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
Doctors ask Liberal government to reconsider capital gains tax change
The Canadian Medical Association is asking the federal government to reconsider its proposed changes to capital gains taxation, arguing it will affect doctors' retirement savings.
Keeping these exotic pets is 'cruel' and 'dangerous,' Canadian animal advocates say
Canadian pet owners are finding companionship beyond dogs and cats. Tigers, alligators, scorpions and tarantulas are among some of the exotic pets they are keeping in private homes, which pose risks to public safety and animal welfare, advocates say.
BREAKING Man wanted in connection with deadly shooting in Toronto tops list of most wanted fugitives in Canada
A 35-year-old man wanted in connection with the murder of Toronto resident 29-year-old Sharmar Powell-Flowers nine months ago has topped the list of the BOLO program’s 25 most wanted fugitives across Canada, police announced Tuesday.
Prince William and wife Kate thank public for birthday messages for son Louis
Prince William and his wife Kate thanked the public for their messages which had been sent to mark the sixth birthday of their youngest son Louis on Tuesday.
She was the closest she'd ever been to meeting her biological father. Then life dealt her a blow
Anne Marie Cavner was the closest she'd ever been to meeting her biological father, but then life dealt her a blow. From an unexpected loss to a host of new relationships, a DNA test changed her life, and she doesn't regret a thing.
How quietly promised law changes in the 2024 federal budget could impact your day-to-day life
The 2024 federal budget released last week includes numerous big spending promises that have garnered headlines. But, tucked into the 416-page document are also series of smaller items, such as promising to amend the law regarding infant formula and to force banks to label government rebates, that you may have missed.
Fire engulfs old Edmonton municipal airport hangar
A historical hangar at the former Edmonton municipal airport beside the NAIT main campus was on fire Monday night.
Soft skills, preparation can help new graduates land jobs, experts say
As new graduates enter the workforce over the next few weeks, they are likely to face challenges getting their foot in the door and must be prepared to effectively communicate what they bring to the company.
RCMP uncovers plot to sell drones and equipment to Libya
The RCMP says it has uncovered a ploy to sell Chinese drones and military equipment to Libya illegally.