1153837 Ontario Inc., 4028082 Canada Inc. and 1500140 Ontario Inc. (formerly known as Karrys Bros., Limited, Karbro Transport Inc., Karrys Software Ltd. respectively)


Notice of Intention/Bankruptcy

Page last updated: February 8, 2017

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 December 12, 2014, Karrys Bros., Limited, Karbro Transport Inc. and Karrys Software Ltd. (collectively “Karrys” or the “Companies”) each filed a Notice of Intention to Make a Proposal (“NOIs”) pursuant to Section 50.4(1) of the Bankruptcy and Insolvency Act (“BIA”) and PricewaterhouseCoopers Inc. (“PwC”) was named as the proposal trustee under the NOIs (the “Proposal Trustee”).

As a result of the filing of the NOIs, all creditors are stayed from commencing or continuing any proceedings against the Companies and the Companies have a period of 30 days to file their proposal with the Proposal Trustee pursuant to the provision of the BIA (the “Initial Stay”), subject to any extensions of the Initial Stay that the Court might grant upon application by the Companies. The Proposal Trustee anticipates the Companies will seek Court approval of an extension of the Initial Stay on December 23, 2014.

Notice of the NOIs and the Trustee’s appointment was mailed to all known creditors of Karrys on December 15, 2014.

The purpose of the NOIs is to give Karrys sufficient time to complete a going concern sale of its business through a Court supervised process. The Proposal Trustee is working with Karrys during the Initial Stay period and will correspond with all creditors of the Companies further as the proposal proceeding continues.

During the period of the NOIs, Karrys intends to continue to operate on a “business as usual” basis.



Status Update at February 8, 2017

On February 6, 2017, upon receipt of the response from ESDC, the Proposal Trustee issued a final dividend of approximately 5.5 cents on the dollar to former employees, subject to the levy payable to the Office of the Superintendent of Bankruptcy, and Employment Insurance (“EI”) overpayment deductions, where applicable and as instructed by ESDC. This final distribution along with the interim distributions made on April 7, 2016 and June 13, 2016 represents a total distribution to former employees of approximately 19.8 cents on the dollar. For any questions regarding EI overpayment deductions, employees should contact ESDC directly.

Status Update at November 11, 2016

On November 8, 2016, the Proposal Trustee issued a final dividend of approximately 5.5 cents on the dollar to the unsecured creditors, subject to the levy payable to the Office of the Superintendent of Bankruptcy. This final distribution along with the interim distribution made on December 14, 2015 represents a total distribution to unsecured creditors of approximately 17.5 cents on the dollar.

Employee dividend amounts were submitted to ESDC for their review for possible overpayment of benefits. Upon receipt of the positive response from the ESDC the Proposal Trustee will distribute the final dividends to employees. The Proposal Trustee will post a further update to this website when the employee dividends are released.

Status Update at December 15, 2015

On December 14, 2015, the Proposal Trustee issued an interim dividend of 12 cents on the dollar to the creditors except the employees with proven claims pursuant to the amended plan filed by 1153837 Ontario Inc.

Employee dividend amounts were submitted to Employment and Social Development Canada (“ESDC”) for their review for possible overpayment of benefits. ESDC has advised the Proposal Trustee that the process could take up to eight weeks for their review and response to our request.

Status Update at November 17, 2015

On November 17, 2015, the Court issued an order approving the amended proposal of Karrys.

Status Update at November 13, 2015

On November 17, 2015, the Proposal Trustee will be seeking the Court’s approval of the amended proposal of Karrys.

Status Update at November 3, 2015

In accordance with section 149 (1) of the BIA a notice requiring persons to file a proof of claim (the “Notice”) was sent to all creditors of Karrys on October 30, 2015 that had not, as of that date, filed a proof of claim with the Trustee. Pursuant to section 149(1) of the BIA, if a creditor does not prove their claim within 30 days after the mailing of the Notice, the Trustee will proceed to declare a dividend without regard to claims which have not been filed. A copy of the Notice has been posted under the Notices tab of this website.

Status Update at October 29, 2015

On October 29, 2015, the Reconvened Meeting was held to consider and vote on the Amended Proposal filed by the Company. The requisite majority of creditors required to approve the Amended Proposal pursuant to the provisions of the BIA was obtained and the Amended Proposal was approved by Karrys’ creditors. As a result, a hearing will be held on November 17, 2015, to seek the Court’s approval for the Amended Proposal of Karrys accepted by the creditors at the Reconvened Meeting.

Status Update at October 19, 2015

On October 16, 2015, 1153837 filed an amended proposal (“Amended Proposal”) with the Trustee. A meeting of creditors will be reconvened (the “Reconvened Meeting”) and will be held at the Europa Convention Centre, 7050 Bramalea Road, Mississauga, Ontario, on October 29, 2015 at 11:00 a.m., for the purpose of considering the Company’s Amended Proposal. A copy of the Amended Proposal, the Trustee’s Report on the Amended Proposal, an updated list of the creditors whose claims amount to $250 or more and a Voting Letter was been mailed to creditors on October 19, 2015 and posted under the Proposal Claims tab on this website. A Proof of Claim Form or a General Proxy was not included in the mailing as both documents were mailed to all creditors on June 22, 2015 in preparation for the original Meeting and have not changed. Please visit the “Proposal Claims” section of this website.

Status Update at July 6, 2015

On July 3, 2015, the Creditors’ Meeting was held, in accordance with the notice issued to creditors, during which the creditors voted for an adjournment to the Creditors’ Meeting (the “Adjourned Meeting”) to allow the Company time to finalize the Proposal and file an amended Proposal with the Trustee (the “Amended Proposal”). The date for the Adjourned Meeting will be determined by the Trustee and a copy of the Amended Proposal and the Trustee’s Report on the Amended Proposal, along with a notice of the time, date and location for the Adjourned Meeting will be mailed to all known creditors when this information becomes available.

Status Update at June 12, 2015

On June 12, 2015, 1153837 Ontario Inc. (“1153837”,  formerly Karrys Bros. Limited) filed a holding proposal dated June 12, 2015 with the Proposal Trustee (the “Proposal”) pursuant to the provisions of the BIA. It is the Trustee’s intention to contact all known creditors of 1153837 in the coming days and to send to each known creditor a copy of the Proposal, a copy of the Trustee’s Report  to Creditors on the Proposal, a proof of claim form, a proxy form, and a voting letter along with information relating to the meeting of creditors to be held on July 3, 2015 at Europa Convention Centre, 7050 Bramalea Road, Mississauga, Ontario at 10:00 a.m. to consider and vote on the Proposal. At that time, a copy of the materials mailed to known creditors will be posted on this website.

Status of File May 25, 2015

On May 22, 2015, the Court issued an order approving the Fourth Report of the Proposal Trustee and the activities of the Proposal Trustee described there in and ordered that the time for the filing of a Proposal by Karrys Bros., be extended in accordance with section 50.4(9) of the BIA until June 12, 2015.

Status of File May 21, 2015

On May 20, 2015, the Proposal Trustee filed its Fourth Report to provide the Court with information in respect of the motion to be heard on May 22, 2015, including:

  1. The bankruptcies of 4028082 Canada Inc. (formerly Karbro Transport Inc.) and 1500140 Ontario Inc. (formerly Karrys Software Ltd.);
  2. The Proposal Trustee’s activities since the date of the Third Report dated April 2, 2015;
  3. The Company’s operations since the date of the Third Report;
  4. Karrys Bros.’ actual cash flow for the period March 22, 2015 to May 9, 2015;
  5. Karrys Bros.’ cash flow forecast for the period May 10, 2015 to July 4, 2015;
  6. Karrys Bros.’ request for the stay extension; and
  7. The Proposal Trustee’s recommendations with respect to Karrys Bros.’ request for the stay extension.

Status of File May 15, 2015

On May 15, 2015, Karrys Bros filed a motion seeking an order extending the time for Karrys Bros to file a proposal pursuant to section 50.4 (9) of the BIA and the stay of proceedings under its NOI, until June 12, 2015 and approving the fourth report of the Proposal Trustee. The motion will be heard on May 22, 2015.

Status of File April 10, 2015

The time period for 4028082 Canada Inc. (“4028082”) and 1500140 Ontario Inc. (“1500140”) to file proposals pursuant to the BIA was not extended, accordingly on April 10, 2015, 4028082 and 1500140 were each deemed to have made an assignment in bankruptcy for the general benefit of its creditors, thereby terminating the proposal proceedings. PwC was appointed as trustee in bankruptcy of the Company (the “Trustee”). Further information regarding the bankruptcy proceedings can be found in the “Bankruptcy” section of this website.

Status of File April 9, 2015

On April 9, 2015, the Court issued an order approving the Third Report of the Proposal Trustee, sealing the Confidential Exhibit to the Affidavit of Steven J. Karrys, and ordered that the time for the filing of a Proposal by Karrys Bros., Limited be extended in accordance with section 50.4(9) of the BIA until May 24, 2015.

Status of File April 2, 2015

On April 9, 2015, the Companies will seek an order extending the time for Karrys Bros to file a proposal pursuant to section 50.4 (9) of  the BIA and the stay of proceedings under its NOI, until May 24, 2015 (the “March Stay Extension”) ,sealing the Confidential Exhibit to the Affidavit of Steven J. Karrys, sworn April 1, 2015, and approving the third report of the Proposal Trustee.  The motion will be heard on April 9, 2015.

On April 2, 2015, the Proposal Trustee filed its Third Report with the Court to provide the Court with information relating to Companies’ motion, including:

  1. An update on the Proposal Trustee’s activities since the Second Report;
  2. An update on the Companies' operations since the filing date;
  3. The Companies actual cash-flow from February 1, 2015 to March 21, 2015;
  4. Karrys Brow’ cash-flow forecast for the period from March 22, 2015 to May 30, 2015
  5. The Companies cash-flow forecast for the period from February 1, 2015 to April 25, 2015;
  6. The Companies’ request for the March Stay Extension; and
  7. The Proposal Trustee’s recommendation with respect to the relief sought by the Companies.

Status of File February 26, 2015

On February 25, 2015, in accordance with the Approval and Vesting Order granted by the Court on December 23, 2014, Karrys filed Articles of Amendment pursuant to the Business Corporations Act changed the corporate names of Karrys Bros., Limited, Karbro Transport Inc., and Karrys Software Ltd. to 1153837 Ontario Inc. 4028082 Canada Inc. and 1500140 Ontario Inc. respectively.

Status of File February 24, 2015

On February 23, 2015, the Sale Transaction approved by the Court on December 23, 2014 between Karrys and Core-Mark International Inc. closed.

Status of File February 19, 2015

On February 19, 2015, the Court issued an order approving that the confidential Exhibits to the Karrys Affidavit and the sublease entered into between the Purchaser, Karrys and the Courtneypark Landlord be sealed and not form part of the public record until further order of the Court; approving the Second Report of the Proposal Trustee and the activities of the Proposal Trustee; and approving the time for filing of a proposal be extended to April 9, 2015.

Status of File February 13, 2015

On February 12, 2015, Karrys filed a motion to seek an order:

  1. Extending the time for Karrys to file a proposal pursuant to section 50.4 (9) of the BIA and the stay of proceedings under the NOIs to  April 9, 2015 (the “Stay Extension”);
  2. Directing that the Purchaser shall be provided access to the Courtneypark facility for a period of up to four months following the Sale Transaction;
  3. Sealing the Confidential Exhibits to the affidavit of Steven J. Karrys sworn February 12, 2015; and
  4. Approving the Second Report of the Proposal Trustee.

A motion will be hear on February 19, 2015.

On February 13, 2015, the Proposal Trustee filed its Second Report with the Court to provide the Court with information relating to Karrys’ motion, including:

  1. An update on the Proposal Trustee’s activities since the First Report;
  2. An update on the Companies' operations since the filing date;
  3. An update on the status of the conditions of the Core-Mark International Inc. APA;
  4. The Companies actual cash-flow from December 15, 2014 to January 31, 2015;
  5. The Companies cash-flow forecast for the period from February 1, 2015 to April 25, 2015;
  6. The Companies’ request for the Stay Extension; and
  7. The Proposal Trustee’s recommendation with respect to the relief sought by the Companies.

Status of File December 23, 2014

On December 23, 2014, the Court issued an order, which amount other things, approved the APA, authorized the Companies to distribute the amount of the secured debt to BMO and sealing the Confidential Appendices of the First Report of the Proposal Trustee.

On the same day, the Court also issued an order extending the stay of proceedings to February 23, 2015, and approving the KERA.

Copies of the orders are posted under the “Court Orders” tab.

Status of File December 17, 2014

On December 16, 2014 the Proposal Trustee filed its First Report to provide the Court with the following:

  1. Background information on the Companies, including their financial position, financial results, causes of financial difficulties, and insolvency;
  2. Information on the sale and marketing process undertaken by the companies with the assistance of PricewaterhouseCoopers Corporate Finance Inc. and Capitalink Advisors Inc.;
  3. Information on the proposed sale of substantially all of the Companies’ assets to Core-Mark International Inc. (the “Sale Transaction”), the APA and the implications of the Sale Transaction on the Companies’ various stakeholders groups;
  4. A summary of the results of the Liquidation Analysis (as defined and described in the First Report) prepared by the Proposal Trustee;
  5. A summary of the cash flow forecast for the Companies for the period from December 15, 2014 to February 28, 2015;
  6. Information on the opinion obtained by the Proposal Trustee from its independent legal counsel, Blake, Cassels & Graydon LLP, in respect of the security held by BMO over the Companies’ assets;
  7. A summary of the Proposal Trustee’s activities since the filing of the NOIs; and
  8. The Proposal Trustee’s recommendations in respect of the Companies’ request for the Approval and Vesting Order and Administrative Order being sought.

A copy of the motion materials and the Proposal Trustee’s First Report are available in the Motion Materials and Trustee’s Reports sections of this website.

Status of File December 16, 2014

On December 23, 2014, Karrys will make a motion for an order:

  1. Approving the Agreement of Purchase and Sale made and entered into as of November 11, 2014 (the “APA”), between Karrys and Core-Mark International, Inc. (the “Purchaser”) for the sale of the Purchased Assets and the transaction contemplated thereby (the “Sale Transaction”);
  2. Vesting all of the Purchased Assets in the Purchaser free and clear of any encumbrances;
  3. Authorizing and directing the Companies to distribute to Karrys’ senior secured lender, Bank of Montreal (“BMO”), from the net proceeds of the Sale Transaction, an amount up to the amount of the secured debt owed to BMO under the Credit Agreement; and
  4. Sealing the Confidential Appendices to the first report of PricewaterhouseCoopers Inc. (“PwC”) in its capacity as proposal trustee of Karrys (the “Proposal Trustee”);and

An order (the “Administration Order”)

  1. Extending the time for filing a proposal pursuant to s. 50.4(9) of the BIA to February 23, 2015;
  2. Approving the administrative consolidation of the Karrys Proposal Proceedings;
  3. Approving the e-service Protocol;
  4. Approving the key employee retention agreement (the “KERA”) and a related charge on the assets, property and undertakings of Karrys securing Karrys’ obligations under the KERA;
  5. Approving the Administration Charge; and
  6. Approving the First Report of the Proposal Trustee and its activities.


This Web site will be updated as information becomes available.

For more information, please contact: Tammy Muradova, Telephone: +1 416 941 8383 ext 14456, or via Email.
 

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Tammy Muradova

Tel: +1 416 941 8383 ext 14456
Email