N.l.-based Big Eric's finds buyer
Company had been going through creditor-protection process
Big Eric’s has come out the other side of its potential bankruptcy proceedings with new owners.
According to court documents filed in April, the company has entered into an asset purchase agreement, which had a closing date of May 3, that will see the company continue its operations.
Big Eric’s, which does hospitality, sanitation and janitorial commercial distribution and sales, successfully applied for the Companies’ Creditors Arrangement Act (CCAA) process in 2023, which is intended to help insolvent companies avoid bankruptcy through restructuring their business and financial affairs.
The company is based in Newfoundland and Labrador and has operated in the province for close to 80 years.
Another company which had the same owners, Terra Nova Old Port Foods Inc., was also part of the CCAA process, but it wound down operations in the summer of 2023.
In 2023, Big Eric’s was granted an order through the CCAA allowing it to seek potential investors or buyers through an adviser, accounting firm Noseworthy Chapman.
PURCHASE AGREEMENT
The documents, filed as part of the CCAA process in April, say that the purchaser, who is not named, assumes all the assets and contracts of Big Eric’s Inc. (BEI), with some exceptions.
Those exceptions include a single customer contract, the lease of property at 99 Blackmarsh Rd., and employee plans such as health or other medical benefits, life or other insurance, vacation, disability, retirement or supplemental retirement benefit plans.
The buyer also does not assume any of the liabilities of BEI, except for liabilities of associated contracts they took over.
It’s also noted in the CCAA documents that while the sale will be sufficient to pay the claims ranking in priority to BMO, which is owed $10 million, it does not fully cover that debt and it’s not expected any money will be left to pay any other secured creditors, or the unsecured creditors of BEI.
The most recent stay of proceedings granted by the courts expires on May 15, which should be long enough to allow for the closing of the sale, but it's expected it will need to be extended to accommodate a distribution and discharge application by the court-appointed monitor.