Canada
11 December 2007
Receiver liquidating last of assets as protection from creditors winds up
Speedy will no longer be a "somebody" in the auto-repair business.
Court protection for insolvent SMK Speedy International Inc. has ended and a receiver is currently in the process of selling the company's remaining assets.
An Ontario court lifted Speedy's protection from creditors late last week after the holder of more than $2.8 billion in debt indicated the company would need more money than the maximum amount available under debtor-in-possession financing.
The company was the country's second-biggest auto-repair chain and used the slogan, "at Speedy, you're a somebody." Speedy had hoped to buy time under court protection and sell as many of 27 corporate stores as possible in an effort to survive.
But Dean Topolinski, president of the numbered company holding the debt, says in a court affidavit it's clear Speedy will sell more assets, which will mean the end of the firm. Therefore, there is no need for further court protection and higher costs, he said.
"It is evident that the intention of Speedy is to have all of its assets sold, and that it does not intend to continue to operate beyond the conclusion of the sales process," Topolinski said.
In addition to corporate outlets, Speedy had 47 franchise operations across Canada.
An Alberta company that owned the Minute Muffler repair-shop network took over struggling Speedy in 2004. The new owners had unloaded 60 corporate stores until the latest sale.
At the start of proceedings under the federal Companies' Creditors Arrangement Act early last month, SMK suspended operations at 26 corporate shops and terminated all 115 employees at those operations and at the company's head office in downtown Toronto.
SMK Speedy has negotiated a letter of intent with Meineke Canada Co. for it to buy the assets of 10 of those shops.
Meineke is a subsidiary of United States-based Meineke Car Care Centres, which operates about 900 franchises here and south of the border, and in Central and South America, China, Saudi Arabia and the Caribbean.
Speedy and its lenders had also contemplated that the franchise businesses would be sold to Minute Muffler.
Minute Muffler made an offer but the lenders and the court monitor overseeing the restructuring process decided to contact other parties in the industry about possible interest for the franchise network.
Court filings showed unidentified parties interested in Speedy expressed concern that Minute Muffler had an advantage on inside corporate information.
The monitor could not get other data from Speedy for consideration by possible bidders, the filings added. Parties have also complained about a lack of a time to conduct proper due diligence.
Speedy lost $5 million before interest, taxes and depreciation in the first eight months of this year, according to the company's court filings.
Source :
www.wheels.ca
