Sea Smoke: a busy restaurant, and the ventures its trustee says it paid for

Sea Smoke is a seafood and Atlantic cuisine restaurant at 1477 Lower Water Street on the Halifax waterfront, run by a numbered company, 3344150 Nova Scotia Limited, that was incorporated on January 8, 2021; its lease from the landlord, Southwest Properties Limited, is dated a week later. It employs approximately 69 people, per the First Report of the Proposal Trustee, Sept. 4, 2026, paras. 16, 18, 37(a). Its internal statements put restaurant sales for June 2026 at $606,757.96, against $601,951.25 in June 2025, and for the first six months of the year at $1,660,634.84, up from $1,561,750.76, with the half-year loss narrowing to $15,376.12 from $138,731.22, per the First Report, Sept. 4, 2026, App. F. Having reviewed those numbers, the proposal trustee wrote that "The Company appears to be able to generate positive cashflow from operations" (First Report, para. 23(a)).

The company is part of Beyond Hospitality Group, which its counsel describes as "a restaurant collective operating in Halifax, Nova Scotia," and the causes its trustee reports begin with the group's other restaurants (Motion Brief, Sept. 3, 2026, para. 1). On August 12, 2026 it filed a notice of intention to make a proposal under s. 50.4(1) of the Bankruptcy and Insolvency Act, Estate No. 51-3409794, with Grant Thornton Limited as proposal trustee, per the Certificate of Filing of a Notice of Intention to Make a Proposal, Aug. 13, 2026; the notice itself is dated August 6 (Form 33, Notice of Intention to Make a Proposal, Aug. 6, 2026). A related company, Vandal Doughnuts Inc., filed its own notice the same day with the same trustee under Estate No. 51-3409840. That estate is not part of the motion now before the Supreme Court of Nova Scotia in Bankruptcy and Insolvency, which asks for 45 more days of stay, to October 26, 2026, per the Motion Brief, Sept. 3, 2026, paras. 5–7, 12. Phil Clarke, a senior vice president, signed the trustee's First Report on September 4.

Crème, Asia, a doughnut shop and a pub

The trustee took the causes from management and the company's financial advisors. First, the company "was assisting with the funding of the expansion of the Beyond Hospitality Group's restaurants in Halifax which turned out to be costly and unsuccessful": the company, its ownership and its management helped open Crème on the waterfront, a business run inside Vandal Doughnuts Inc.; helped fund part of the wind-down of the Vandal Doughnuts shop, which has closed; and helped open Asia, also on the waterfront and also closed, each of which the trustee says "drained resources from the Company," per the First Report, para. 19(a). Second, the shareholders and directors "experienced, and continue to experience numerous disagreements related to the expansion of the Beyond Hospitality Group, its operation, and how it is funded" (First Report, para. 19(b)). The last two causes are a fraud on the company's Bank of Nova Scotia account that cost it approximately $100,000, and collection action by the Canada Revenue Agency, including garnishment of its bank accounts, over what the trustee calls significant outstanding balances (First Report, paras. 19(c)–(d)).

The trustee's review of the historical financial information puts figures on the first cause. 100318 PEI Inc., which the trustee describes as controlled by Kent Scales, the company's president and one of its two directors, invested approximately $2,132,920 in the company. The company "has in turn funded" $1,352,307 for Asia; $813,663 toward replacing Asia with a proposed British pub-style restaurant; $518,367 for Vandal Doughnuts; and $724,454 for 4558666, "a non arms length construction company," per the First Report, paras. 17, 23(b)–(c). Vandal Doughnuts' own creditor list, attached to the report, shows 3344150 Nova Scotia Limited as a creditor for $518,366.84, alongside the Bank of Montreal as secured creditor for $500,447.84 and 100318 P.E.I. Inc. for $2,090,148.75, in total creditors of $4,029,678.96 (First Report, App. B).

Zoey Boosey is the company's other director and its secretary. The two directors met on April 22, 2026, when, according to the minutes, the chairman reported that the company "was no longer able to meet its obligations generally as they became due," and the board resolved that it file a notice of intention with Grant Thornton as trustee (First Report, App. D).

The Crown & Anchor

The proposed pub had a name and an address. By a second lease dated May 2, 2024, Southwest leased the company premises at 1475 Lower Water Street, where it intended to open a British-style pub and restaurant under the proposed name Crown & Anchor; Southwest has told the trustee that lease was terminated following the tenant's default (First Report, para. 37(b)).

Southwest has sued the company and both directors, as indemnitors, in the Supreme Court of Nova Scotia, by a notice of action signed July 16, 2026. Its statement of claim alleges that the lease ran ten years and six months after a fixturing period, came with a $300,000 leasehold allowance from the landlord, and was backed by a joint and several indemnity from Ms. Boosey and Mr. Scales, unconditional for the first five lease years to a maximum of $500,000. The landlord says it paid a broker's commission of $75,251.40 plus HST and spent approximately $208,000 on landlord's work; that the fixturing period ended on January 31, 2026 with no fixturing work done; that the company missed its first rent payment on February 1, along with $9,725.33 plus HST in operating costs and taxes, and told Southwest it intended to abandon its plans for the pub; and that Southwest terminated the lease a short time after a default notice given on or around February 4. It claims special damages under the lease and its indemnity, costs and prejudgment interest, per the First Report, App. J, Statement of Claim, paras. 5–12. The trustee's schedule of liabilities carries two entries for Southwest, of $9,179.13 and $950,000.00, and reports that the Sea Smoke lease remains in effect and current apart from an invoice for propane used before the filing (First Report, paras. 24, 37(a)).

What the Crown says it is owed

The creditor list that went out with the notice named one secured creditor, Scotiabank, at $245,721.19, and put the largest unsecured claims at $2,132,919.78 for 100318 P.E.I. Inc. and $796,792.41 for CRA, in total creditors of $3,252,209.76, per the Creditor Listing as at August 13, 2026, p. 1.

The trustee faxed the creditors' package to CRA on Friday, August 14, asking that the garnishment be lifted. That same day CRA's account manager told the trustee he was moving to a new role and a new manager would be appointed, and the trustee's repeated attempts to reach CRA about the garnishment and the proceeding were without success until September 1. On that date CRA told the trustee it had issued notices lifting the garnishments on August 20, and re-sent them. The company, which had moved its point-of-sale system to another bank account when the garnishment issued, has since redirected it to its Scotiabank account (First Report, paras. 25–29, 35, 43).

Also on or around September 1, the trustee received CRA's proof of claim, dated August 20, for $1,954,179.46. Its Schedule A splits the debt in two. As an unsecured claim it lists $821,524.85: $62,606.21 in payroll deductions described as "non deemed trust," assessed for 2024 to 2026, and $758,918.64 under the Excise Tax Act, $708,800.93 of it principal, for periods from September 30, 2024 to June 30, 2026. As a claim under s. 60(1.1) of the BIA it lists $1,132,654.61, made up of $889,686.82 in principal and $242,967.79 in penalty and interest, on the account numbered RP0001, per the First Report, para. 30 and App. H, Sched. A. The trustee reads that account reference as indicating a payroll claim, and is seeking clarification of the claim.