Brock & Visser: the funeral home sold, then a bankruptcy on Roynat's motion

For several decades, in its trustee's account, the funeral home at 845 Devonshire Avenue served Woodstock, Ontario and the communities around it, from a building the company owned. Two principals own the company; they bought the business in early 2024, per the Preliminary Report, Sept. 23, 2026, p. 1. On July 7, 2026, the day a court-approved sale of the business closed, the receiver filed articles of amendment and Brock & Visser Funeral Home Burial & Cremation Services Ltd. became 1000844040 Ontario Inc. The purchaser had taken the company's "right, title and interest in and to the name 'Brock & Visser Funeral Home' (and any variation of same)," per the Second Report, Aug. 5, 2026, paras. 7–8, 18.

MNP Ltd., the receiver, assigned the numbered company into bankruptcy on September 3 under an order Roynat Inc. had obtained in July, and became its trustee. Twenty days later it told creditors that the Bank of Nova Scotia expected a deficiency on its security and that nothing was anticipated for unsecured creditors, per the Preliminary Report, Sept. 23, 2026, pp. 2, 4. Between the sale and that report sits the receiver's Second Report, which told the court that MNP would make the assignment before distributing any sale proceeds, and set out what that sequence would do to the Canada Revenue Agency's claim for unremitted HST, per the Second Report, Aug. 5, 2026, paras. 66–69.

A receivership order that waited on two dates

Roynat applied under s. 243(1) of the Bankruptcy and Insolvency Act and s. 101 of the Courts of Justice Act, and Justice Carroccia heard the application in Woodstock on December 12, 2025, with counsel for the company appearing. The order appointing MNP receiver of the company's assets and the Devonshire Avenue land was to take effect only on an "Appointment Event": no purchase and sale agreement satisfactory to Roynat by January 15, 2026, or, by February 13, 2026, the debt to Roynat and the Bank of Nova Scotia not paid in full and no evidence satisfactory to Roynat that the company's CRA accounts were current on remittances and filings, per the Receivership Order, Dec. 12, 2025, paras. 2–3, 5. The debt included the fees of a monitor appointed by a separate order that day; the monitor was MNP, discharged in that role once either an appointment certificate or a certificate of payment was filed, per the Receivership Order, Dec. 12, 2025, paras. 3–4, 30–31.

Roynat's lawyers, Harrison Pensa LLP, certified on January 16, 2026 that an Appointment Event had occurred, per the Appointment Certificate, Jan. 16, 2026, p. 1, and MNP took possession the same day. Its statutory notice of January 26 put Roynat's claim at $3,930,000, the Bank of Nova Scotia's at $400,000 and the CRA's secured claims at $303,800, with total creditor claims of $5,407,112. The plan was to keep the business open under an operating agreement with the company's licensed funeral director, collect the receivables and market the assets as a going concern, per the Notice and Statement of Receiver, Jan. 26, 2026, pp. 1–3. That funeral director was one of the two principals, per the Second Report, Aug. 5, 2026, para. 17(b). The appointment order left the regulator's path open: nothing in it was to impede the Bereavement Authority of Ontario from investigative, regulatory or enforcement action under the Funeral, Burial and Cremation Services Act, 2002, short of enforcing a payment, per the Receivership Order, Dec. 12, 2025, para. 36.

Running a funeral home in receivership

For nearly six months the receiver carried on the business in the ordinary course, overseeing the employees, the suppliers, the bank accounts and the customer payments, per the Preliminary Report, Sept. 23, 2026, p. 1 and the Second Report, Aug. 5, 2026, para. 17. Its accounts show $993,402 in operating receipts against $642,138 in operating costs; after $254,250 in receiver's fees and $24,952 in legal fees allocated to the operation, it netted $72,061.67, per the Second Report, Aug. 5, 2026, para. 78. The leased vehicles and equipment stayed in use, among them three Cadillacs from Hourglass Distributors and two photocopiers from LBEL Inc., whose registration describes only one; the receiver "has been unable to determine to which photocopier the financing statement relates," per the Second Report, Aug. 5, 2026, paras. 53–56, 63.

Four other parties might have asserted security through factoring arrangements, receivables purchase agreements or small business lending: Journey Capital, on a small business loan estimated at $102,206, and three receivable factoring companies, 2M7 Financial Solutions at $83,400, CanaCap at $74,950 and 3201961 Ontario Inc. o/a Sheaves Capital at $70,500. None had registered a financing statement, and the receiver reported that the proceeds were insufficient to produce any recovery for them, per the Second Report, Aug. 5, 2026, paras. 57, 59–60.

One regulatory obligation travelled with the sale. At the appointment date the company had not filed the Bereavement Authority's annual trust fund reporting for the year ended March 31, 2025, and the transaction required the receiver to bring all of it current. The former accountant was "largely unresponsive," the receiver wrote, so it proposed to retain MNP LLP for statements and review engagement reports through the July 7 closing, at an estimated $9,040; the filings let the authority "monitor preneed funeral trust funds," per the Second Report, Aug. 5, 2026, paras. 21–24.

What Select bought

The sale process ended in an agreement of purchase and sale dated May 4, 2026 with 1001464218 Ontario Inc., which the trustee identifies as a subsidiary of Select Community Funeral Homes. Madam Justice Moore approved it on June 12 by an approval and vesting order, and it closed on July 7, per the Second Report, Aug. 5, 2026, paras. 5–7 and the Preliminary Report, Sept. 23, 2026, p. 1. Select took the stock of merchandise, the equipment and furniture, the real property, most of the books and records, and "all of the Company's rights, interests, and entitlements, if any, arising under or relating to the pre-need funeral contracts to which the Company was a party," per the Preliminary Report, Sept. 23, 2026, pp. 2–3.

The receiver's table of realizations at July 31 attributes $3,675,000 to the real property, $1,275,000 to goodwill, $250,000 to machinery, equipment and other assets and $93,865 to accounts receivable and cash. With the operating receipts, gross realizations were $6,287,267. The costs set against them include a broker's commission of $316,400, and net realizations come to $4,838,115: $3,295,515.47 from the real property and $1,542,599.20 from everything else, per the Second Report, Aug. 5, 2026, paras. 78, 80–81.

An ancillary order made the same day approved the receiver's first report and its accounts to date. It also dealt with the company's other principal: the receiver had asked for, and the court granted, an order directing him "to forthwith remit misappropriated funds totalling $69,594 to the Receiver," per the Second Report, Aug. 5, 2026, paras. 5(b), 6. The Second Report describes the order as requiring him to account for and remit company funds "inappropriately withdrawn by him on the Appointment Date before the Receiver took control of the Company's bank accounts." The receiver wrote to him about compliance on July 28; as of the Second Report he had not responded, per the Second Report, Aug. 5, 2026, paras. 26–27.

The order of the last two steps

On July 10, three days after closing, Justice J. Paul R. Howard heard Roynat's motion, on notice to the CRA, and made an order lifting the stay under the appointment order and authorizing and directing the receiver to file an assignment in bankruptcy for the company. The order had the company's name wrong. Roynat applied to amend it, and the receiver said it would make the assignment once the amended order arrived, per the Second Report, Aug. 5, 2026, paras. 9, 19–20. The amended order was granted on September 2, per the Preliminary Report, Sept. 23, 2026, p. 2.

The Crown's claims were already on title: on December 1 and 2, 2025 the CRA registered four tax liens against the property, and of the fourth, for $82,427.02, the receiver wrote: "It is unclear what this lien relates to." By letters of January 28 and April 29, 2026 the CRA asserted two deemed trust claims: $202,571.50 for HST unremitted over 2023 to 2025, under s. 222 of the Excise Tax Act, and $128,278.37 for unremitted income tax, Canada Pension Plan contributions and employment insurance premiums over 2024 and 2025, under s. 227 of the Income Tax Act, per the Second Report, Aug. 5, 2026, paras. 46–49. Such trusts "hold prima facie priority over all other claims" to the tax debtor's property and its proceeds, the receiver noted, per the Second Report, Aug. 5, 2026, para. 65.

Under the heading "ETA Deemed Trust," the Second Report takes the HST claim in four paragraphs. The court had authorized the assignment, and "the Receiver will assign the Company into bankruptcy prior to making any distribution of Transaction proceeds," per the Second Report, Aug. 5, 2026, paras. 66–67. Under s. 222(1.1) of the ETA and s. 67(2) of the BIA, the report continues, the deemed trust "would be extinguished" at the bankruptcy as to amounts collected or collectible before it, per the Second Report, Aug. 5, 2026, para. 68. "Therefore, upon the Company's bankruptcy, the CRA's ETA Deemed Trust Claim becomes unsecured and subordinate in priority to the secured claims of the Bank," it concludes, the Bank being its defined term for Roynat and the Bank of Nova Scotia together, per the Second Report, Aug. 5, 2026, paras. 44, 69.

The bankruptcy would not extinguish the source-deduction trust, the report says. Section 227(4.2) of the ITA exempts a "prescribed security interest," defined in Regulation 2201, which in the receiver's gloss includes a mortgage registered before the deemed trust arose; such a mortgage "can take priority over the Crown's deemed trust – up to a certain amount." Roynat's collateral mortgage, securing all of the company's obligations to it, was registered on April 14, 2023, and the CRA told the receiver that the company's first failure to remit source deductions came in February 2024, so the receiver concluded that Roynat holds a prescribed security interest over the real property, per the Second Report, Aug. 5, 2026, paras. 70–74. It then declined to measure it: "it is unnecessary to calculate the value of Roynat's prescribed security interest because Roynat's prescribed security interest does not extend to the proceeds of the Company's personal property and the Transaction proceeds attributable to the Company's personal property are sufficient to repay the Source Deemed Trust Claim in full," per the Second Report, Aug. 5, 2026, para. 76.

The receiver proposed to distribute in four steps. First, $3,295,515.47 to Roynat from the real property proceeds, on its mortgage; second, $128,278.37 to the CRA from the other proceeds, on the source deemed trust; third, $1,015,264.53 to Roynat from the other proceeds, on its personal property security; and last, what remained to the Bank of Nova Scotia, less a $238,723 fee accrual, per the Second Report, Aug. 5, 2026, paras. 82, 84. The two payments to Roynat total $4,310,780.00, the figure the report gives for Roynat's debt on its $4,925,000 term loan at July 31, 2026, before accruing interest and costs. The Bank of Nova Scotia was owed $440,012.73 on July 30 on a $300,000 overdraft facility and a $30,000 credit card facility, per the Second Report, Aug. 5, 2026, paras. 38, 43. Any recovery on the funds the ancillary order addressed, or of HST or insurance refunds, together estimated at under $50,000, was to go to the Bank of Nova Scotia up to its debt without another motion, per the Second Report, Aug. 5, 2026, para. 83.

MNP's accounts for May 7 to July 31 came to $124,300.00, for 241.30 hours at an average of $455.86 an hour; Miller Thomson's, as receiver's counsel, for May 30 to July 30 came to $43,233.00, for 64.90 hours at an average of $569.18, per the Second Report, Aug. 5, 2026, paras. 33–36. The motion was returnable August 14. That day, by the trustee's account, the court issued a Discharge and Distribution Order authorizing "certain distributions from the receivership estate" and providing for the receiver's discharge once its remaining work is done, per the Preliminary Report, Sept. 23, 2026, p. 2.

1000844040 Ontario Inc.

The statement of affairs MNP signed as receiver on September 2 has a place for the reasons behind the company's financial difficulty. It ticks "Other" and gives one: the July 10 order directing the receiver to file the assignment. It lists $415,000 in assets, all of it cash, $140,000 in the receiver's trust accounts and $275,000 in a Bank of Nova Scotia account, against $415,000 in secured claims and $397,113.01 in unsecured ones, per the Statement of Affairs, Sept. 2, 2026, pp. 2–3. The CRA appears on the creditor list three times, for $76,792.00, $240,388.00 and $21,960.00, each as an unsecured creditor; together those three claims make up $339,140 of the unsecured total. The first meeting of creditors was called for 10 a.m. on September 23, on Microsoft Teams, per the Notice of Bankruptcy, First Meeting of Creditors and Creditor Mailing List, Sept. 3, 2026, pp. 1, 4–5.

The trustee's preliminary report, dated the day of that meeting, finds nothing to realize in any class of asset: "All Company property was sold prior to the Trustee's appointment," per the Preliminary Report, Sept. 23, 2026, pp. 2–3. Unsecured claims proven by then totalled $61,423.99. The receivership estate paid $10,000 toward the fees and costs of the bankruptcy, and MNP obtained an opinion from Miller Thomson on the validity and enforceability of Roynat's and the Bank of Nova Scotia's security before consenting to act as trustee, per the Preliminary Report, Sept. 23, 2026, pp. 3–4. The report repeats that the court has ordered the other principal to repay funds to the receivership estate, and says that anything recovered will form part of that estate, for distribution under the August 14 order. Its projection runs two sentences: "The Bank of Nova Scotia is expected to incur a deficiency on the realization of its security. As the available realizations are insufficient to satisfy its secured indebtedness in full, no funds are presently anticipated to be available for distribution to unsecured creditors in the bankruptcy estate," per the Preliminary Report, Sept. 23, 2026, pp. 3–4. MNP, as receiver, remains in possession of the estate, with final reconciliations and statutory reporting still to finish, per the Preliminary Report, Sept. 23, 2026, p. 2.