Datec Coating Corporation (“DCC”) is in the business of developing and manufacturing custom heating, coating and thermal solutions for customers across Canada and the United States.
On October 4, 2024, DCC filed a Notice of Intention to Make a Proposal to its creditors pursuant to subsection 50.4 (1) of the Bankruptcy and Insolvency Act, R.S.C. 1985, c. B-3, as amended (the “BIA”) and Dodick Landau Inc. was named Proposal Trustee. Pursuant to the provisions of subsection 69 (1) of the BIA a stay of proceedings has been initiated and all proceedings against DCC are stayed as of the date of filing of the NOI.
A motion brought by DCC was heard on October 23, 2024 at which the Court approved a stay extension, approval of a DIP Term Sheet, DIP Lender’s Charge and approval of a stalking horse sales process. Following completion of the sales process by the Proposal Trustee, the Company completed a sale of its assets to a third-party purchaser, Urecka Canada Corporation (the “Purchaser”).
As there were insufficient proceeds from the sale of its assets to the Purchaser to make a Proposal to its creditors, on December 28, 2024 (“Date of Bankruptcy”) Datec was deemed bankrupt on account of its non filing of a Proposal within the Court-granted extension period and DLI became Trustee in Bankruptcy (the “Trustee”) of the estate of Datec.
Excluded from the asset sale is a SR&ED credit claim for fiscal 2024 which the Trustee will file with CRA by March 2025. A SR&ED refund, if any, will be available to the creditors of Datec. At this time, it is anticipated that the total net realizations in the bankruptcy will be insufficient to repay Western Ontario Community Futures Development Corporation Association’s (“WOCFDCA”) secured claim in full and WOCFDC will experience a shortfall.
Documents
Certificate for the Notice of Intention – October 4, 2024
Applicant Motion Record – October 21, 2024
Factum of the Applicant – October 21, 2024
First Report to Court of the Proposal Trustee – October 22, 2024
Court Order – October 23, 2024
Court Endorsement – October 23, 2024
Applicant Motion Record – December 5, 2024
Assignment, Approval and Vesting Order – December 11, 2024
Report on Non filing of Proposal – December 28, 2024
Certificate of Assignment – December 28, 2024
Creditor Package – January 8, 2025
Preliminary Report – January 24, 2025