Igloo Industries: the factory clearance sale and the tax shield

From May 23 to about August 15, 2024, the receiver of Igloo Industries Group Ltd. sold the company's inventory out of its business premises at 124 Norfinch Drive in North York. msi Spergel inc. had terminated all of Igloo's employees and retained certain of them as independent contractors, ten salespeople among them, for what it called a "factory clearance" sale. It entered into 1,160 transactions for smallware and 322 for equipment and collected $2,757,601.96 before HST, selling in most cases, it reported, at cost plus at least 25% profit, per the First Report of the Receiver, Dec. 2, 2024, paras. 2, 17–18.

Igloo imported and sold hardware for grocery and restaurant businesses across Canada and in March 2024 had about 30 full-time employees. In the company's account, as its proposal trustee, Albert Gelman Inc., summarized it, rising interest rates had led customers who finance new equipment to postpone purchases or buy used; an expansion into the United States through a Delaware affiliate, NDG North America, LLC, had taken more time and investment than anticipated; and on February 12, 2024 Royal Bank of Canada, its senior secured lender, made demands it lacked the liquidity to pay in time. Igloo filed a notice of intention to make a proposal on February 21, per the Proposal Trustee's Second Report, May 22, 2024, App. B, paras. 1–2, 12, 16, 18, 41.

When cash receipts in the proposal proceeding ran about 33% behind forecast, the trustee understood that RBC had "lost faith in Igloo's ability to make a viable proposal to its creditors," per the Proposal Trustee's Second Report, May 22, 2024, paras. 13, 18. On May 22, 2024, on RBC's motion, Justice Wilton-Siegel appointed Spergel receiver under s. 243(1) of the Bankruptcy and Insolvency Act and, with the consent of Igloo, RBC and Business Development Bank of Canada (BDC), ordered the company's notice of intention withdrawn, per the Receivership Order, May 22, 2024, p. 1 and paras. 3–4.

On October 16, 2026, Justice Steele granted Spergel's distribution and discharge order. "No one opposes the relief sought," the endorsement records; the receiver and its counsel appeared, and Cara Persia for BDC. It approves the receiver's Second Report of October 8, the fees of the receiver and its counsel with a $39,600 accrual to complete matters, the final distributions, and the discharge and release, per the Endorsement of Justice Steele, Oct. 16, 2026, p. 1 and paras. 1–7. The order also declares that the receiver incurs no liability under the tax statutes for facilitating the distributions, per the Distribution and Discharge Order, Oct. 16, 2026, para. 7.

A clearance sale, then a buyer for the rest

The receiver then marketed what the clearance sale left. Twenty-one parties signed non-disclosure agreements, five offers came in, and the receiver chose an outright purchase by Nella Cutlery (Toronto) Inc., under which it "would not be required to expend resources managing a further auction process," per the First Report of the Receiver, Dec. 2, 2024, paras. 9, 22, 26–27, 30. Justice Cavanagh approved the sale on December 11, 2024 as "the best and highest offer received" and made a limited sealing order over the confidential appendices, per the Endorsement of Justice Cavanagh, Dec. 11, 2024, paras. 2–3. It closed on January 9, 2025. The receiver's Second Report now gives the purchase price as approximately $1.4 million, and its statement of receipts records $1,440,000 in net proceeds from the sale, per the Receiver's Second Report, Oct. 8, 2026, paras. 6.2, 31 and App. 6.

What came in and what went out

The receiver's figures to September 30, 2026, all approximate, show receipts of $4.8 million, including $2.8 million net from the clearance sale, $1.4 million net from the Nella sale, $326,600 of HST collected on the clearance sale and $191,000 net from an auction of NDG's inventory in the United States, which the receivership order had provided for. Of $2.4 million in disbursements, the largest included $670,800 in contractor fees to former Igloo employees retained to assist in the clearance sale, $435,400 of HST paid or remitted to CRA and $412,900 in occupation rent for the premises during the clearance sale. At September 30 it held $2.4 million in trust. "While the Factory Clearance Sale was more time-consuming than completing an en-bloc sale for all of the Company's inventory, it served to significantly enhance overall realizations," the receiver wrote, per the Receiver's Second Report, Oct. 8, 2026, paras. 15.3, 22–24, 27.1.

Igloo had also made a prepayment of approximately EUR 178,200 on an order placed with a supplier in Turkey through an intermediary. The receiver was advised that the supplier and the intermediary were each claiming the prepayment, with litigation commenced in Turkey, and after its review it "concluded that it was not in the interest of the estate to pursue the return of the Prepayment," per the Receiver's Second Report, Oct. 8, 2026, para. 12.8.