Field Aviation: frozen by a cash sweep, funded by the same bank

Field Canada designs, integrates and certifies aircraft systems and structural modifications for government and commercial operators. Substantially all of its physical work happens in a 40,000 square foot hangar next to Toronto Pearson. Before it filed, it employed about 132 people, per Endorsement of Justice Dietrich, June 12, 2026, para. 7.

Both it and its subsidiary filed notices of intention to make a proposal on June 5, 2026, per Certificate of Filing of a Notice of Intention, June 5, 2026. Seven days later Justice Dietrich approved a debtor-in-possession facility, a chief restructuring officer, a retention plan, four charges, a stalking horse bid and a thirty-day sale process.

The most instructive part of the endorsement is how the company got there.

What a cash sweep does

Wells Fargo Capital Finance Corporation Canada is the primary secured creditor. Approximately US$5 million is owed under the credit agreement, on which Field Canada and a US affiliate are joint and several borrowers and Field East is a guarantor. There is one other registered secured creditor, in respect of a vehicle, and about $10.3 million owing unsecured, per Endorsement, June 12, 2026, paras. 10–11.

On April 6, 2026, Wells delivered a notice of default and began conducting daily cash sweeps of Field Canada's accounts to lower its overadvance position.

The endorsement states the consequence in one sentence: this prevented Field Canada from using collections from its accounts receivable to fund ordinary-course operating expenses, including payroll, supplier payments and other working capital. Field Canada immediately froze its operations and temporarily laid off substantially all its employees, per Endorsement, June 12, 2026, para. 12.

There is no allegation that the sweep was improper. A lender facing an overadvance is entitled to reduce it, and that is what a cash-dominion arrangement is designed to let it do. But the mechanism is worth understanding plainly, because it is the difference between a borrower that is short of money and a borrower that has none: receivables collected in the ordinary course stop being the company's working capital and become the lender's repayment. A business can be operating, invoicing and collecting, and still be unable to make payroll on Friday.

Ten days later, on April 16, the parties signed an Overadvance Agreement under which Wells permitted a temporary overadvance of up to US$1.5 million to fund Field Canada's accrued payroll and certain professional costs, then continued funding limited operations against weekly budgets and cash flow reporting. Among the conditions: Field Canada had to engage Riveron as chief restructuring officer, retained April 21, per Endorsement, June 12, 2026, para. 13.

So within ten days the same lender stopped the company and then advanced money to pay the wages its enforcement had made unpayable — on terms that included putting its own choice of officer inside the business.

The subsidiary that is a filing cabinet

Field East is a wholly-owned subsidiary with no employees and no operations. Its only material assets are Supplemental Type Certificates — the regulatory approvals issued by Transport Canada Civil Aviation for changes to aircraft modification designs, per Endorsement, June 12, 2026, para. 8.

That is worth noting for anyone valuing an aerospace estate. An STC is not a licence to operate a business; it is a certified design change that a buyer would otherwise have to re-earn through Transport Canada. It has no book value to speak of and considerable transaction value, and it sits in a separate corporate entity that files its own NOI and is then administratively consolidated with its parent.

The customer paying to finish its own aircraft

Field Canada's remaining work has one active customer.

Under an Accommodation Agreement of June 5, FR Aviation Limited, trading as Draken Europe, agreed to fund Field Canada's operating costs and disbursements — including shared services payable to the US affiliate — so that Field Canada can complete the modification of Draken's aircraft, together with completion bonuses for the key personnel recalled to work on the programme, per Endorsement, June 12, 2026, para. 17.

The same day, a Data Transfer Agreement under which Draken pays Field Canada US$800,000 for the transfer of intellectual property — data, designs and drawings related solely to that programme.

The court approved that sale without a marketing process, and the reasoning is a clean application of s. 65.13(4) of the BIA to an asset with exactly one possible buyer. The sale is at arm's length. The intellectual property "only has value to Draken", consisting as it does of data, designs and drawings specific to the modification of Draken's C-604 aircraft. Rather than expending further resources soliciting an open-market sale "that would be unlikely to yield any value", the agreement produces a recovery, and both Wells and the proposal trustee support it, per Endorsement, June 12, 2026, para. 30.

A second customer project, for UK Research and Innovation, is halted while discussions continue — and UKRI's counsel appeared to say that one of the aircraft sitting at Field Canada's premises is in fact owned by UKRI, with steps being taken to transfer ownership. Counsel for the Field Entities agreed, and Wells' counsel said they would return to court if concerns arose, per Endorsement, June 12, 2026, paras. 5, 18.