RBC Secures Receiver Appointment Amid Debtor’s Delays, Failure to Co-operate

On February 29, 2024, the Ontario Superior Court of Justice (Commercial List) (the “Court”) appointed The Fuller Landau Group Inc. as receiver over the assets, undertakings and properties of TNT International Leasing Inc., 24Hr. Kitchens Inc. and 2531961 Ontario Inc. (the “Respondents”). The endorsement of The Honourable Justice Peter J. Osborne can be accessed at Royal Bank of Canada v. 2531961 Ontario Inc. et al.

In this case, Royal Bank of Canada (“RBC”), a secured creditor, sought the appointment of a receiver due to the Respondents’ failure to make payments since August 2023, despite multiple extensions to allow the Respondents to secure refinancing. The Respondents opposed the receivership, arguing that they needed additional time to finalize a financing transaction that they claimed would pay out RBC by March 29, 2024. However, the Court found that the Respondents failed to provide sufficient evidence of this transaction, lacked transparency and did not co-operate with the appointed monitor. Given these circumstances, and considering RBC’s rights under its security agreements, the Court held that it was “just and convenient” to appoint a receiver.

This case is significant as it demonstrates the Court’s willingness to appoint a receiver despite a debtor’s repeated requests for extensions and assurances of refinancing. A summary of the case is included in Watson & McGowan’s Ontario Civil Practice 2025.

Aird & Berlis successfully represented RBC with a team consisting of Sanjeev Mitra, Jeremy Nemers and Samantha Hans (Financial Services).