Deckmart: paying RBC, and taking its security over North Bay

Deckmart supplies outdoor construction materials — decking, railing, fencing, lighting, siding and paneling, and the hardware that goes with them — from a 3,200-square-foot showroom and 1,600 square feet of offices on Marycroft Avenue in Vaughan and a 7,503-square-foot warehouse on Garyray Drive in Toronto, with 17 full-time employees and a catalogue its customers can search online, according to the first affidavit of its director, Artur Harutyunyan, in the Affidavit of Artur Harutyunyan, July 7, 2026, paras. 6–7, 11. Mr. Harutyunyan holds half its shares and Aram Piruzyan the other half, and the same two own 1000009704 Ontario Inc., which operates as North Bay Building Products and supplies Deckmart as well as third-party construction companies. By Mr. Harutyunyan's account the relationship began breaking down in 2021, and with no mechanism in a shareholders' agreement to settle it, the dispute went to litigation in late 2025, per the Affidavit of Artur Harutyunyan, Aug. 19, 2026, paras. 4, 13.

The company filed a notice of intention to make a proposal on June 15, 2026, naming MNP Ltd. as proposal trustee. It attributes the filing to a 54% fall in sales in recent months, driven by a depressed housing market and a need for cash to buy inventory, advertise and carry itself through the winter, and to a shareholders' dispute that "has materially distracted from its operations," per the Affidavit of Artur Harutyunyan, July 7, 2026, paras. 9, 15–17. Royal Bank of Canada wrote on June 25 that it was transferring the company's accounts to its Special Loans & Advisory Services group, per the Affidavit of Artur Harutyunyan, July 7, 2026, para. 18 and Ex. "H", and, the trustee reports, closed its line of credit and credit card after the filing, leaving inventory, freight and ordinary expenses to be funded from cash or tighter supplier support, per the First Report of MNP Ltd., July 10, 2026, para. 26. The cash-flow statement it signed with the trustee on June 25 started from about $907,961 and forecast a shortfall of about $253,640, leaving about $654,321 on September 13, according to the First Report of MNP Ltd., July 10, 2026, para. 22.

By August 16 the company held $2,063,274; the forecast had put $780,829 in the account by that date, per the Second Report of MNP Ltd., Aug. 24, 2026, para. 23. On August 27, Justice Cavanagh of the Ontario Superior Court of Justice (Commercial List) extended the time to file a proposal to October 13 and authorized the company to use some of that cash to pay RBC in full under its guarantee of North Bay's debt, provided it takes an assignment of the bank's secured rights against North Bay, per the Order (Re: Stay Extension), Aug. 27, 2026, paras. 2–3.

A sale run by neither shareholder

When the company first came to court, on July 15, it asked for a sale process that the trustee, rather than either owner, would conduct. The trustee drew it up at the company's request, to be fair to two shareholders who might each want to bid, per the Affidavit of Artur Harutyunyan, July 7, 2026, para. 23; any related party intending to bid had to say so within three business days of launch and would then take part only as a bidder, per the First Report of MNP Ltd., July 10, 2026, paras. 28, 33. Before the hearing the trustee corrected its report to put the bid deadline at 5:00 p.m. on August 25 rather than August 29, and let a qualified bid arrive as a binding letter of intent rather than an executed asset purchase agreement, per the Supplementary Report to the First Report, July 14, 2026, para. 19.

The debts, as sworn in July: about $1,065,000 to RBC under loan agreements of September 13, 2022 and April 25, 2023 and a guarantee of North Bay's liabilities, secured by a general security agreement — a revolving loan, the affidavit says, "available to support North Bay's and the Company's businesses"; about $154,000 to the Business Development Bank of Canada; and vehicle leases with Mercedes-Benz Financial. Unsecured creditors were owed about $3,535,000, of which about $565,278 was trade debt and about $2,970,000 was owed to the shareholders, and the company owed about $21,870 in pre-filing HST, per the Affidavit of Artur Harutyunyan, July 7, 2026, paras. 10, 13. Ten days after the filing, Fortress Iron, LP, a Texas-based supplier to North Bay, demanded $682,624.01 on invoices dated March through June 2025; the affidavit says Deckmart guaranteed that obligation and would update its creditor list, per the Affidavit of Artur Harutyunyan, July 7, 2026, para. 19 and Ex. "I".

Mr. Piruzyan, representing himself, filed a responding affidavit and factum on July 9, saying he did not seek to prevent the company from stabilizing its business or obtaining a reasonable extension. His objection was to the shape of the sale: Deckmart's materials counted North Bay-related liabilities, the RBC facility and the Fortress demand among them, as Deckmart's exposure, while North Bay's own assets stayed outside the process. On the records available to him, North Bay held inventory of about $2,674,007 and receivables of about $744,713 and "currently has no active director, board, or officers"; a Deckmart shareholders' meeting on June 19 had split evenly, passing no resolution either to remove Mr. Harutyunyan as director or to appoint Mr. Piruzyan. In his evidence the Fortress amount should not be treated as an undisputed Deckmart liability, and any Deckmart guarantee of it is disputed, per the Responding Affidavit of Aram Piruzyan, July 9, 2026, paras. 6, 14, 25, 28, 35–39. His factum asked that approval of the sale process be adjourned for a further trustee report, or granted only on conditions, per the Responding Factum of Aram Piruzyan, July 9, 2026, paras. 2, 46–47. The affidavit also pointed to a US$58,409.54 cheque from Trex, dated January 23, 2026, that had not been deposited, and to at least $60,000 in manufacturer rebates Mr. Piruzyan believed TimberTech owed Deckmart. "I do not allege that the Proposal Trustee acted improperly," he swore, per the Responding Affidavit of Aram Piruzyan, July 9, 2026, paras. 43–44, 60.

The trustee answered on July 14. "Purchasers in a Sales Process typically bid for assets and do not assume unsecured, disputed or intercompany liabilities unless the transaction structure expressly requires them to do so," it wrote. It wanted a process loose enough to take bids for Deckmart alone, for North Bay alone if its assets were available and the sale properly authorized, or for both; but "as this is a debtor-in-possession proceeding, if DeckMart is not prepared to include North Bay in the proposed Sales Process, the Proposal Trustee recognizes that DeckMart is not obligated to do so," and the question should not hold up a Deckmart sale, "as the alternative may be a bankruptcy," per the Supplementary Report to the First Report, July 14, 2026, paras. 8, 12–13. On the Trex cheque, the trustee reported that Mr. Harutyunyan had held back the deposit out of concern that the RBC account could be suspended or disrupted during the proceeding, given prior banking issues during the shareholder dispute, and would deposit it on his return to Canada on July 27; the trustee told him the cheque could go stale-dated before then, per the Supplementary Report to the First Report, July 14, 2026, paras. 16–18.