1743122 Ontario Inc., 3851168 Canada Inc. and 798862 Ontario Limited (formerly known as Kraus Inc., Kraus Canada Inc.,and Strudex Fibres Limited respectively), and 538626 B.C. Ltd.

Receivership

Page last updated: November 14, 2012

This page is for information purposes only and you should consult your professional adviser if you have any questions or are uncertain as to your rights or obligations.


On June 11, 2012, pursuant to an application by Pinnacle Capital Resources Limited in its capacity as general partner of Red Ash Capital Partners II Limited Partnership ("Red Ash"), the Ontario Superior Court of Justice (Commercial List) (the "Court") granted an Order pursuant to section 243(1) of the Bankruptcy and Insolvency Act, R.S.C. 1985, c.B-3, as amended (the "BIA") appointing PricewaterhouseCoopers Inc. ("PwC") as receiver of all of the assets, undertakings and properties of respect of Kraus Inc., Kraus Canada Inc., and Strudex Fibres Limited and 538626 B.C. Ltd. (collectively the "Companies"). A copy of the Order can be found in the Court Orders section of this website.

On the same day, the Court authorized and approved the sale transaction contemplated by an asset purchase agreement between (the “Sale Agreement”) between the Receiver and Kraus Brands LP (the “Purchaser”), as described in the Interim Receiver and Proposed Receiver’s Second Report to the Court dated June 10, 2012, and vesting in the Purchaser the Purchased Assets (as defined in the Sale Agreement). A copy of Sale Approval and Vesting Order can be found in the Court Orders section of this website. A Copy of the Interim Receiver and Proposed Receiver’s Report can be found in the Reports section of this website.

On June 13, 2012, the corporate names of Kraus Inc., Kraus Canada Inc. and Strudex Fibres were changed as required by the Sale Agreement to 1743122 Ontario Inc., 3851168 Canada Inc. and 798862 Ontario Limited respectively.

For information on the bankruptcy proceedings, please visit our website at www.pwc.com/car-krausbankruptcy.


Status of File as at November 14, 2012

On November 9, 2012, the Court granted an order that:

  1. approved the activities of the Receiver as set out in its Third Report, Fourth Report and Supplementary Reports;
  2. that any and all cash held by the Receiver in the Priority Charge Reserve and the s81.1 Claims Reserve be deemed to be held by the Trustee to satisfy any claims that may be subject to the BIA Charge and until such time as the claim to the applicable s81.1 Asset is determined, by agreement among the Trustee, the claimant and the Purchase or as by further order of the Court;
  3. authorized the Receiver to distribute to Red Ash any and all residual funds remaining in the receivership after payment of all expenses and costs; and
  4. discharged the Receiver, effective upon filing the Receiver’s Discharge Certificate with the Court.

The Court dismissed Equistar’s motion except for the portion relating to the unsealing of the Confidential Appendices which was adjourned to be brought back on, if so desired, on proper notice to Red Ash and the Receiver. A copy of the Order and the Endorsement of the Honourable Mr. Justice Pattillo is posted under the Court Orders tab.

Status of file as at November 6, 2012

On November 5, 2012, the motion was further adjourned to November 7, 2012.

Status of file as at October 15, 2012

On October 9, 2012, the Receiver filed its Fourth Report to the Court to:

  1. provide the Court with information in respect of:
    1. the Receiver’s activities since the Date of Appointment;
    2. the Closing of the Purchase Transaction;
    3. the status of the s.81.1 Claims and the Priority Claims;
    4. the status of the Companies’ Contracts (as defined in the Sale Agreement) and Real Property Leases; and
    5. the Receiver’s R&D; and
  2. seek an order of the Court:
    1. approving the Third Report and the Fourth Report of the Receiver and the actions and activities of the Receiver as set out therein;
    2. authorizing the Receiver to transfer the residual balance of the Priority Claims Reserve in the amount of $24,500 to the Trustee in trust and authorizing the Trustee to administer the Priority Claims reserve in respect of any valid claims related to the BIA Charges, and upon the Trustee’s discharge to distribute any remaining balance of the Priority Claims Reserve to the Purchaser;
    3. authorizing the Receiver to transfer to the Trustee in trust the residual balance of the s.81.1 Trust Fund to be held by the Trustee pending an agreement by the applicable parties or further order of the Court with respect to the s.81.1 Claim filed by Equistar Chemicals LP;
    4. authorizing the Receiver, pursuant to the funding term sheet dated as at June 8, 2012 between and Receiver and Red Ash, to distribute to Red Ash any residual funds remaining in the receivership upon the Receiver’s discharge; and
    5. declaring that upon the Receiver filing a discharge certificate, PwC has duly and properly discharged its duties, responsibilities and obligations as the Receiver and discharging and releasing the receiver.

A motion will be heard on October 16, 2012. On October 16, 2012, the motion was adjourned until November 5, 2012.

Status of file as at June 14, 2012

On June 11, 2012, pursuant to applications made by Pinnacle Capital Resources Limited, in its capacity as general partner of Red Ash Capital Partners II Limited Partnership, the Ontario Superior Court of Justice in Bankruptcy and Insolvency issued orders pursuant to the Bankruptcy and Insolvency Act, R.S.C. 1985, c B-3 as amended (the “BIA”) adjudging each of Kraus Inc., Kraus Canada Inc. and Strudex Fibres Limited (the “Companies”) bankrupt. All details on the bankruptcy is posted on the bankruptcy website at www.pwc.com/car-krausbankruptcy.


This Web site will be updated as information becomes available.