Contac placed in receivership, creditor claims it is owed $32m

Contac placed in receivership, creditor claims it is owed $32m

MISSISSAUGA, ON — A secured creditor of Contac Services Inc. has obtained a court order appointing A. Farber & Associates Inc. receiver on the grounds that Contac is insolvent.

The secured creditor, NORREP Credit Opportunities Fund, LLP, claims that it is owed more than $32 million and alleges that Contac, an integrated marketing, communications and logistics services provider specializing in third party distribution management and web-based marketing services, is not paying its liabilities as they come due and that Contac: is in arrears of rent in both its locations; is in arrears for source deductions for three payroll runs in October and November totaling approximately $230,000; it does not have sufficient funds to pay anticipated expenses; it is in arrears re HST in the amount of approximately $30,000; it owes $2,867,000 to another secured creditor, Amin Holdings Inc. which is also a shareholder of Contac Services Inc.; it owes $1.75 million to another secured creditor (Bridging Credit Fund LP).

The Secured Creditor also alleges that CEO Riaz Pisani incorporated two new companies in June and July 2013 which were to be wholly owned subsidiaries of Contac and that it is unclear to what extent assets of Contac Services Inc. have been transferred to these companies.

For more information, visit farberfinancial.com/insolvency-engagements/.