The Ontario Superior Court of Justice has granted Carillion Canada creditor protection under the Companies’ Creditors Arrangement Act (CCAA).
According to a statement from the company on Jan. 25, the court order provides a stay of proceedings in favour of Carillion Canada and some of its domestic subsidiaries for an period of one month. The order is subject to an extension, if the court deems it appropriate.
RELATED: Carillion Canada addresses parent company’s liquidation
On Monday, Jan. 15, Carillion Plc — Carillion Canada’s UK-based parent company — and several of its subsidiaries, entered into an insolvency process known as compulsory liquidation.
“The Canadian Carillion Applicants’ decision to obtain creditor protection under the CCAA was precipitated by the liquidation commenced in the United Kingdom,” a statement from the Canadian arm of the company explained. “Which gave rise to unexpected liquidity challenges for the Canadian operations. The CCAA filing is not a bankruptcy or liquidation filing.”
Carillion Canada reaffirmed its operations will continue to operate as “business-as-usual,” as they continue to operate under the protection of the court order.
“The Canadian Carillion Applicants do not anticipate any disruption to the various services they provide and do not expect that this protective filing will impact the public in any way,” the statement explained. “Public safety remains our top priority, be it in the maintenance and cleaning of hospitals, the clearing of roads or any of our other activities.”
Carillion Canada intends to use the protection afforded to them by the court to stabilize their operations and address their short and long-term liquidity challenges while they explore the available options.
Some of Carillion’s Canadian business units, including Outland, Rokstad, the Carillion Services entities, and Carillion’s Public Private Partnerships, are not parties to the CCAA proceedings, but a “limited stay of proceedings has been extended for their benefit” to ensure the continuation of their day-to-day operation.
Ernst & Young Inc. has been appointed as Monitor in the CCAA proceedings. The Canadian Carillion Applicants have retained Blake, Cassels & Graydon LLP as their legal advisor to assist them with this restructuring process. The Board of Directors has retained Chaitons LLP, as its independent legal advisor.