Jay's Metal: records order substantially unmet, court sets a show-cause hearing

On the afternoon of Friday, September 11, 2026, the president of the Jay's Metal companies answered the receiver's list of outstanding items one line at a time. Against the demand for every business computer, with its passwords and administrator credentials, he wrote: "I will deliver the computers with credentials at 1324 36 Ave NE on Monday morning along with vehicles." On Monday, September 14, the other director delivered two vehicles. The computers and credentials did not come, and by the time BDO Canada Limited filed its second report three days later, an email it sent that evening asking to arrange the drop-off had gone unanswered, per the Second Report of the Receiver, Sept. 17, 2026, paras. 53–54 and Appendix "C".

That is one line of seven in the schedule Justice M. A. Marion attached to an order pronounced on September 18. The order declares that the four debtors and the two individual defendants, defined together as Management, "have substantially failed to comply with the Compelling Order," gives each of them until 4 p.m. on September 23 to finish every obligation in the schedule, and requires them to attend personally on September 24 "to show cause why they should not be held in contempt," per the Order Declaring Non-Compliance, Sept. 18, 2026, paras. 2–3, 6 and Schedule "A". The receiver's first report and the missing records behind the first application were reported here on September 3.

An order the debtors' counsel agreed to

The compelling order of September 3 turned the general cooperation duties in paragraphs 4 to 6 of the receivership order into a list with dates on it. Management was to use best efforts to hand over as many books and records as possible on September 4 and the balance by 4 p.m. on September 9; to list every customer, creditor, employee, records custodian and systems administrator by 4 p.m. on September 4; to meet the receiver at 10 a.m. that day at 1324 36 Ave NE to sort completed customer orders from unstarted ones; and, by September 9, to produce a full inventory and asset list, bank statements from January 1, 2025 with the documents showing where deposits came from and where payments went, a list of every disposition over $5,000 in the twelve months before August 20, and every computer and device used in the business with its credentials, per the Compelling Order, Sept. 3, 2026, paras. 6–9, 11–13. It ordered the receiver's costs of that application paid by the two directors personally, jointly and severally, on a solicitor-and-client basis, and reserved the receiver's liberty to come back on short notice for "further enforcement or contempt relief," per the Compelling Order, Sept. 3, 2026, paras. 18–19.

The receiver puts weight on how that order came to be made. Its form, the second report says, "was negotiated and agreed to by counsel for the Debtors and Management before it was granted," both men were represented when it was pronounced, and no one applied to vary, stay or appeal it before its deadlines, per the Second Report of the Receiver, Sept. 17, 2026, paras. 12, 14, 17. In the receiver's September 9 letter, it adds that at the September 3 hearing "Justice Marion specifically noted the seriousness of this matter to your counsel to be conveyed," per the Second Report of the Receiver, Sept. 17, 2026, Appendix "B".

Six days of deadlines, as the receiver tells them

At 3:17 p.m. on September 9, less than an hour before the main deadline, the president wrote that he had no asset list and needed to go to the premises to verify each piece of equipment himself; the receiver arranged to meet him there at 9:30 the next morning, and he attended. The receiver's deficiency notice went to both men at 9:19 that night; the second director replied at 6:35 p.m. on September 10 that the president would provide "the rest of the materials" by the end of the next day, and the item-by-item answer followed at 3:57 p.m. on September 11, per the Second Report of the Receiver, Sept. 17, 2026, paras. 20–21, 31–32. On the asset and disposition listings that answer said the work would be done over the weekend, because "asset listing requires a bit of time to go through." On bank statements it said the online banking had been locked when he tried it that day and that he would go to the bank in person on the Monday. Asked for everyone with possession of or access to the books and everyone who administered the systems, it named the president himself for both, and an IT consultant overseas for the website and email, per the Second Report of the Receiver, Sept. 17, 2026, Appendix "C".

The receiver's report credits what did arrive and the help that was given, and says its concern is with the material defaults that remained at its 5 p.m. cut-off on September 16, per the Second Report of the Receiver, Sept. 17, 2026, paras. 9, 18. Receivables come first in the report: Management produced customer contacts and a subledger for Jay's Metal Products Ltd. showing about $961,031 outstanding at August 20, which the receiver again cautions may be overstated because orders were booked as receivables when they came in. For the other three companies, Management sent reports on September 11 that each showed a nil balance and no customer-level detail. The receiver says those reports "are inconsistent with the Companies' June 30, 2026 financial information," which put receivables across the group at about $5.6 million, including about $3.99 million at Jay's Metal Structural Ltd. and about $55,782 at Jay's Metal Steel Framing Ltd., "subject to the different reporting dates," per the Second Report of the Receiver, Sept. 17, 2026, paras. 25–26 and Appendix "E". It asked on September 14 for current reports or an explanation of the nil balances, with invoices, delivery slips and a listing of unbilled work, and says it still cannot tell whether those receivables were collected or transferred before or after the receivership, per the Second Report of the Receiver, Sept. 17, 2026, paras. 27–28.

Elsewhere on the list, the report records no complete inventory, asset or bank-account list, no disposition list with sale documents, and no bank statements or the cheque, wire and e-transfer records behind them. There was an employee list with start dates and a statement that no payroll was outstanding, but no individual termination dates; the September 11 answer said termination notice had gone to all staff by mass email and attached the letter, and the receiver says the attachment never reached it, per the Second Report of the Receiver, Sept. 17, 2026, paras. 34, 37, 40–42. The report connects the missing payroll records to two outside obligations: the receiver has a 45-day statutory window to help former employees claim under the Wage Earner Protection Program Act, and the Canada Revenue Agency has told it of outstanding T4s and that the accounts are going to an auditor for a deemed-trust examination, per the Second Report of the Receiver, Sept. 17, 2026, paras. 43–44. Management had not corrected the receiver's written understanding that the companies had no external accountants; reading a partial creditor list, the receiver found a local accounting firm, which told it that it prepared financial statements for one entity and understood another provider did the tax work, per the Second Report of the Receiver, Sept. 17, 2026, paras. 48–50.