Distressed Private Equity

In today’s volatile markets, distressed assets present both risk and opportunity. Success depends on speed, insight and the right legal strategy.

Blakes brings together one of Canada’s leading private equity practices with top-tier restructuring expertise to advise on distressed investments, portfolio company workouts and strategic exits. We support private equity firms, investors and sponsors across the full transaction cycle — from distressed M&A and financings to cross-border restructurings and asset dispositions.

Our multidisciplinary approach integrates experience in financial services, M&A, capital markets, competition and foreign investment review to deliver creative, practical solutions in complex environments. We regularly advise on Canadian and international matters, working seamlessly with global counsel to manage multi-jurisdictional risks and maximize value.

Recent engagements in which a private equity fund has played a material role as either a lender, owner or purchaser demonstrate how we help clients capitalize on distressed opportunities and navigate uncertainty with confidence.

Recent Experience

Xplore Inc. – Counsel to Stonepeak Partners LP in the CBCA proceedings of the C$1.6-billion recapitalization for Xplore Inc., a leading provider of broadband services to rural communities in Canada. These proceedings broke new ground and provided unprecedented relief, including the incorporation of a reverse vesting order into CBCA proceedings, as a tool to facilitate the company’s divestment from its uneconomic satellite business. This matter involved a private equity portfolio company and a private equity plan sponsor. (Ontario Court)
David’s Bridal LLC* – Canadian counsel to the purchaser in the CCAA recognition proceedings of David’s Bridal’s U.S. Chapter 11 proceedings. David’s Bridal is the largest bridal and special occasion retailer in North America, with 294 retail stores in the U.S., Canada and the U.K. at the time of filing. The transaction involved a unique no-cash deal, including a credit bid and assumption of liabilities, that kept 195 North American stores open and avoided a total shutdown of the business. This matter involved a private equity purchaser. (Ontario Court)
Instant Brands Inc.* – Canadian counsel to the purchaser of the Appliance Division in the CCAA recognition proceedings of Instant Brands’ U.S. Chapter 11 proceedings. The transaction involved the multi-jurisdictional acquisition of the Appliance Division of the Instant Brands group, maker of iconic consumer lifestyle brands such as Instant Pot, Correlle, Pyrex, CorningWare, Visions and Chicago Cutlery, at a purchase price of more than US$122-million. This matter involved a private equity purchaser. (Ontario Court)
Vari-Form Manufacturing Inc. – Counsel to the senior lenders in the CCAA proceedings of Vari-Form, a manufacturer and supplier of hydroformed components to original equipment manufacturers, including Fiat Chrysler Automotive NV (FCA), and other customers in the automotive light vehicle, commercial vehicle, industrial, marine and agricultural markets. Through related entities, FCA submitted a successful stalking horse bid as part of the sale process and provided the DIP financing. This matter involved private equity lenders. (Ontario Court)
Red Lobster* – Canadian counsel to Red Lobster in its CCAA recognition proceedings of its U.S. Chapter 11 proceedings. Red Lobster successfully sold its cross-border business to its senior secured lender for more than US$275-million through a plan of reorganization. The U.S. confirmation order was recognized in Canada, and all Canadian restaurants remained open following the successful restructuring. This matter involved a private equity lender and a private equity purchaser. (Ontario Court)
DCL Corporation* – Canadian counsel to DCL in its restructuring under the CCAA, completed in coordination with Chapter 11 proceedings of U.S.-based affiliates. The restructuring proceedings resulted in the going-concern sale of the DCL Group’s multi-jurisdictional business to its secured term lender for an aggregate purchase price estimated to be more than US$162-million. This matter involved a private equity portfolio company, a private equity lender and a private equity purchaser. (Ontario Court)
Dominion Diamond Mines ULC and certain affiliates – Counsel to Dominion Diamonds in its restructuring under the CCAA. Dominion Diamonds was one of the most complicated mining assets in North America and the second-largest employer in the Northwest Territories. The CCAA proceedings involved multiple contested hearings and claims of more than US$1-billion. It concluded in a going-concern sale of the business, including the sale of a key mining venture pursuant to a reverse vesting order. This matter involved a private equity portfolio company. (Alberta Court)
Coalspur Mines Operations Ltd. – Counsel to the court-appointed monitor in the CCAA proceedings of Coalspur, a coal development company with a large operating mine in Alberta, with liabilities in excess of C$550-million. The CCAA plan resulted in payment of secured creditors and significant recoveries to unsecured creditors. This matter involved a private equity lender. (Alberta Court)
Toys “R” Us Canada Ltd.* – Counsel to the DIP agent in the CCAA and U.S. Chapter 11 proceedings of Toys “R” Us Canada and its larger corporate family. The DIP lenders provided a US$2.3-billion DIP facility to Toys “R” Us Canada and its U.S. parent. Toys “R” Us Canada, the largest dedicated toy and baby products retailer in Canada, successfully sold its business as a going concern. This matter involved a private equity purchaser. (Ontario Court)
Jupiter Resources Inc. and certain affiliates – Counsel to Jupiter in its restructuring under the CBCA. Jupiter was an independent exploration and production company focused on natural gas properties. The effect of the arrangement was the elimination of the principal amount of US$1.1-billion of Jupiter’s notes and the associated annual cash interest payments of US$93.5-million. This matter involved a private equity portfolio company and a private equity lender. (Alberta Court)
Lightstream Resources Ltd. – Counsel to Lightstream in its restructuring under the CCAA and its successful defence of certain unsecured bondholders’ attempts to have their unsecured claims recognized as secured claims based on unproven allegations of oppression, breach of contract and misrepresentation. Lightstream was a public company with over C$1.2-billion in debt. After a discontinued attempt to complete a CBCA restructuring, Lightstream completed a going-concern credit bid sale in the CCAA proceedings. The transaction was recognized by the Turnaround Management Association as the 2017 M&A Deal of the Year (Over C$1-billion). This matter involved a private equity portfolio company and a private equity lender. (Alberta Court)
Laricina Energy Ltd. – Counsel to the senior secured lender in the CCAA proceedings of Laricina, a junior oilsands exploration and production company. Blakes assisted the secured lender with securing a payout of Laricina’s cash on hand in partial satisfaction of its outstanding debt, and approval and implementation of a settlement agreement negotiated with Laricina to resolve its near-term financial distress. This matter involved a private equity portfolio company and a private equity lender. (Alberta Court)

*Cross-border mandates

Awards & Recognition

Members of our group are consistently recognized by clients and peers as leaders in restructuring and insolvency law in the most recent editions of the following leading publications:

Chambers Global Legal Guide
Chambers Canada Legal Guide
The Canadian Legal Lexpert Directory
Lexpert’s Leading 500 Cross-Border Lawyers: A Guide to Doing Business in Canada
The Legal 500 Canada
Global Restructuring Review’s GRR 100
Benchmark Canada: The Definitive Guide to Canada’s Leading Litigation Firms and Attorneys
IFLR1000: The Guide to the World’s Leading Financial and Corporate Law Firms
Lexology Index: Restructuring & Insolvency
Lexology Index: Canada
The Best Lawyers in Canada