix B) filed under seal; underlying figures not disclosed in this report - existence only. Disclosed items: intercompany receivable owing from Trade X to Wholesale Express of $7,543,000; an 'Advance to McGregor' considered unlikely to be collected; assets primarily comprised of intangible assets and goodwill. Monitor notes HLC's ~$12M loan is recorded on Trade X's books rather than the Respondent's despite Respondent being borrower, and that key information regarding historical transactions and related-party dealings is unclear. · page: 9 · as at: 2023-09-30 · basis: Unaudited, internally prepared financial statements compiled by the Company (no supplemental information, disclosures or notes); not audited or reviewed by an independent accountant; balance sheet and income statement filed under seal as Appendix A/B · scope: 13517985 Canada Inc. (d/b/a Wholesale Express) standalone unaudited balance sheet as at December 31, 2022 and September 30, 2023; Wholesale Express's financial statements are otherwise consolidated within parent Trade X Group of Companies Inc.'s consolidated financial statements · currency: CAD