Quality Pipefitting: source deductions first, then $165,000 over 18 quarters

The proposal trustee's report describes Quality Pipefitting Systems Inc. in one sentence: the Mississauga company "provides plumbing services for the construction of car washes," per the Report of Trustee on Proposal, Aug. 19, 2026, para. 9. According to the notes to its cash-flow forecast, Quality is working on the construction of a car wash in Sault Ste. Marie and expects a single receipt of $51,000 in the 13 weeks to October 10, 2026. Payroll is three contract employees, two paid weekly and one monthly, with no payroll remittances; occupancy is a storage locker, vehicle and liability insurance and cell phones; and general and administrative spending runs to vehicle lease payments, hotels and gas, because the contractors are working remotely in Sault Ste. Marie, per the Cash Flow Forecast and Major Assumptions, App. "A" to the Report of Trustee on Proposal, Creditor Package, Aug. 20, 2026, pp. 44–46.

On July 14, 2026 the company filed a notice of intention to make a proposal under s. 50.4(1) of the Bankruptcy and Insolvency Act in the Mississauga division of the Ontario bankruptcy district, estate No. 32-3397915, naming Dodick Landau Inc. as licensed insolvency trustee. The Official Receiver's certificate records that all proceedings against it were stayed under s. 69(1) as of that day, per the Certificate of Filing of a Notice of Intention to Make a Proposal, July 14, 2026. The proposal followed on August 13, styled in the Ontario Superior Court of Justice (In Bankruptcy and Insolvency) and signed for the company by Robert D'Angela, who swore its statement of affairs the same day, per the Proposal, Aug. 13, 2026, pp. 1, 12, and Statement of Affairs (Form 78), Creditor Package, Aug. 20, 2026, pp. 16, 27, 52. The creditors are to vote on it by videoconference on September 3, per the Report of Trustee on Proposal, Aug. 19, 2026, paras. 1, 4.

Rent doubled, and customers paid later

The account of how the company got here is management's, as the trustee relays it. Quality's work began to slow around the onset of the COVID-19 pandemic. During the pandemic material and labour costs rose significantly while the company stayed committed to its existing contracts, which produced losses on certain jobs; at the same time the cost of its shop rental doubled, and certain customers, facing financial challenges of their own, significantly extended their payment timelines. For the past two years activity has stayed subdued, efforts to widen the customer base have not succeeded and the existing work has earned reduced margins. Unable to meet its obligations as they came due, the company "had no other readily available option but to file the Proposal on the Date of Filing to prevent irreparable harm to its business," per the Report of Trustee on Proposal, Aug. 19, 2026, paras. 11–12. On the statement of affairs, three boxes are ticked among the reasons for the company's difficulty: economic downturn, increased cost of doing business and tax liabilities, per the Statement of Affairs (Form 78), sworn Aug. 13, 2026, Creditor Package, Aug. 20, 2026, p. 49.

The externally prepared statements show net losses of $132,258 for the fiscal year ended August 31, 2024 and $316,836 for the year ended August 31, 2025, with total debt of $847,525 and $966,480 at those year-ends. Internal statements for the six months to March 31, 2026 show a profit of $24,095 and total debt of $881,660, per the Report of Trustee on Proposal, Aug. 19, 2026, para. 10.

$951,759.81, most of it owed to two creditors

The statement of affairs puts the company's assets at $226,001.00 on the filing date: $125,000.00 on deposit in a Scotiabank chequing account, $65,000.00 in accounts receivable, $36,000.00 in tools and equipment, and $1.00 for a 2025 Ford T250. Liabilities total $951,759.81, a deficiency of $725,758.81, per the Statement of Affairs (Form 78), sworn Aug. 13, 2026, Creditor Package, Aug. 20, 2026, pp. 49–50. The company's one secured creditor, the Bank of Nova Scotia, is owed nothing and is unaffected by the proposal, per the Report of Trustee on Proposal, Aug. 19, 2026, para. 13.

The Canada Revenue Agency appears three times on the list of liabilities: $317,020.18 in HST, $146,887.29 in unremitted employee source deductions and $250.00 in corporate taxes. The largest single claim, $320,056.92, belongs to Next Supply Inc. and is listed as accounts payable. After it come an individual creditor at $100,000.00, Klimatrol Environmental Systems Ltd at $42,014.95 and Wolseley Mechanical Group at $24,280.47, with the remaining entries, among them Ford Credit Canada Limited and the Workplace Safety and Insurance Board, at $250.00 or less, per the Statement of Affairs (Form 78), sworn Aug. 13, 2026, Creditor Package, Aug. 20, 2026, p. 51. The trustee puts third-party unsecured debt at approximately $804,000, owed to five known unsecured creditors. It reports no known employee preferred claims, and says the company now employs only contractors and so has no employee-related obligations, per the Report of Trustee on Proposal, Aug. 19, 2026, paras. 14–16.

Six months for the Crown, 18 quarters for the rest

The proposal puts every affected creditor in one class, holders of proven preferred and unsecured claims, which includes the Crown for everything other than the claims the proposal must pay in full. It also states that no related-party creditors have been identified, per the Proposal, Aug. 13, 2026, ss. 3(a), 8, Creditor Package, Aug. 20, 2026, pp. 20–21. The claims paid in full are the s. 60(1.1) Crown claims for unremitted source deductions. The company covenants to pay them within six months after the effective date, which is the day the court's approval order issues, and expects to do so through six monthly payments of approximately $24,500, made in addition to the money set aside for creditors, per the Proposal, Aug. 13, 2026, ss. 1(q), 4(a)–(b), Creditor Package, Aug. 20, 2026, pp. 18, 20–21. The trustee's report says those Crown payments will come from funds generated from operations, per the Report of Trustee on Proposal, Aug. 19, 2026, p. 9, note 2.

Once the Crown claim is paid, the company is to pay the trustee quarterly instalments of approximately $9,166.67 for 18 consecutive quarters, beginning in the first full month after that payment, until $165,000.00 has been paid in, per the Proposal, Aug. 13, 2026, s. 9, Creditor Package, Aug. 20, 2026, pp. 21–22. The trustee's report places the first instalment at the start of the seventh month after the effective date. The trustee pays its administrative fees and expenses from those funds first, including its own legal fees and the company's; then holds a $20,000 bankruptcy reserve against the costs of a bankruptcy if the proposal is annulled, to be distributed to creditors if it is not used; then pays any proven preferred claims in full; and shares the balance pro rata among unsecured creditors, per the Report of Trustee on Proposal, Aug. 19, 2026, paras. 23, 26. Interim distributions are at the trustee's discretion, and nothing stops the company from paying the full amount early, per the Proposal, Aug. 13, 2026, ss. 10(a), 20(e), Creditor Package, Aug. 20, 2026, pp. 22, 27.