Metro Infrastructure: a receivership order with an August 5 trigger

Metro Infrastructure Inc. is, in its lender's words, a construction company "specializing in the installation and improvement of communications network infrastructure, with projects throughout Ontario and Alberta, and operations in Brampton and London, Ontario," per the Affidavit of Christopher Schulze, May 8, 2026, para. 2. It has 98 employees and works from industrial property owned by an affiliate, Nusi Holdings Inc.: 10 Edvac Drive in Brampton, and 2069 and 2073 Piper Lane in London. A third company, Nitro Utility Services Inc. of Shelburne, guarantees Metro's debt to Royal Bank of Canada, and Dipchand Daniel Gildharry, whom the bank describes as a principal of all three, guarantees the debts of Metro and Nusi, per the Affidavit of Christopher Schulze, May 8, 2026, paras. 3–9. KPMG Inc.'s first statement as receiver adds a leased industrial facility at 8 Edvac Drive to the places the companies operate from, per the Notice and Statement of the Receiver, Aug. 14, 2026, para. 4(c).

On June 19, 2026, Justice Moser of the Ontario Superior Court of Justice, at London, signed an order on RBC's application under s. 243(1) of the Bankruptcy and Insolvency Act and s. 101 of the Courts of Justice Act appointing KPMG as receiver and manager of all of the assets of Metro, Nusi and Nitro, including the three properties, in court file No. CV-26-00001134-0000. The order recites "the consent of the parties, filed," per the Order (Appointing Receiver), June 19, 2026, recitals. In its second paragraph it also held itself back: paragraphs 5 to 35, which carry the appointment, the receiver's powers, the stay and the charges, were to be "effective only upon the occurrence of an Appointment Event and the filing with the Court of an Appointment Certificate," per the Order (Appointing Receiver), June 19, 2026, para. 2. Paragraph 3 defined the event. It would occur if the indebtedness owing to the bank, "including all accruing interest, professional and legal fees, and the professional fees of KPMG INC. and its counsel," was not paid in full by August 5, 2026, and evidence satisfactory to the bank that all of the debtors' accounts with the Canada Revenue Agency were current on remittances and filings was not provided by the same day. Full repayment together with that evidence would instead have the bank file a Payment Certificate, per the Order (Appointing Receiver), June 19, 2026, paras. 3–5.

On August 6, the bank's lawyers filed the certificate: "an Appointment Event, as defined in the Order, has occurred and therefore, as provided for in the Order, paragraphs 5 to 35 of the Order are now effective," per the Appointment Certificate, Aug. 6, 2026. KPMG began to take possession and control of the property that day, per the Notice and Statement of the Receiver, Aug. 14, 2026, paras. 1, 3.

The trigger was not in the order RBC first asked for. The draft attached to its notice of application, returnable June 12 by Zoom, appointed KPMG in its second paragraph, with no condition attached, per the Notice of Application, May 21, 2026, Sched. "A-1", para. 2. On June 5, the bank's counsel told the court the application would proceed by argument on all issues, with a time estimate of 45 minutes, per the Application Confirmation Form, June 5, 2026, paras. (b), (d). No endorsement explaining the conditional structure is in the record read for this piece.

A margin deficit, and a fixed charge coverage of 0.35

The record holds no account from the companies of how they came to this. The narrative is the bank's, sworn on May 8 by Christopher Schulze, a director in RBC's Special Loans and Advisory Services group.

Metro borrowed under a letter agreement of February 12, 2024: a $6,000,000 revolving demand facility, a further $1,500,000 revolving facility available from June 1 to November 30 each year, and lease facilities. Borrowings above $2,000,000 were capped by a margin formula: 75% of good Canadian and U.S. receivables and 85% of privately insured ones, less potential prior-ranking claims. Metro and Nusi together had to hold a fixed charge coverage ratio of not less than 1.1:1, per the Affidavit of Christopher Schulze, May 8, 2026, Ex. "G", pp. 1–3.

The affidavit says the bank engaged KPMG as its financial advisor under an engagement letter dated October 30, 2025, which the debtors consented and agreed to on November 4, per the Affidavit of Christopher Schulze, May 8, 2026, para. 32. On December 10, Mr. Schulze wrote to Metro that "certain results of the Engagement have confirmed that the Borrowing Limit Certificates filed by the Borrower required adjustment resulting in the Borrower having no borrowing availability over the $2,000,000 allocated for real estate," per the Affidavit of Christopher Schulze, May 8, 2026, Ex. "BB" (letter of Dec. 10, 2025), p. 1. As at December 10, on the October 2025 borrowing base, the revolver was over its limit by $3,247,861.03, a margin deficit the letter called "a substantial concern to the Bank." The letter said the fixed charge coverage "was calculated at 0.35, as of June 30, 2025," capped the revolver at $5,245,000 and required the deficit paid in full by December 31, 2025, per the Affidavit of Christopher Schulze, May 8, 2026, Ex. "BB" (letter of Dec. 10, 2025), pp. 1–2.

The affidavit's list of defaults has four items: arrears to the CRA on account of HST of $927,939.29 at December 31, 2025, "which were cleared"; missed payments, with Nusi delinquent for 139 days as of May 7, 2026; borrowing by Metro over its credit limits; and the covenant breach. The bank delivered demands and notices of intention to enforce security under s. 244(1) of the BIA to Metro on January 8, 2026 and to Nusi on February 9, per the Affidavit of Christopher Schulze, May 8, 2026, paras. 10, 34–35.

Forbearance, with the consents in escrow

The companies told the bank they were seeking a refinancing from a third-party lender large enough to repay it. On February 27, 2026, the bank, the three companies and Mr. Gildharry signed a forbearance agreement running to April 30, per the Affidavit of Christopher Schulze, May 8, 2026, paras. 36–37. Its recitals record that no credit was available to Metro under the revolver, which had been terminated, and that the bank had been "permitting Metro access to cleared cash on deposit," per the Affidavit of Christopher Schulze, May 8, 2026, Ex. "EE" (Forbearance Agreement), recital H. At signing, $200,000 from the borrowers' accounts was to go against the operating loan. By March 31, Mr. Gildharry or another third party was to lend the borrowers $2,500,000, paid to the bank as a permanent reduction, and the borrowers were to produce a term sheet, letter of intent or discussion paper from a third-party lender. They owed the bank monthly reports on their CRA filings and remittances, and the bank's advisor rolling weekly cash flows with variance analysis. Failing to pay in full by the termination date and provide evidence "that all accounts with CRA are current on remittances and filings" was itself an event of default. The borrowers and Nitro signed a consent to the appointment of a receiver, and all of them a consent to judgment, both "held in escrow by the Bank's counsel, Harrison Pensa LLP," for use on a default or after the termination date, per the Affidavit of Christopher Schulze, May 8, 2026, Ex. "EE" (Forbearance Agreement), arts. 9(f), (h), (i), 13(h), 14.

The $2.5 million payment was not made by March 31, the affidavit says, and the parties signed an addendum on April 10 despite it, per the Affidavit of Christopher Schulze, May 8, 2026, paras. 38–40. Its recitals record a $200,000 bank draft from Mr. Gildharry on April 7 as a permanent reduction, and put the debt at April 8 at $8,293,828.66 for Metro and $5,980,459.92 for Nusi. Its new covenants required the borrowers to produce, by April 15, "evidence from the Toronto-Dominion Bank of a firm credit approval for financing sufficient to pay the Indebtedness in full," to pay the bank $450,000 "One (1) business day after Metro's receipt of payment from Rogers," to pay the rest by April 30, and not to make any filing or seek any stay under the BIA or the CCAA without the bank's consent, per the Affidavit of Christopher Schulze, May 8, 2026, Ex. "FF" (Addendum to Forbearance Agreement), recitals B–E, art. 2. The addendum does not say who Rogers is.

By May 8 the refinancing had not been completed. The companies had told the bank they were still trying to complete it, and the bank was "unwilling to provide the Debtors with any further credit or with any further forbearance." Mr. Schulze swore that "All credit to Metro has been terminated since February 2026 and has been operating from available cash," per the Affidavit of Christopher Schulze, May 8, 2026, paras. 41, 51–52.

What the bank argued

Quoting Justice Kimmel in The Toronto-Dominion Bank v. JBT Transport Inc., 2025 ONSC 1436, RBC's factum said "Commercial certainty for all stakeholders dictates that the parties should expect that courts will hold them to their bargains, absent further agreement or circumstances that would make it appropriate to nullify or remove the order," per the Factum of the Applicant, June 5, 2026, paras. 58–59. On the refinancing, citing Macquarie Equipment Finance Limited v. Validus Power Corp., 2023 ONSC 4772, the factum argued that "a potential refinancing to pay the Obligations is not grounds to avoid the appointment of a receiver," and that a receiver could pursue a possible refinancing in addition to whatever options a court-supervised sales process might reveal, per the Factum of the Applicant, June 5, 2026, paras. 56–57. Among the factors it said made a receiver just and convenient, the bank said it had "lost confidence in the Debtors' management" because the debtors "have not advised or provided evidence of alternatives to a receivership that stand any reasonable chance of success," per the Factum of the Applicant, June 5, 2026, para. 60(e).

The application also sought judgment against Mr. Gildharry on his guarantees for $8,005,381.07 in respect of Metro's debt and $5,998,488.93 in respect of Nusi's, with interest at the bank's prime rate plus 5%, which the notice put at 9.45% a year, per the Notice of Application, May 21, 2026, para. 2. The June 19 order does not deal with that claim.

Who is owed

At May 1, 2026, Metro owed RBC $8,005,381.07: $4,963,000.88 on the revolving demand facility, $3,026,928.30 on the lease facility and $15,451.89 on an auto loan. Nusi owed $5,998,488.93 on two term facilities, of $4,454,157.36 and $1,544,331.57. Metro and Nusi guarantee each other's debts. Nusi and Nitro guarantee Metro's debt up to $12,500,000 each, Metro guarantees Nusi's up to $1,575,000 and $4,750,000 under two guarantees, and Mr. Gildharry guarantees up to $12,500,000 for Metro and $6,285,000 for Nusi. The London properties carry a $1,575,000 mortgage and the Edvac Drive property an $8,600,000 one, both in the bank's favour and each a first charge, the bank says, per the Affidavit of Christopher Schulze, May 8, 2026, paras. 13–21, 25.

KPMG's statement of August 14 lists RBC at $14,003,870, taken from the bank's affidavit, followed by Kubota Canada Ltd. at $3,659,745, Sprucewood Leasing Limited at $152,361 and Mercedes-Benz Financial Services Canada Corporation at $93,240. Six other registrants, among them HSBC Bank Canada's leasing division, Bank of Montreal and Ford Credit Canada Company, are listed at amounts unknown to the receiver, which says it has not obtained a legal opinion on any creditor's security. Its appendix of known creditors, as at August 6, totals $19,404,161. Secured creditors account for $17,968,344 of it, and unsecured creditors for approximately $1,321,784, among them Northcrete Concrete Supply Limited at $159,736, Toronto Ca Solutions Inc. at $156,122, Sajjan Hydrovac Inc. at $143,529 and Danplas Pipe Systems at $118,742. The Receiver General for Canada is listed as a potential priority claim of $114,033, beside employees at an unknown amount, per the Notice and Statement of the Receiver, Aug. 14, 2026, paras. 4(d)–(e) and App. "A".

The same statement gives book values from the debtors' most recent unaudited statements, at June 30, 2025: $14,871,080 for Metro, including $5,562,891 of receivables, $1,927,196 of holdbacks receivable and $7,276,072 of property and equipment; $6,037,833 for Nusi, including $5,985,726 of property, plant and equipment; and $266,397 for Nitro. KPMG adds that book values "do not necessarily represent the realizable value of assets, which may differ materially from the book value," per the Notice and Statement of the Receiver, Aug. 14, 2026, para. 1.

The powers now in force

With the certificate filed, the order's operative paragraphs apply. They stay proceedings against the debtors and their property except with KPMG's written consent or the court's leave. The employees remain employees of the debtors until the receiver terminates them. KPMG is empowered to sell property outside the ordinary course without court approval in transactions of up to $250,000, to an aggregate of $1,000,000; anything larger needs the court's approval. The receiver and its counsel have a first-ranking charge for their fees and disbursements, subject to ss. 14.06(7), 81.4(4) and 81.6(2) of the BIA, and KPMG is empowered to borrow up to $500,000, secured by a charge ranking behind the receiver's charge. RBC is to have its costs, paid by the receiver from the debtors' estate with such priority and at such time as the court may determine, per the Order (Appointing Receiver), June 19, 2026, paras. 6(k), 12–13, 17, 21, 24, 34.

Pritesh Patel, a senior vice-president of KPMG, signed the statement; the case website the order established is www.kpmg.com/ca/Metro. The statement says the estimated realizable value of the property is unknown, and gives the receiver's plan in one sentence: "to evaluate realization strategies for the Property and pursue same," per the Notice and Statement of the Receiver, Aug. 14, 2026, paras. 1, 4(f). The record as of August 14 schedules no further attendance.