1325775 Ontario Inc., Winddown RSKAPP, Inc. and 4172507 Canada Inc.

Receivership

Page last updated: February 14, 2019

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 September 14, 2018, on the application of B.E.S.T. Active 365 Fund LP, Tier One Capital LP, B.E.S.T. Total Return Fund Inc., B.E.S.T. Active Fund 15 LP, B.E.S.T. Active Fund 16 LP, B.E.S.T. Active Fund 17 LP, B.E.S.T. Active Fund 19 LP, B.E.S.T. Active Fund 20 LP, B.E.S.T. and Special Purpose Fund 1 LP (collectively, the "Applicants"), an Order was granted by the Ontario Superior Court of Justice (Commercial List) (the “Court”), pursuant to section 243(1) of the Bankruptcy and Insolvency Act, R.S.C. 1985, c.B-3, as amended (the “BIA”) and section 101 of the Courts of JusticeAct (the “COJ”), R.S.O. 1990, c.C-43, as amended, appointing PricewaterhouseCoopers Inc., LIT (“PwC”) as receiver and manager (in such capacity, the "Receiver") without security, of all of the assets, undertakings and properties of 1325775 Ontario Inc. (formerly known as Intelligent Mechatronic Systems Inc.) (“IMS”) and 4172507 Canada Inc. (formerly known as Ridetones Inc.) (“Ridetones”, and collectively with IMS, the “Companies”).

On December 13, 2018pursuant to an order (the "Solutions Order") of the Court, IMS Solutions, Inc. (“Solutions”), an inactive wholly owned U.S. based subsidiary of IMS, was added as a respondent in the receivership proceedings and PwC was appointed as Receiver of Solutions pursuant to section 243(1) of the BIA and section 101 of the COJ.

A Notice and Statement of the Receiver was mailed to all known creditors of the Companies in accordance with the provisions of the BIA. A copy of the Notice is available on the Notices page of this website.


Status of file as of February 14, 2019

On February 14, 2019, the Court issued an order (the “Discharge Order”), which among other things:

1. approved the actions and activities of the Receiver as set out in the Third Report;

2. approved the Receiver’s Statement of Receipts and Disbursements to February 6, 2019;

3. authorized the Receiver to make distributions to B.E.S.T Active 365 Fund LP and B.E.S.T Total Return Fund Inc., in their capacity as agent for and on behalf of the Applicants, up to the amount of the secured obligations owing to the Applicants;

4. approved the Outstanding Professional Fees and the Remaining Professional Fees (as defined in the Third Report) to complete the administration of the receivership proceedings;

5. terminated, discharged and released the Iberis Work Fee Charge;

6. terminated, discharged and released the KERP Charge;

7. terminated, discharged and released the Receiver’s Borrowings Charge;

8. discharged PwC as the Receiver, effective upon the Receiver filing the Discharge Certificate with the Court; and

9. discharged and released PricewaterhouseCoopers Inc. from any and all liability that PwC now has or may hereafter have by reason of, or in any way arising out of, the acts or omissions of PwC, while acting in its capacity of Receiver herein, save and except for any gross negligence or willful misconduct on the Receiver’s part.

Status of file as of February 7, 2019

On January 7, 2019 the Receiver filed its third report (the “Third Report”) as part of a motion filed by the Receiver to provide information to the Court with respect to the following items:

a. the receivership of  Solutions;

b. the closing of the Transaction;

c. the Receiver’s activities since the date of the Second Report;

d. the Remaining Duties (as defined in the Third Report) of the Receiver;

e. the final statement of receipts and disbursements  from the Date of Appointment to February 6, 2019 (“Final R&D”) and the establishment of a cash reserve (“Reserve”) for the Receiver’s estimated Remaining Obligations (as defined in the Third Report);

f. the professional fees and disbursements of the Receiver and its legal counsel Borden Ladner Gervais LLP (“BLG”) and U.S. legal counsel, Chipman Brown Cicero & Cole, LLP (“Chipman”);

and to seek an order of the Court, inter alia:

g. approving the activities of the Receiver as described in the Third Report;

h. approving the Final R&D and the Reserve for the Remaining Obligations in these Receivership Proceedings;

i. approving the Receiver’s Fees and Disbursements (as defined in the Third Report) as set forth in the Prince Affidavit (as defined in the Third Report) for the period up to and including January 31, 2019 and the Remaining Receiver’s Fees (as defined in the Third Report) to complete the Receiver’s Remaining Duties;

j. approving BLG’s Fees and Disbursements (as defined in the Third Report) as set forth in the Mason Affidavit (as defined in the Third Report) for the period up to and including January 31, 2019 and the Remaining BLG Fees (as defined in the Third Report) to assist the Receiver to complete the Receiver’s Remaining Duties;

k. approving Chipman’s Fees and Disbursements (as defined in the Third Report) as set forth in the Desgrosseilliers Affidavit (as defined in the Third Report) for the period up to and including January 31, 2019;

l. authorizing and directing the Receiver to pay all such outstanding professional fees and disbursements of the Receiver and its legal counsel, BLG and Chipman (“Outstanding Professional Fees”);

m. authorizing and directing the Receiver to pay any professional fees or disbursements of the Receiver and BLG which exceed the Remaining Receiver’s Fees and Remaining BLG Fees set out in the Prince Affidavit and the Mason Affidavit respectively, with either: (1) the consent of BEST Agents; or (2) pursuant to a further Order of the Court;

n. discharging and terminating the Receiver’s Borrowing Charge (as defined in the First Report) in the amount of $3,000,000;

o. discharging and terminating the KERP Charge (as defined in the First Report) in the amount of $250,000;

p. discharging and terminating the Iberis Work Fee Charge (as defined in the First Report) in the amount of $150,000;

q. authorizing and directing the Receiver to:

i. distribute an interim distribution (the “Interim Distribution”) in the amount of $800,000 to BEST Agents, from the Receiver’s available cash on hand, subject to the Receiver holding a Reserve to satisfy the Remaining Obligations; and

ii. authorizing and directing the Receiver, upon satisfaction of the Remaining Obligations in full, to pay any remaining funds on hand to BEST Agents, up to the amount of the Company’s obligations to BEST as set out in the Affidavit of John Richardson sworn September 13, 2018 (“Richardson Affidavit”) and filed in support of the Receivership Application (the “BEST Indebtedness”), without further order of this Court; and

iii. subject to the Receiver completing the administration of the Receivership Proceedings and the Receiver filing a certificate with the Court confirming that it has completed all of the steps necessary to complete the Receivership Proceedings (the “Discharge Certificate”), releasing and discharging PwC from any and all liability that PwC now has or may hereafter have by reason of, or in any way arising out of, the acts or omissions of PwC while acting in its capacity as Receiver, save and except for any gross negligence or willful misconduct on the part of PwC.

This motion will be heard on February 14, 2019.

Status of file as of January 30, 2019

As contemplated by the Sale Approval and Vesting Order, article of amendment was filed changing the name of IMS Solutions Inc. to Winddown RSKAPP Inc.

Status of file as of January 3, 2019

As contemplated by the Sale Approval and Vesting Order, articles of amendment were filed changing the names of each of the Companies from IMS to 1325775 Ontario Inc. and from Ridetones to 4172507 Canada Inc.

Status of file as of December 19, 2018

On  December 19, 2018 a Notice and Statement of the Receiver  (the “Notice”) was mailed to all stakeholders of IMS Solutions, Inc. to provide information on the Appointment of PricewaterhouseCoopers Inc. as receiver and manager, without security, of IMS Solutions Inc.   A copy of the Notice is available on the Notices page of this website

Status of file as of December 13, 2018

On December 13, the Court issued an order (the “Sale Approval and Vesting Order”), which, inter alia:

a.  approved the Sale Process conducted by the Receiver;

b.  approved the Trak APA and the Transaction recommended by the Receiver as described in the Second Report;

c.  vested IMS’ and Solutions’ right, title and interest, if any, in and to the Purchased Assets (as defined in the Trak APA) in and to the purchaser, free and clear of all encumbrances, save and except for permitted encumbrances; and

d.  sealed Confidential Appendices “A” and “B” (as defined in the Second Report).

On the same day, a further order (the “Solutions Order”) was issued by the Court, which, inter alia:

a.  approved the activities of the Receiver as described in the First Report and Second Report;

b.  approved the statement of receipts and disbursements  from the date of appointment to November 30, 2018; and

c.  appointed PwC as Receiver of Solutions and added Solutions as a respondent in the receivership proceedings.

 

Status of file as of December 6, 2018

On December 6, 2018 the Receiver filed its second report (the “Second Report”) as part of a motion filed by the Receiver to provide information to the Court with respect to the following items. This motion will be heard on December 13, 2018. 


a.  the Receiver’s activities since the date of the First Report;

b.  IMS’ wholly-owned U.S. subsidiary, IMS Solutions, Inc. (“Solutions”), including the Receiver’s request for an order adding Solutions as a respondent in the receivership proceedings;

c.  IMS’ statement of receipts and disbursements (“R&D”) from the date of appointment to November 30, 2018;

d.  the Sale Process conducted by the Receiver;

e.   an asset purchase agreement dated December 4, 2018 (the “Trak APA”) between the Receiver and Trak Global Group Limited (“Trak” or the “Purchaser”);

f.  a report from BDO Canada LLP (“BDO”) providing an estimate of the value of Trak’s common shares, assuming the transaction with Trak (the “Transaction”) is completed, for the purpose of estimating the value of the Consideration Shares (as defined in the Second Report) offered as part of the purchase price;

and to seek orders of the Court, inter alia:

a.  approving the activities of the Receiver as described in the First Report;

b.  approving the activities of the Receiver as described in this Second Report;

c.  approving the R&D;

d.  appointing the Receiver as receiver of the assets, undertakings and properties of Solutions and amending the style of cause in these proceedings;

e.  approving the Trak APA and the Transaction recommended by the Receiver;

f.  vesting the Company’s and Solutions’ right, title and interest, if any, in and to the Purchased Assets (as defined in the Trak APA) in and to the Purchaser, free and clear of all encumbrances, save and except for permitted encumbrances;

g.  sealing Confidential Appendices “A” and “B” (as defined in the Second Report); and

h.  approving the distribution, as proposed in the Second Report.

 

Status of file as of October 1, 2018

On October 1, 2018, the Court granted an order (the “Sale Process Order”), which among other things:

a. approved the Sale Process;

b. approved the KERP and the KERP Charge up to a maximum aggregate amount of CDN $250,000;

c. approved the Iberis Work Fee Charge up to a maximum aggregate amount of CDN $150,000;

d. approving the Receiver's R&D; and

e. sealing Confidential Appendix “A” to the First Report.

Status of file as of September 27, 2018

On September 27, 2018, the Receiver filed its first report (the “First Report”) with the Court as part of a motion filed by the Receiver to provide information to the Court with respect to:

a.  the Receiver’s activities since the date of appointment to the date of this First Report;

b. background with respect to the sale and investor solicitation process (the “SISP”) undertaken by IMS and Iberis Advisors LLC (“Iberis”), which was engaged by IMS to assist in connection with its intent to complete a sale of its business, shares and/or assets;

c. the Receiver’s proposed sale process (the “Sale Process”);

d. the proposed Key Employee Retention Plan (“KERP”) for certain key employees of IMS;

e.  the Receiver’s statement of receipts and disbursements (“R&D”) from the date of appointment to September 21, 2018;

and to seek an order of the Court:

f. approving the Sale Process;

g. approving the proposed KERP and a charge over the Property to secure the payment of the KERP in the amount not exceeding $250,000 (the “KERP Charge”);

h. approving the proposed Iberis Work Fee Charge (as defined in the First Report) in the amount not exceeding $150,000;

i. approving the Receiver's R&D; and

j. sealing Confidential Appendix “A” (as defined in the First Report).

The motion will be heard on October 1, 2018.

 

Status of File at September 21, 2018

On September 21, 2018 a Notice and Statement of the Receiver was mailed to all known creditors of the Companies in accordance with the provisions of the BIA.  A copy of the Notice is available on the Notices page of this website

 

This Web site will be updated as information becomes available.

For more information, please contact: Natalia Chtcherbakova, Telephone: +1 416 687 8414, or via Email

 

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Natalia Chtcherbakova

Senior Associate

Tel: +1 416 941 8383

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