On September 15, 2009, Barzel Industries Canada Inc. (“Barzel Canada”) filed for and obtained protection under the Companies’ Creditors Arrangement Act, R.S.C. 1985, c. C-36 (as amended, the “CCAA”) pursuant to an order of the Ontario Superior Court of Justice (Commercial List) (the “Court”). Deloitte & Touche Inc. (“Deloitte”) was the Court-appointed monitor (the “Monitor”) of Barzel Canada in connection with the application.
On the same day, Barzel Canada’s parent, Barzel Industries Inc. and certain affiliated U.S. entities including Barzel Holdings Inc., Barzel Finco Inc., Barzel Industries U.S. Inc., American Steel and Aluminum Corporation, Nova Tube and Steel Inc., Novamerican Tube Holdings, Inc. and Nova Tube Indiana, LLC (collectively, the “U.S. Debtors”) filed voluntary petitions under chapter 11 of title 11 of the United States Code, 11 U.S.C. §101-1532 in the United States Bankruptcy Court for the District of Delaware (the “U.S. Court”). Collectively, Barzel Canada and the U.S. Debtors are known as the “Barzel Group”.
The Applicant is indebted to its U.S. parent Barzel Finco, Inc. (“Barzel Finco”) as evidenced by two intercompany demand promissory notes (the “Intercompany Notes”) totalling $125 million. The obligations of the Applicant under the Intercompany Notes are secured by all present and after-acquired property of the Applicant pursuant to a Canadian collateral agreement, dated November 15, 2007, and a charge/mortgage of land dated November 16, 2007 (collectively the “Inter-company Notes Collateral Documents”). The Intercompany Notes and the Intercompany Notes Collateral Documents were in turn pledged (and a valid and perfected security interest granted therein) by Barzel Finco to the Secured Lenders to secure obligations owed to the Secured Lenders. The Monitor received an independent legal opinion from its legal counsel, Osler, Hoskin & Harcourt LLP, that the security granted by the Applicant in connection with its obligations pursuant to the Intercompany Notes is validly perfected and registered.
On October 28, 2009, pursuant to sale procedures approved by the Court and the U.S. Court, the Barzel Group conducted an auction for the sale of substantially all of its assets, property and undertaking. The Barzel Group, in consultation with J.P. Morgan Securities LLC and CIBC World Markets Corp. (collectively, the “Secured Lenders”), the unsecured creditors’ committee in the United States proceedings and the Monitor and their respective counsel, determined that a bid from Chriscott USA Inc. and 4513614 Canada Inc. (collectively, “Metco”) was the highest and best bid and therefore the successful bid at the auction.
By Order dated October 30, 2009, the Court approved the sale to and vesting of substantially all of the assets of the Barzel Group, including the assets of Barzel Canada, in Metco (the “Sale and Vesting Order”). Of the proceeds from the sale to Metco, approximately USD $12.45 million was transferred to the Secured Lenders on November 18, 2009 for payout of all amounts borrowed directly by Barzel Canada under the DIP Facility.
Pursuant to an Order dated January 14, 2010, a further USD $4.0 million was distributed to the Secured Lenders as a further repayment of their secured indebtedness. Further, pursuant to an order dated August 31, 2011 a distribution of $300,000 was transferred to the Secured Lenders as partial repayment of their secured indebtedness. Notwithstanding a post-closing distribution to the Secured Lenders, Barzel Canada remained indebted to the Secured Lenders (through its obligations to Barzel Finco under the Inter-company Notes) for more than USD $100 million.
On December 19, 2011, the Monitor brought a motion before the Court requesting authorization to make a disbursement to the Secured Lenders all amounts held by the Monitor in excess of amounts required to satisfy remaining professional fees plus $35,000 to be transferred to the proposed trustee in bankruptcy for the costs of administration of the bankruptcy of Barzel Canada. The amount transferred to the trustee was ordered to be expressly free of any security interest in favour of the Secured Lenders.
The Monitor’s Motion dated December 19, 2011 also requested authorization for the Monitor to make an assignment in bankruptcy on behalf of Barzel Canada, to discharge Deloitte as Monitor in this CCAA proceeding upon the filing of the Monitor’s Certificate (as defined below), and to terminate this CCAA proceeding effective as of the date of the filing of the Monitor’s Certificate. An Order was passed by the Court on December 19, 2011 granting the relief sought by the Monitor.
On December 22, 2011, after transferring such funds and performing all final matters incidental to the termination of the CCAA proceeding, the Monitor filed the Monitor’s Certificate (the “Monitor’s Certificate”) with the Court certifying the completion of such final matters.
On December 22, 2011, the Monitor filed an assignment in bankruptcy for Barzel Canada on December 22, 2011. Information pertaining to the bankrupt estate of Barzel Industries Canada Inc. can be located at the Trustee’s website: www.deloitte.com/ca/barzel-bankruptcy.
[+] Court Orders - September 15, 2009
[+] Court Orders - September 18, 2009
[+] Court Order - October 6, 2009
[+] Court Orders - October 15, 2009
[+] Court Orders - October 26, 2009
[+] Court Orders - October 30, 2009
[+] Court Orders - November 12, 2009
[+] Monitor's Certificate - November 19, 2009
[+] Court Orders - December 14, 2009
[+] Court Order - January 14, 2010
[+] Court Order - March 30, 2010
[+] Court Orders - June 28, 2010
[+] Court Orders - August 27, 2010
[+] Extension Order - November 23, 2010
[+] Court Order - February 28, 2011
[+] Motion Record of the Applicant - September 15, 2009
[+] Motion Record of the Applicant - September 17, 2009
[+] Motion Record of the Applicant - September 18, 2009
[+] Motion Record of the Applicant - October 15, 2009
[+] Motion Record of the Applicant - October 30, 2009
[+] Motion Record of the Applicant - November 12, 2009
[+] Motion Record of the Applicant - December 14, 2009
[+] Motion Records of the Applicant – Returnable June 28, 2010
[+] Motion Record of the Applicant - Returnable August 27, 2010
[+] Motion Record of the Applicant - Returnable November 23, 2010
[+] Motion Record of the Applicant - Returnable February 28, 2011
Motion Record of the Applicant - Returnable August 31, 2011
Motion Record of the Monitor - Returnable December 19, 2011
Supplementary Motion Record of the Monitor - Returnable December 19, 2011
Second Supplementary Motion Record of the Monitor - Returnable December 19, 2011
[+] Fourth Report of the Monitor - October 30, 2009
[+] Sixth Report of the Monitor - December 8, 2009
[+] Eighth Report of the Monitor - June 22, 2010
Ninth Report of the Monitor - August 24, 2010
Tenth Report of the Monitor - November 17, 2010
Eleventh Report of the Monitor - February 23, 2011
Twelfth Report of the Monitor - August 26, 2011
Thirteenth Report of the Monitor - December 12, 2011
For more information on the bankruptcy filing of Barzel Industries Canada Inc., please visit the Trustee’s website at www.deloitte.com/ca/barzel-bankruptcy
Creditors can direct any questions by email to firstname.lastname@example.org or contact Mr.Neil Jones at (416) 874-3142.
Written correspondence can be sent to:
Deloitte & Touche Inc.
CCAA Monitor of Barzel Industries Canada Inc.
181 Bay Street, Suite 1400
Attention: Mr. Neil Jones