Metro Snow Clearing (Barrhaven) or
Metro Snow Clearing (Merivale) clients.

We act as Trustee in re: Proposal in the above-noted matters. A Proposal is a debt remedy pursuant to the Bankruptcy & Insolvency Act (the “Act”) which provides for a plan of arrangement or compromise against a debtors’ liabilities. The date of Proposal for both companies is July 18, 2019.The intent of this remedy is to rejuvenate an individual or corporations’ financial position to enable a fresh start from  debt and not interfere or infringe on ongoing operations. Snow clearing clients were not to be affected by these Proposals. Ongoing operations were required to service existing and future clients as well as to satisfy the financial terms of the Proposals addressing “old” debt.

It is our understanding that the debtor companies have ceased operations. It is not my intention, at this time, to request the Court place the companies into bankruptcy for reasons outlined below. We take this opportunity to inform the clients as to their status or position regarding the Proposals and to assist the clients in considering whether to file claims with our office and the procedure to follow in the event you choose to do so.

Clients who signed contracts after July 18, 2019

The date of Proposal acts as a turning point for determining claims. Claimants subsequent to the date of Proposal – clients who signed their contracts after the date of Proposal – do not have status in the Proposal. These clients are not affected by the Stay of Proceedings as provided for in the Act. We do not intend to seek a bankruptcy order from the Court so as to preserve your legal rights and remedies as against the Companies. All legal remedies are available to you to attempt to recover your debt. Certain remedies include commencing legal action, enforcing any judgements obtained and/or funding a bankruptcy administration. We urge you to seek legal counsel in this regard.

Despite the foregoing, please do not hesitate to file a claim with our office. We will keep your claim on file in the event the company closures result in a bankruptcy  administration. You will then have participatory rights in the bankruptcy administration.

While forcing a bankruptcy may seem like a viable alternative, the officer of the debtor companies has advised that all funds received subsequent to the date of the Proposal have been used to satisfy costs of operations. As a result, it would fall on the creditor/client or group of creditors/clients to fund these administrations. A bankruptcy would enable the Trustee to trace post-proposal funds and to verify certain undertakings made on behalf of the companies. As a result of secured creditor interests It does not appear as though any assets are available to satisfy the significant costs of a bankruptcy administration. It is anticipated that a number of Court actions would be required to be pursued by the Trustee in order to perfect a claim to any available assets over and above the secured lenders interests, should they exist.  Costs to bankrupt the companies are anticipated to approximate $25,000.00 to $35,000.00 per administration. Legal fees and costs would be in addition to these amounts. Creditors should further note that on bankruptcy all claims are subject to the proceeding. As a result, any recoveries over and above the fees and costs would be shared on a pro-rata basis with the creditors that were part of the Proposal thereby further depleting individual client recoveries. Please continue reading to see the  impact this scenario has on contracts signed prior to the date of Proposal.

Clients with contracts signed before July 18, 2019

Clients who signed their contracts before the date of Proposal have status in the Proposals and can lodge a claim with our office. Recoveries are nominal and certain procedures must be followed in order for your claim to participate.

A claim form must be sent to our office. The Proof of Claim form (the “Claim”) must be completed properly – instructions are on the form itself. You must indicate on the Claim that you are “Unsecured” and the Claim must be witnessed. A signed copy of your contract must be included with your completed Claim. Proof of payment, or a Schedule “A”, must be included with your Claim. As services were provided for a majority of the contract term, your claim will be pro-rated for participation purposes. Please further note that as the company debt increases as a result of additional claims being filed, net recoveries to individual creditors decreases. An approximation of recovery for Barrhaven clients, assuming only one (1) additional claim is received by our office at an average contract price of $350.00, appears to be as follows:

• Pro-rated – 69 days of service out of 137 total days – 69/137 = 50.36 %
• Contract Price – $350.00
• Pro-rated – $175.00
• Recovery factor – 2.5%
• Dividend – $4.38
• Less Levy – $0.22
• Net Dividend – $4.16

Summary

As noted above, approximate available dividends in these administrations are nominal. Available recoveries for Merivale clients are less than those available for Barrhaven clients. A clear path exists to force the companies into bankruptcy as a result of the discontinuation of the Proposals. However, recoveries to creditors are difficult to determine due to the significant costs associated with this pursuit as they relate to recoverable assets in a bankruptcy context after consideration of the claims of secured creditors.

Please do not hesitate to contact our office should you have any questions or require a Proof of Claim form.