Cymax: BDC's consent receivership reaches four U.S. subsidiaries

On October 26, 2026, Justice Lyster of the Supreme Court of British Columbia appointed BDO Canada Limited receiver and manager, without security, of all of the assets, undertakings and property of Cymax Group Technologies Ltd. and four U.S. subsidiaries: Cymax Stores USA, LLC, Freight Club, LLC, Cymax Services USA LLC and Cymax Stores USA, INC. The order was made under s. 243(1) of the Bankruptcy and Insolvency Act and s. 39 of the Law and Equity Act on the petition of BDC Capital Inc., and it notes the consent of the debtors and of "all of the secured creditors of the Debtors with registrations in the British Columbia Personal Property Registry": BDC and a second secured creditor, a company the petition says is owned by the group's chief executive, per the Receivership Order, Oct. 26, 2026, p. 1 and para. 1 and the Petition to the Court, Oct. 22, 2026, Part 2, para. 24.

Together, BDC's affidavit says, the five companies operate "as an integrated business carrying on an online furniture retail business and providing shipping solutions to e-commerce vendors through the Freight Club platform." The affidavit says the receiver is wanted for a liquidation: the group's chief executive "has requested that the business be immediately liquidated," and in BDC's view a receivership is appropriate "to commence a coordinated and orderly liquidation of the Cymax Group," per BDC Affidavit #1, Oct. 21, 2026, paras. 10, 52–53.

The petition was filed on October 22 in the Vancouver Registry, No. S-267851, and set down on short notice for 9:45 a.m. on October 26, per the Requisition for Short Notice, Oct. 22, 2026, pp. 1–2 and the Notice of Hearing of Petition, Oct. 22, 2026.

US$10 million of growth capital, and two years of losses

BDC Capital Inc. is a wholly owned subsidiary of Business Development Bank of Canada, and its affiant is an assistant vice president in its portfolio management, growth and transition capital group. Under a letter of offer dated December 9, 2022, BDC agreed to advance growth capital financing of US$10,000,000 to the parent, with the four subsidiaries named as joint and several guarantors. An amending letter of January 11, 2023 revised the postponement and subordination arrangements for certain preferred shares of the parent held by BDC and by two holding companies. The loan was to mature on December 1, 2026, or on the date of the last scheduled principal payment if that is later, with principal repayable in a single balloon payment, per BDC Affidavit #1, Oct. 21, 2026, paras. 1, 17–20.

At October 8, 2026 the parent owed BDC US$6,767,281.85 in principal and interest, plus further accrued and unpaid interest, fees, costs and expenses. The security, all dated January 31, 2023, is general security agreements from all five companies, unlimited guarantees from the subsidiaries and notices of security interest in intellectual property. BDC holds first-in-time registrations against all five companies in the BC Personal Property Registry and UCC filings in Delaware and Washington against the four subsidiaries. The affidavit says the chief executive's company is the only other party with a financing statement registered against the parent in the BC registry, and that no other party has registered against the subsidiaries there or, in their jurisdictions of incorporation, under the UCC, per BDC Affidavit #1, Oct. 21, 2026, paras. 14, 36–42.

The group lost approximately US$14,951,000 in 2024 and approximately US$3,524,000 in 2025, while consolidated revenue fell from approximately US$175,946,000 to approximately US$138,976,000 and gross profit from approximately US$33,987,000 to approximately US$26,236,000. For the quarter ended June 30, 2026, trailing twelve-month adjusted EBITDA of approximately US$1,381,000 remained below the US$4,000,000 minimum in BDC's covenant, and BDC had waived compliance, per BDC Affidavit #1, Oct. 21, 2026, paras. 21–22.

The consolidated shareholders' deficiency was approximately US$17,219,000 at December 31, 2025, against approximately US$13,700,000 a year earlier. The affidavit says the negative position "persisted through 2026, notwithstanding a significant capital contribution recorded in the first quarter": contributed capital rose from approximately US$37,988,000 at the end of 2025 to approximately US$48,844,000 at March 31, 2026, and the deficiency stood at approximately US$7,209,000 at March 31 and approximately US$7,912,000 at June 30. The parent, according to the affidavit, had reported to BDC that it depended on related-party and shareholder capital to pay its obligations as they came due, and the two holding companies advanced successive loans to it over 2024 to early 2026, per BDC Affidavit #1, Oct. 21, 2026, paras. 23, 25–26.

What the chief executive told BDC, as BDC's affiant reports it

BDC's account of early October comes largely from the group's chief executive, reported second-hand. The chief executive, it says, reported to the affiant that a further injection of shareholder funds from the chief executive was required on or around October 2, 2026 "to continue to satisfy ongoing payroll and operating obligations." On or around October 2 the chief executive, whom the affidavit also describes as the principal of the two holding companies, advised BDC that the holding companies "had invested over CAD $60 million in the Cymax Group via equity, unpaid dividends, and shareholder loans." The affidavit continues that "due to the recurring losses experienced by the Cymax Group and the significant financial impact of US tariffs," the chief executive would not inject any additional funds into the group to cover operational losses or to repay BDC on the maturity date, per BDC Affidavit #1, Oct. 21, 2026, paras. 27–28.

On or around October 5, BDC determined that the parent had experienced "a material and irreversible deterioration in its financial condition," which the affidavit attributes both to what the chief executive had told BDC and to "the imposition of United States tariffs at levels that rendered the Borrower's business model unviable and uneconomical to operate." On or around October 7, the affidavit says the chief executive advised BDC of an intention "to cease operations and liquidate the Cymax Group as soon as possible," per BDC Affidavit #1, Oct. 21, 2026, paras. 29–30. The only affidavit in the record is BDC's, and the companies consented to the receivership, as the order notes.

A demand, a consent and an NOI

Among the defaults the affidavit lists is a material adverse change "in the opinion of BDC," an event of default under the letter of offer. On October 7, BDC's counsel, McMillan LLP, delivered demand letters and notices under s. 244 of the BIA to the parent and the four guarantors by courier and email. On October 8 each of them consented to early enforcement of BDC's security and waived any additional notice periods, per BDC Affidavit #1, Oct. 21, 2026, paras. 31–32, 43–44.

On October 9, "in consultation with BDC," the parent filed a notice of intention to make a proposal under s. 50.4(1) of the BIA, and at its request BDO Canada Limited was appointed proposal trustee. The affidavit says what the filing was for: the parent and BDO "confirmed with BDC" that the NOI proceedings would be used "to stay unsecured creditors to immediately commence an orderly liquidation of the Borrower while BDC and the Borrower discussed the appointment of a receiver to further facilitate the liquidation of the Cymax Group." By the affidavit's date, it says, the NOI proceedings had allowed the proposal trustee to work with the parent "on a preliminary basis to investigate and coordinate the cessation of operations of the business," but relief was "urgently needed" for the whole group, per BDC Affidavit #1, Oct. 21, 2026, paras. 33, 54. The petition deals with the NOI stay in one paragraph: under the consents and waivers, the parent "has consented to the enforcement of BDC's Security and the stay of proceedings granted pursuant to the NOI Proceedings therefore does not apply to BDC," citing s. 69(2)(c) of the BIA, per the Petition to the Court, Oct. 22, 2026, Part 3, para. 1.