Documents detail why northern Ont. aerospace firm filed for CCAA protection
Court documents have detailed the dire financial position that led Springer Aerospace to begin the restructuring process under the Companies’ Creditors Arrangement Act.
Springer, an aircraft maintenance company in Echo Bay near the Sault, has been open since 1972 and employs 100 people.
Like a lot of businesses, it was hard hit by the COVID-19 pandemic. In particular, the company had gone through a major expansion just before the pandemic hit.
“Springer experienced major disruptions to its business as a result of the COVID-19 shutdown and resulting impact on the travel and aviation industry,” the company said in its court filing.
“The pandemic exacerbated existing operational inefficiencies following a rapid expansion by the company and growth initiatives designed to increase top-line revenue.”
With the aviation industry shut down, revenues tanked and the company’s inability to make their debt payments alarmed Caisse Desjardins Ontario Credit Union Inc., the company’s primary lender.
“In total, $5,747,228.31 was outstanding to Desjardins as of July 2022,” the court document said.
“Springer is unable to pay the amounts outstanding to Desjardins. In addition, Springer has accrued payables in the ordinary course of its business, including unsecured trade payables in excess of $1.6 million and property taxes of $186,000.”
With Desjardins demanding payment, Springer was in a tough spot by November of this year, when its bank account held just $1,400.
“Absent an immediate cash infusion, Springer will not be able to make payroll this week,” the filing said.
“Desjardins declined the opportunity to be the provider of the needed interim financing.”
The court ruled that the company was a strong candidate to successfully restructure, in part because of its track record and the fact it’s having difficulties primarily because of the pandemic.
“It has trained and retained a skilled workforce through the COVID-19 pandemic,” the court said.
“It has developed a reputation and expertise in a specialized industry and its customers are large corporations and governments who rely on Springer’s services. The monitor concurs that the applicants represent a viable business. While the CCAA filing may cause some disruption to the business, a shutdown or liquidation would likely effectively terminate operations with little or no chance of recovery.”
The ruling allowed Springer to access a $600,000 DIP loan – emergency financing to keep the company operating during the restructuring process.
See the full court filing here.
CTVNews.ca Top Stories
Police arrest 3 Indian nationals in killing of B.C. Sikh activist Hardeep Singh Nijjar
Three people have been arrested and charged in the killing of B.C. Sikh activist Hardeep Singh Nijjar – as authorities continue investigating potential connections to the Indian government.
Five areas Canada's foreign interference commissioner says needs more investigation
Commissioner Marie-Josee Hogue released her interim report examining foreign election interference on Friday. Here are five elements of the issue that Hogue says she needs to further probe before she can make conclusions or recommendations.
Police officer hit by driver of fleeing vehicle in Toronto
York Regional Police say they are continuing to search for a suspect in an auto theft investigation who was captured on video running over a police officer in Toronto last month.
Why your airfare may be getting more expensive
Skyrocketing airfare prices are linked to heightened competition and rising food and fuel, according to the CAA.
TD worst-case scenario more likely after drug money laundering allegations: analyst
TD Bank Group could be hit with more severe penalties than previously expected, says a banking analyst after a report that the investigation it faces in the U.S. is tied to laundering illicit fentanyl profits.
New weight-loss drug Wegovy not a 'magic bullet,' doctor warns
As Wegovy becomes available to Canadians starting Monday, a medical expert is cautioning patients wanting to use the drug to lose weight that no medication is a ''magic bullet,' and the new medication is meant particularly for people who meet certain criteria related to obesity and weight.
Drew Carey is never quitting 'The Price Is Right'
Drew Carey took over as host of 'The Price Is Right' and hopes he’s there for life. 'I'm not going anywhere,' he told 'Entertainment Tonight' of the job he took over from longtime host Bob Barker in 2007.
Funeral today for broadcasting legend and voice of 'Hockey Night in Canada' Bob Cole
A funeral is being held today for hockey broadcasting legend Bob Cole in his hometown of St. John's, N.L.
Foreign meddling 'did not affect' overall federal election results: inquiry report
Foreign interference by China did not affect the overall results of the 2019 and 2021 general elections won by Justin Trudeau's Liberals, a federal commission of inquiry has found.