Jeil M&S Canada: a proposal funded by claims against NextStar

Jeil M&S Canada Inc. has one customer, and the customer was building a battery plant. The company "was incorporated primarily for the purpose of providing materials and services to NextStar Energy in connection with the manufacture of a battery plant in Windsor, Ontario," according to the statement of affairs sworn by Hyeri Lee, its president, secretary and sole director, who lives in South Korea, per the Statement of Affairs (Form 78), Aug. 10, 2026, pp. 1, 3; Trustee's Report on the Proposal, s. 1. Incorporated in Ontario on November 1, 2022 and headquartered at 7181 Yonge Street in Thornhill, it provides installation and technical support services for secondary battery manufacturing equipment. Its parent, Jeil M&S Co., Ltd., is a KOSDAQ-listed maker of that equipment headquartered in Incheon, and in 2022 and 2023 it contracted with LG Energy Solution Co. Ltd. and then with NextStar Energy Inc. — a joint venture LGES and Stellantis N.V. established in July 2023, now owned fully by LGES — to design, manufacture, supply and install the electrode mixing equipment for NextStar's plant at 9655 Twin Oaks Drive, per the Trustee's Report on the Proposal, Aug. 10, 2026, s. 1 and the Proposal, July 30, 2026, art. 1.1(gg).

At 5:51 p.m. on June 30, 2026, the Official Receiver in Toronto certified that the company had filed a notice of intention to make a proposal under s. 50.4(1) of the Bankruptcy and Insolvency Act, staying all proceedings against it under s. 69(1), with Bricks Damiani Inc. as trustee, in estate no. 31-3393320, per the Certificate of Filing of a Notice of Intention to Make a Proposal, June 30, 2026. In May 2026, the trustee reports, the company "received an adverse decision in an adjudication with Black & McDonald Limited ('B&M') under the Construction Act," which determined that it must pay Black & McDonald $4,720,089, "leading to the Company seeking protection under the BIA," per the Trustee's Report, Aug. 10, 2026, s. 3. The proposal was filed on July 30, within the 30 days the trustee's July 2 letter to creditors gave the company to lodge one, subject to court extension, and on August 10 Bricks Damiani issued notice of it, with its report, calling the creditors' meeting for August 20, per the NOI Notice to Creditors, July 2, 2026, p. 1, the Trustee's Report, Aug. 10, 2026, p. 1 and the Notice of Proposal to Creditors, Aug. 10, 2026, p. 1.

A plant in Windsor, a termination in April

The trustee's account of the company's difficulties comes, it says, primarily from management, and it has not prepared an in-depth analysis or audit of the financial statements or of the claims against NextStar. The Canadian company's work on the project was led by Jeil Korea. It began in 2024 and continued until on or about April 11, 2025, when NextStar partially terminated its contract; after that it provided limited services, including commissioning. The report says the company did work at NextStar's direction during that time that was beyond the scope of the contract, and that NextStar "has refused to approve two resulting change orders, which amount to claims of $20,872,058," with a further $5,040,784 in accounts receivable outstanding from NextStar, per the Trustee's Report, Aug. 10, 2026, s. 3.

In December 2025 Jeil Korea filed for creditor protection under Korea's Debtor Rehabilitation and Bankruptcy Act, and its creditors are to vote on its rehabilitation plan on August 28, 2026. If the plan is approved, the report says, Jeil Korea intends to pursue its own claims against NextStar and, "if appropriate, may provide funding to the Company to fund the pursuit of Debtor Claims," per the Trustee's Report, Aug. 10, 2026, s. 3. Ms. Lee's statement of affairs ticks one box for the cause of the company's financial difficulty, "Legal Matters," and explains that "due to various issues that arose between the debtor and the Parent, and NextStar Energy, and other subcontractors, litigation and legal disputes arose on the Project resulting in significant financial losses," the adverse finding by Ontario Dispute Adjudication for Construction Contracts among them, per the Statement of Affairs, Aug. 10, 2026, p. 1.

The claims, in the company's telling

Appendix A to the proposal summarizes the claims the company says it will assess and, where appropriate, pursue, and it opens with a settlement: in or about July 2025, Jeil Canada, Jeil Korea and NextStar entered into Minutes of Settlement and Release over certain issues arising out of the project. The settlement dealt with claims only up to its date, July 30, 2025, and, per the appendix, "expressly excluded" the amounts claimed under two change orders, No. 1 for $14,000,874 and No. 2 for $6,871,184, which remain outstanding. After the settlement, the company says, it kept providing services, including commissioning work, "for which amounts remain owing by NextStar," per the Proposal, July 30, 2026, App. A, ss. 1, 2(1)–(2).

NextStar's position appears in the appendix only as the company describes it. On January 19, 2026, NextStar filed a proof of claim against Jeil Korea in the Korean court asserting that Jeil — the appendix's term for the two companies together — is liable for approximately CAD 157 million in damages arising from the equipment purchase contracts and the installation agreement. Jeil Korea denies those claims "as based on incorrect information and NextStar's misunderstanding of the contracts." NextStar commenced further proceedings on similar grounds on March 9, 2026, and on March 27 Jeil Korea filed a complaint with the Korean Fair Trade Commission, findings in which, the appendix says, "may impact Jeil Canada's position, including without limitation, forming grounds to set aside the Settlement," per the Proposal, July 30, 2026, App. A, ss. 1, 2(3).

The complaint's grounds, as the appendix summarizes them, are allegations against NextStar and LGES, and it reports no finding on any of them. LGES, it says, directed Jeil Korea to begin work and order long-lead items under a letter of intent dated September 30, 2022, without written contracts or specifications. LGES and NextStar delayed payment by up to 13 months, and after Jeil mobilized staff and opened a site office in Canada in February 2024 it received no payment for seven months, "severely straining Jeil's liquidity and contributing to the commencement of Jeil's rehabilitation procedure." And NextStar, the appendix says, withheld "the most important approval in the design approval process, Issued for Construction," for Jeil's piping and instrumentation diagram for two years, submitting more than 100 minor comments between April 2024 and October 2025, per the Proposal, July 30, 2026, App. A, s. 2(3)(i)–(iii).

Between January 13 and 24, 2025, the appendix says, NextStar engaged local contractors — Shuum Electric, Vollmer Inc., Black & McDonald and Mid-South Contractors — within Jeil's scope, issuing letters of intent without Jeil's prior consent. It was revealed on January 19, 2025, according to the appendix, that NextStar's purpose was to supply sample products to its customer by March 2 and March 16, 2025; on February 28 NextStar called the arrangement a "temporary solution for catching up on the delayed schedule." On April 11, 2025 NextStar gave notice of the partial termination, on what the appendix calls "erroneous and unreasonable grounds," and Jeil informed NextStar that it was terminating the installation agreement and all related agreements, citing among other grounds that NextStar "refused to pay invoices to local contractors who were unilaterally engaged by NextStar without Jeil's prior consent," per the Proposal, July 30, 2026, App. A, s. 2(3)(iv)–(v).