Canstar Restorations: a plan to sell the shares and keep the contracts

The work Canstar Restorations does follows the weather of the places it works: storm and water damage in the wet Lower Mainland; forest-fire work in the warmer seasons and cold, dry damage in winter in the British Columbia Interior, through its ABK division; mould and hazardous materials through Norhaz; the province's north through Universal Restoration Systems; and Alberta and Saskatchewan under the Lydale name. The group is headquartered in leased premises in Coquitlam and leases 15 other locations, three of which it has vacated and stopped paying rent on. It had approximately 113 salaried and 226 hourly employees, none unionized, and about 680 customers, the largest of them insurers and independent adjusters, "where collection terms commonly exceed 90 days," per the Pre-Filing Report of the Proposed Receiver, Sept. 25, 2026, s. 2.0, paras. 1–2, 4 and s. 2.3, para. 1. The company's website dates the business to 1985.

On September 28, 2026, Justice Stephens of the Supreme Court of British Columbia, at Vancouver in No. S-267204, appointed AlixPartners Restructuring, Inc. receiver and receiver and manager of all the property of Canstar Restorations Limited Partnership, its general partner Canstar Restorations GP Inc., and L.U.N.A Restorations Inc., the operating subsidiary, amalgamated from four companies effective on or about December 31, 2025. The Bank of Montreal applied under s. 243(1) of the BIA and s. 39 of the Law and Equity Act, per the Receivership Order, Sept. 28, 2026, preamble and para. 1 and the Affidavit #1 of Jesse Agassiz, Sept. 21, 2026, para. 48. "The principal purpose of these proceedings is to complete the Transaction, which will allow the Debtors to continue operating as a going-concern," AlixPartners wrote three days before, per the Pre-Filing Report, Sept. 25, 2026, s. 1.0, para. 7. The transaction is a sale to Premium Restoration Ltd. under an agreement signed September 15, and the receiver has scheduled an application for October 8 for its approval and a reverse vesting order, per the Supplement to the Pre-Filing Report, Sept. 29, 2026, s. 1.0, para. 4.

Three forbearance agreements and a sale process

The bank's account is affirmed by Jesse Agassiz, a senior director in BMO's Special Account Management Unit. The current credit agreement, dated May 1, 2024, provided a revolving facility of up to the lesser of $15,000,000 and a borrowing base and a $6,367,584.48 term facility, among others, with interest at BMO's prime rate plus 4.50% on all but a MasterCard facility, and all to end no later than May 1, 2026. In or around the start of 2026 the borrower defaulted by, among other things, running total funded debt to EBITDA of 7.92:1 at December 31, 2025, against a permitted maximum of 4.00:1, and fixed charge coverage of 0.76:1 against a required minimum of 1.20:1, per the Agassiz Affidavit, Sept. 21, 2026, paras. 1, 16–17, 19, 59.

A forbearance of March 11, 2026 ran to March 31, with the debt acknowledged at $20,106,064.30 as of March 3. It expired without BMO being repaid. An extension of April 21 ran to July 31, acknowledged $21,497,659.89 owing as of April 20, and required the borrower to engage a transactions advisor, on terms approved by BMO in consultation with KSV Advisory Inc., and to make best efforts to sell the business as a going concern. The facilities matured on May 1. A second extension, dated August 14, ran to September 30 or any earlier date BMO chose; in it the parties acknowledged that the sale process "had resulted in certain letters of intent" and each credit party irrevocably consented to BMO applying to have AlixPartners appointed receiver to give effect to one of them, per the Agassiz Affidavit, Sept. 21, 2026, paras. 60–79.

The receiver summarizes the results, all of them unaudited. Sales were $84.829 million in fiscal 2024 and $76.045 million in fiscal 2025, gross margin fell from $17.151 million to $7.354 million, and the net loss went from $6.819 million to $30.504 million. The six months to June 30, 2026 brought sales of $41.809 million, a net loss of $7.257 million and an accumulated deficit of $69.642 million. "The Debtors' fiscal 2025 results include restatements arising from material accounting restatements that relate to the performance of the business in that fiscal year and prior," the report says. At June 30 the balance sheet carried $27.717 million of assets at book value, $17.783 million of it receivables, against $67.045 million of liabilities, and the receiver calls the long collection periods "a strain on liquidity," per the Pre-Filing Report, Sept. 25, 2026, s. 1.3, para. 2; s. 2.1, paras. 3–4; s. 2.2; s. 2.3, para. 1.

Who is owed

BMO, which its affiant says holds first-ranking security, was owed more than $16.85 million under its facilities as of September 16 by the receiver's count, with the operating line fully drawn, plus a Fulcrum fund's participation amount, fees and interest. BMO's affiant puts the sum owing under the credit agreement and security on that date at $21,850,586.27; BMO's payout statement of that date totals $16,850,586.27 and leaves out the $5,000,000 bought by Fulcrum affiliates, which the affidavit says "remains owing under the Credit Agreement and security," per the Pre-Filing Report, Sept. 25, 2026, s. 2.1, para. 1 and the Agassiz Affidavit, para. 84, Ex. "Z" and the Agassiz Affidavit, Sept. 21, 2026, paras. 6, 84–85.

Fulcrum Capital Partners Inc. controls the limited partnership interests in Canstar and the shares of its general partner. One of its funds, Fulcrum Capital Partners V, LP, had given BMO partial guarantees of up to $5,000,000. Under a Participation and Administration Agreement dated June 29, 2026, Fulcrum V and other Fulcrum affiliates bought from BMO a $5,000,000 interest in the facilities; BMO became entitled to apply that sum against the debtors' indebtedness, in exchange for releasing the guarantees. The investor now holds that $5,000,000 of the debt, the affidavit says, "but subordinate to BMO's interest," per the Agassiz Affidavit, Sept. 21, 2026, paras. 15, 55–58. Separately, the debtors owed two shareholders of the general partner, Fulcrum and Canstar Construction Ltd., directly or indirectly, more than $23.4 million at June 30 under subordinate secured debt instruments, approximately $19.2 million of it to Fulcrum, per the Pre-Filing Report, Sept. 25, 2026, s. 2.1, para. 2 and s. 2.6, para. 1.

Suppliers and service providers were owed approximately $13.6 million at June 30, not counting employee and landlord claims; the largest, Pro 16-3 Restoration & Services, was owed $1.623 million, and some 750 others sit outside the top ten. About 30% of vendor payables were more than 120 days old, and the receiver understands that 19 lawsuits were pending against certain of the debtors, per the Pre-Filing Report, Sept. 25, 2026, s. 2.8, paras. 1–2.

Four letters of intent

KSV Advisory Inc. was engaged by the debtors on February 14, 2026 to help with their financial challenges, including the sale process; AlixPartners acquired KSV on June 1, 2026. KSV's engagement letter ends the advisory mandate if it is appointed a court officer and does not preclude that appointment, and the debtors, BMO and Fulcrum each consented to AlixPartners acting, per the Pre-Filing Report, Sept. 25, 2026, s. 1.1, paras. 1–4 and n. 1.

Summit Cap Advisors Ltd., a Vancouver investment bank, was retained on April 21, 2026, as the forbearance required. Its success fee is the greater of 3% of the enterprise value of the transaction or $500,000, payable only on closing, and its engagement letter requires the debtors to seek a court-ordered charge for that fee over the net sale proceeds only, ranking equally with the receiver's charge; BMO and Fulcrum consented, per the Pre-Filing Report, Sept. 25, 2026, s. 3.0, paras. 1–4.