Coast Appliances: 11,135 secured B.C. deposit holders on the books, 801 to be notified

On September 2, Coast Appliances and its liquidator signed a letter releasing each other from claims under their agency agreement, subject to surviving indemnities, and on September 8 the debtors received Hilco's final payment under the liquidation: $1.52 million, net of the adjustments the final reconciliation produced, per the Third Report of the Monitor, Oct. 19, 2026, paras. 5.2–5.3. As at September 18 the monitor, PricewaterhouseCoopers Inc., held $23.5 million of cash proceeds. On October 19 it applied to the Supreme Court of British Columbia for approval of an interim distribution out of that money, the last step of which is $16.5 million to the lending syndicate led by the Bank of Montreal, owed approximately $68.9 million at April 15, excluding interest and expenses, per the Notice of Application, Oct. 19, 2026, Part 2, paras. 8, 10, 19.

The monitor's Third Report, dated the same day, says the syndicate "will suffer a significant shortfall," and that "it is anticipated that no funds will be available for distribution to the Debtors' unsecured creditors," per the Third Report of the Monitor, Oct. 19, 2026, para. 13.3. Among the claims the monitor ranks ahead of the syndicate are those of individual customers in British Columbia who paid deposits toward goods not yet delivered; the debtors' books put their number at an estimated 11,135. The claims process the monitor will ask the court to approve on November 17 would put an estimated 801 of them in its creditor pool, per the Third Report of the Monitor, Oct. 19, 2026, paras. 1.11, 6.10, 6.12, 13.17. The case was reported here on August 8, after the court approved the sale of the Coast brand to Trail Appliances.

What the stock brought

Hilco's sale of the inventory took in approximately $31.0 million, excluding sales taxes. The report's table divides it five ways: $14.2 million of net minimum guarantee, $4.7 million from excluded merchandise, $8.8 million of expenses, Hilco's $1.2 million fee and $2.0 million subject to sharing. The debtors kept 80% of the excluded merchandise proceeds and half of the shared amount, per the Third Report of the Monitor, Oct. 19, 2026, paras. 5.5–5.6.

Commercial accounts have come in more slowly than forecast. Of $25.3 million of commercial receivables and holdbacks, $18.9 million had been collected and $6.4 million remained. The monitor has sent demand letters through McCarthy Tétrault, its counsel, and is pursuing an adjudication under Ontario's Construction Act, and its new forecast, to January 22, 2027, expects $4.7 million more, per the Third Report of the Monitor, Oct. 19, 2026, paras. 9.1–9.2, 11.3.1, 12.2.1.

Three steps to the syndicate

The distribution would run in order. First, the monitor would keep a $2.9 million reserve for the debtors' ongoing expenses, the administration of the proceedings and the fees of the monitor and its counsel. Second would come the "retention, and ultimately distribution," of up to $4.5 million for the Priority Claims as the monitor finalizes their amounts. Last is the "distribution of the remaining balance of $16.5 million to the Syndicate on account of its secured indebtedness," per the Notice of Application, Oct. 19, 2026, Part 2, para. 10. The reserve includes $1.3 million for unknown costs or obligations that may arise before the proceedings end, per the Third Report of the Monitor, Oct. 19, 2026, para. 13.5.1.

The notice of application lists four Priority Claims: post-filing sales tax, which the monitor is still confirming with the provincial and federal agencies; two purchase-money security interests in inventory; "the lien claims of BC Customers, which the Monitor intends to confirm through the claims process"; and $570,000 under the Wage Earner Protection Program, per the Notice of Application, Oct. 19, 2026, Part 2, para. 13. The report says the debtors owe the $570,000 to Service Canada under the program, in respect of former employees' unpaid wages, vacation, severance and termination pay, and ranks it ahead of the syndicate under ss. 81.3 and 81.4 of the Bankruptcy and Insolvency Act, per the Third Report of the Monitor, Oct. 19, 2026, para. 13.19.

The purchase-money claims rest on opinions from McCarthy Tétrault. VIP Distributors Inc., operating as National Buying Associates, financed Coast's Samsung inventory and registered in British Columbia, Alberta, Ontario and Saskatchewan; the opinion is that, subject to standard qualifications, its agreement creates a registered security interest and its notices appear to have been sent to the appropriate parties to meet the purchase-money requirements, per the Third Report of the Monitor, Oct. 19, 2026, para. 13.14.

Fisher & Paykel Appliances Canada, Inc.'s claim is narrower. Its security interest was registered only in British Columbia, "such that F&P only has security over assets supplied in British Columbia"; the debtors' books show approximately $120,000 in invoices outstanding to it across Canada, $35,000 of it within British Columbia, and the agent does not contest the sufficiency of its notice, per the Third Report of the Monitor, Oct. 19, 2026, paras. 13.15–13.15.5. The forecast carries $1.14 million for the purchase-money creditors, any distribution subject to a security review by counsel, potential cost allocation and court approval, per the Third Report of the Monitor, Oct. 19, 2026, para. 12.1, App. B, note 10.

On the syndicate's own security, McCarthy Tétrault's opinion is that, subject to customary qualifications, the agent holds valid security over all present and after-acquired personal property of the debtors. The opinion did note that the agent had not perfected its security in British Columbia against Coast Holdings Limited Partnership and Coast Holdings (GP) Ltd.; the report says both exist under Alberta law, "appear to have been holding companies that have not conducted business outside of Alberta, and none of the collateral recovered relates to them," per the Third Report of the Monitor, Oct. 19, 2026, paras. 13.6–13.7. The notice of application quotes the factors a court may consider from First Source Financial Management v. Chacon Strawberry Fields Inc., 2024 ONSC 7229 (valid security, a debt larger than the distribution, interest savings) and submits that the distribution "will reduce ongoing interest and carrying costs associated with the secured indebtedness, and is not expected to prejudice the interests of any stakeholder with an economic interest in the Debtors' property," per the Notice of Application, Oct. 19, 2026, Part 2, para. 23; Part 3, para. 28.

The same application would end three of the charges granted in April. The interim facility of up to $2 million was never drawn; the notice says the debtors received the net minimum guarantee from Hilco and so never required the interim financing. The key employee retention plan has paid what the report says is all that is due to its recipients. And with the final reconciliation done, Hilco "no longer requires the protection of the Liquidation Agent's Charge," per the Notice of Application, Oct. 19, 2026, Part 2, para. 24 and the Third Report of the Monitor, Oct. 19, 2026, paras. 1.2.5, 1.4.2, 11.3.3, 13.25. The application is set for 9:00 a.m. on October 22. The notice of hearing marks it "unopposed, by consent or without notice" and records that no application response had been served, per the Notice of Hearing of Application, Oct. 19, 2026, p. 1, paras. 1–2.