Carillion's Canadian businesses under the CCAA

analysisOn 25 January 2018 Carillion Canada Holdings Inc., Carillion Canada Inc., Carillion Canada Finance Corp. and Carillion Construction Inc. obtained an Initial Order from the Ontario Superior Court of Justice (Commercial List) under the Companies' Creditors Arrangement Act (CCAA), the Canadian statute under which an insolvent company can restructure or sell its business while the court stays creditors' proceedings against it. The order stayed proceedings until 23 February 2018 and appointed Ernst & Young Inc. as Monitor, the court-appointed officer who oversees the companies during the proceedings; the stay was later extended, most recently to 30 April 2021. Further applicants, including Carillion Services Inc., were added on 1 March 2018. The Monitor's report describes Carillion plc, acting by its special managers, as the ultimate parent of the Canadian applicants, without setting out the intermediate holding companies. Ernst & Young Inc. signed its April 2021 report both as Monitor of Carillion Canada Holdings Inc., Carillion Canada Inc., Carillion Canada Finance Corp., Carillion Construction Inc., Carillion Pacific Construction Inc., Carillion Services Inc. and other applicants, including Rokstad Power GP Inc. and Plowe Power Systems Ltd., and as Receiver of companies including Carillion Investments (Canada) Inc. ¹

analysisOn 29 April 2020 the court appointed Ernst & Young Inc. as equitable receiver of related Canadian companies, including Carillion Investments (Canada) Inc., 491313 BC Limited, 2447586 Ontario Inc., Carillion Canada (WOHC) Inc., TWD Roads Management Inc. and Vanbots Capital Corporation, and harmonised the receivership with the CCAA proceedings. The Retirement Plan for Employees of Carillion Canada, which provides defined benefit and defined contribution pensions, is sponsored and administered by Carillion Canada Inc. ¹

analysisUnder the group's global liquidity arrangements, cash of certain Canadian group companies was swept daily into a Carillion Canada account at HSBC Canada and from there into a Carillion Canada account at a branch of HSBC UK. According to the Monitor, Carillion plc carried out a cash sweep of about C$28 million from the Canadian applicants' cash management system on 12 January 2018. About C$27.8 million swept into Carillion Canada's account with HSBC UK was not returned and is held by HSBC UK. On the Monitor's motion the court made an Investigation Order, revised on 6 March 2019, directing the Monitor to investigate, and on 21 February 2020 it declared that HSBC UK had attorned to (accepted) its jurisdiction to determine entitlement to the funds. ¹

analysisSeparately, the Monitor sought relief on trust funds of C$21,699,020.71. Its motion of 30 September 2020 was heard on 28 January 2021 and dismissed on 2 March 2021; on 16 March 2021 the Monitor served a notice seeking leave to appeal, which its thirty-third report of 15 April 2021 supported, noting that the trust funds of C$21.7 million would flow directly to the surety and subcontractors and so reduce their claims against Carillion Construction Inc. The outcome of the leave application is not in the retained report. ¹

analysisSeveral businesses were sold in the CCAA proceedings. The Canadian services portfolio, made up of Business Support Services and the Outland entities, was sold to Fairfax, defined as Hamblin Wasta Investment Counsel Ltd. acting as investment manager of Fairfax Financial Holdings Limited and its affiliates; the vendors included Carillion Construction Inc. and Carillion Services Inc., and the initial closing took place on 7 March 2018. The Monitor's glossary describes two further sales: the EllisDon transaction, with "CCI" and its related party Carillion Ottawa Holdings Inc. as vendors and EllisDon Corporation and EllisDon Ottawa Inc. as purchasers, and the sale of the road maintenance business, which provided year-round maintenance of about 40,000 km of highways in Ontario and Alberta, by "CCI", "CCFC" and TWD Roads Management Inc. to Emcon Services Inc. and 1165565 B.C. Ltd. The retained pages do not spell out "CCI". It most likely denotes Carillion Canada Inc.: the glossary defines the "CCI CDN Master Account" and "CCI UK Master Account" as bank accounts of Carillion Canada, defined as Carillion Canada Inc., and lists "Carillion Construction" and "CCI" separately among the Fairfax vendors, so CCI is not Carillion Construction Inc. On this reading Carillion Canada Inc. was a vendor in the EllisDon and road maintenance sales, an inference the record does not state directly. ¹

analysisOn 13 June 2018 the Ontario court added Rokstad Power GP Inc., 0891115 BC Ltd., Golden Ears Painting & Sandblasting Ltd., Plowe Power Systems Ltd. and Carillion General Partner (B.C.) Limited to the CCAA proceedings as the Rokstad additional applicants. The Monitor's glossary defines the Rokstad transaction as the sale by Rokstad Power GP Inc., 0891115 BC Ltd., Golden Ears Painting & Sandblasting Ltd. and Plowe Power Systems Ltd. to Rokstad Holdings Corporation or its designated purchaser. A list of contracts in a receiver's report filed in court in 2024 records the June 2018 agreements: an asset purchase agreement dated 12 June 2018 among Rokstad Holdings Corporation, RPC Limited Partnership, the four Rokstad vendors, Carillion Canada Holdings Inc., Carillion Canada Inc., Rokstad Power Corporation and two individuals; a co-operation and realization agreement dated 18 June 2018 among RPC Limited Partnership, Rokstad Holdings Corporation, Rokstad Power Corporation, the same two individuals, Carillion Canada Holdings Inc. and Carillion Canada Inc.; and a share purchase agreement dated June 2018 between Carillion USA Inc. and Rokstad Holdings Corporation. The list records the agreements and their parties, not their terms or consideration. ^{1 2}

analysisThe business later went through a receivership of its own, after it had left the Carillion group in 2018. Following an interim receivership from 10 October 2024, the Supreme Court of British Columbia on 6 November 2024 appointed FTI Consulting Canada Inc. as receiver and manager of Rokstad Holdings Corporation, Rokstad Power (2018) Ltd. and related companies, on the petition of Stellex Power Line Opco LLC and 1501841 B.C. Ltd. That proceeding concerns the business's own lenders and contains no finding about Carillion, and the receiver has no role in the Carillion proceedings in the retained record. ²