Did You Know?

  • Most commercial operations have been closed for 3 months or more
  • This financial inactivity is unsustainable and financially crippling – it has created a mountain of debt, uncertainty, and spiking insolvency rates
  • Climbing out of this chasm of inactivity will require not only solutions for the short term but will require arrangements for an estimated 16 to 20 months.
  • The target benefactors for our solutions: commercial tenants/landlords, suppliers, mortgage/financing operations and real estate consultants and other commercial needs
  • ​Many of these issues are new to legislation and litigation parameters. The time and resources to litigate are highly unknown, eg. Force Majeure or Frustrated Contract?


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Recent Examples of Issues

  • 2 boutiques in B.C. were told to pay rent by April 15 or face eviction
  • 4 or more store mall tenants north of Montreal were told to pay rent by May 15 or face eviction
  • A supplier to clothing store chain told them to pay for goods by June 1 or face inventory seizure
  • ​Cirque du Soleil swamped with debt – major creditor offered debt/equity swap
The Results
  • Stores not releasable for a long period of time
  • Repossessed inventory sold at fire sale prices 
  • Contributes to insolvency line-ups
  • Recovery via Personal Guarantees somewhat doubtful
  • Many real estate managers come from residential operations  ​
What are the Current Lifelines?
  • Canadian Government grants/loans, etc.
  • Many landlords reportedly reluctant to apply (recent Ontario legislation uncertain)
  • Extending further debt: difficult and very uncertain 
  • Deterioration of personal wealth accumulated over the years, and putting Personal Guarantees at risk 
Unknown Obstacles
Do these scenarios make financial business sense?
  • Almost all of the above are insufficient or don’t respond to current needs, and uncertaintyof future viability of businesses
  • Some have to be repaid - therefore further debt accumulation 
  • Not sure CRA will allow almost endless tax losses carried forward
  • ​Debt recovery action to be very lengthy and without any certainty of reasonable recovery
  • The answer is NO!
    • Since none of these make sense, financially or otherwise, why not find mutually viable solutions?
      • ​Failure to embark on reasoned and well-planned financial discussions for viable creditor solutions is tantamount to financial suicide
      • ​Sadly, many businesses that fail to negotiate mutually viable financial solutions will no doubt later be involved with debt recovery actions or insolvency proceedings, and possible liquidation of personal guarantees – this is definitely not a time for complacency