Contac Services Inc. Bankrupt

Contac Services Inc. declared bankrupt

TORONTO — In a legal notice appearing in the Friday Feb. 13, 2015 issue of The Globe and Mail, A. Farber & Partners Inc. announced that the bankruptcy of Contac Services Inc. occurred on Feb. 2.

The notice further stated that the first meeting of creditors of Contac Services Inc. will be held at the offices of the Trustee (A. Farber & Partners inc.) on Feb. 23 at 2 p.m. The offices of A. Farber & Partners Inc. are located at 150 York St., Suite 1800, Toronto, ON, M3H 3S5. The telephone number is 416-497-0150.

A. Farber & Partners Inc., the court appointed receiver for Contac Services Inc. recently filed its third report dated Jan. 27 with the Ontario Supreme Court of Justice.

The receiver reported that notwithstanding its efforts to sell the businesses of Contac, it received only one qualified bid from 9148256 Canada Inc., a newly incorporated company that was related to Norep Credit Opportunities Fund (‘NCOF’).

NCOF was Contac’s largest secured creditor, being owed in excess of $32 million at the time of the receivership.

NCOF’s offer to purchase the bulk of the assets of Contac was for a purchase price of $34.28 million plus the value of other indebtedness and prior ranking claims, plus the assumption of $2.28 million owed to Amin Holdings Inc., which was also a shareholder of Contac Services Inc., plus the assumption of debt totaling $1.2 million which the receiver refers to as SBIF indebtedness. The purchaser also agrees to assume the outstanding indebtedness owed to NCOF which represents the balance of the purchase price.

The excluded assets included Scientific Research Tax Credits which are payable to another secured creditor, 8095876 Canada Inc., referred to by the receiver as One Key, based on an agreement on the allocation of SHRED funds between NCOF and One Key.

The accepted bid was conditional upon the granting of a Bankruptcy Order.

The net result of this transaction appears to be that the purchaser which is related to Contac’s largest secured creditor will get the bulk of the assets of Contac free and clear of any and all claims by other creditors. It appears that the unsecured creditors which are owed approximately $25.5 million will get nothing.

The purchaser is to provide the receiver with a list of employees that it will not be offering employment and the receiver will terminate those employees.

The receiver estimated its fees and disbursements, excluding taxes, to be $132,315.42. The fess and disbursements of its lawyers, including taxes, were estimated at $42,464.99.

Copies of this report and other details are reproduced at the receiver’s website afarber.com.