Receivership of Hickman Equipment (1985) Limited

2002 01T 0352
IN THE SUPREME COURT OF NEWFOUNDLAND AND LABRADOR
IN THE MATTER OF a Court ordered
Receivership of Hickman Equipment (1985) Limited
(“Hickman Equipment”) pursuant to Rule 25 of the
Rules of the Supreme Court, 1986 under the
Judicature Act, R.S.N. 1990, c. J-4, as amended
AND IN THE MATTER OF the Bankruptcy and
Insolvency Act, Chapter B-3 of the Revised
Statutes of Canada, 1985, as amended
SEVENTH REPORT OF THE RECEIVER
BACKGROUND
By order of this Honourable Court (the “Receivership Order”) granted on the 13th day of
March 2002 and filed with the Court on the 14th day of March 2002 it was ordered that
PricewaterhouseCoopers Inc. (“PWC”) be appointed Receiver of the Assets of Hickman
Equipment (the “Receiver”).
By Order of this Honourable Court dated the 14th day of May 2002 and filed on the 17th
day of May, 2002, the Court approved a Realization Plan, Investigation Plan – Phase I,
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Seventh Report of Receiver
November 5, 2002
Claims Plan and Cost Allocation Plan. Copies of the Court approved Plans are on the
Receiver’s web site at www.pwcglobal.com/brs-hel.
The Receiver previously filed reports to the Court for the period from our appointment date
to April 30, 2002 and for each month thereafter. The Receiver also filed a separate report
relating to the tenders results and phase 1 of the Investigation Plan.
IMPLEMENTATION OF COURT APPROVED PLANS
REALIZATION PLAN
Unrealized assets
The Receiver received Court approval for a process to realize on the remaining assets
(excepting assets mentioned below) in a Court application on October 7, 2002. The lists
of assets which are the subject of the court application are attached as Appendix A to this
report.
The Receiver will realize on assets valued at less than $25,000 by auction or
private sale without further court order, except for a number of vehicles for which the
proposed method of sale is by retail sale by Hickman Motors Limited.
Accounts Receivable
Collections of accounts receivable for the month of October were $20,282 bringing the
total collected to $855,970. During October the receiver reallocated $10,390 previously
reported as collections to parts sales in the schedule of R&D and a further $25,000 was
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Seventh Report of Receiver
November 5, 2002
reallocated to equipment sales as a result of the completion of a sale of heavy equipment
that had been pending from March 13, 2002. The Receiver estimates a further $30,000 $35,000 will be collectible in due course. The Receiver is seeking legal advice relating to
set off rights claimed by various customers.
Corporate Income Tax Refunds
We have completed the December 31, 2001 corporate tax return using Hickman
management’s internally generated financial statement adjusted for our preliminary
adjustments to the values of inventories. The return was filed June 18, 2002.
was assessed by Canada Customs & Revenue Agency (“CCRA”).
The return
However, CCRA
initiated an audit in September which was continuing as at October 31, 2002 which may
delay payment of the expected refund of approximately $900,000.
Outstanding Tax Issues
All traditional tax recovery avenues have now been addressed and the appropriate returns
filed. The only tax paid which remains unclaimed for refund is capital tax for 1998 to 2000
in the amount of approximately $90,000. Any recovery would be contingent on finding the
financial statements were not in conformity with GAAP.
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Seventh Report of Receiver
November 5, 2002
Parts Inventory:
Non-John Deere Parts
Sales of non-John Deere parts by Ontrac Equipment Services Inc. up to October 11,
2002 total $216,736 of which $179,562 has been collected.
Discussions are ongoing among representatives of the Receiver, CIBC and John
Deere relating to a prospective sale of all parts. An application to Court to deal with
all remaining parts is expected in the next few weeks.
John Deere Parts
The John Deere parts continue to be stored at former Hickman locations pending
determination of the most satisfactory method of realization.
The Initial Opinions for all secured claims, including JD’s claim to a security interest in
parts are posted on the Receiver’s web site.
Discussions are ongoing among representatives of the Receiver, CIBC and John Deere
relating to a prospective sale of all parts.
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Seventh Report of Receiver
November 5, 2002
Heavy Equipment (Whole Goods and Attachments)
Full details of the proceeds of the sale of heavy equipment and attachments are
disclosed on the Receiver’s web site. During October the Receiver finalized the sale
of one unit that had been pending from March 13, 2002 and, with the agreement of
Wells Fargo, completed the sale at $103,500 of the second unit subject to their claim.
INVESTIGATION PLAN
On May 14, 2002, the court approved the Investigation Plan – Phase I. The Receiver
filed its report on August 14, 2002. The Receiver met the Creditors’ Committee on
October 4th and received feedback relating to the next steps and possible actions
available to various parties. Information is being sought from third parties. Further
action will be taken upon receipt.
CLAIMS PLAN
On May 14, 2002 the Court approved the Claims Plan.
Final Determinations of the validity of secured claims against assets were posted for
18 claims in late October. Final Determinations will be posted for most secured
creditors in early November.
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Seventh Report of Receiver
November 5, 2002
COURT PROCEEDINGS AND ORDERS
The following court proceedings took place in October:
1. On September 9 – 11, 2002, the Interlocutory Application (Inter Partes)
of Wells Fargo for the return of two pieces of equipment in the
possession of the Receiver was heard by Justice Hall. The decision is
pending.
2. The Receiver made an Interlocutory Application (Inter Partes) for the
disposal of certain assets remaining in its possession or that will come
into its possession. The Court issued an Order authorizing the sale of
assets in accordance with the Receiver’s application. The Court Order is
pending
3. GMAC applied to Court on October 28, 2002 to request that funds be
distributed to GMAC from the proceeds of the sale of three pieces of
equipment. The hearing was adjourned until November 19, 2002.
4. A draft order with respect to the Interlocutory Application of Fabtek
Corporation, which was heard on June 20, 2002, was forwarded to Hall J.
for execution on October 28, 2002. The Order is still pending.
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Seventh Report of Receiver
November 5, 2002
ACCRUED FEES OF THE RECEIVER AND LEGAL COUNSEL
Attached as Appendix “A” is a summary of the accrued fees of the Receiver and
Receiver’s Counsel to October 31, 2002.
STATEMENT OF RECEIPTS AND DISBURSEMENTS
Attached as Appendix “B” is a Statement of Receipts and Disbursements for the period
from March 13, 2002, the date of the Receiver’s appointment, to October 31, 2002.
The above is respectfully submitted as of the 5th day of November, 2002.
Yours very truly,
PricewaterhouseCoopers Inc.
Receiver and Manager of
Hickman Equipment (1985) Limited
Per:
__________________________________
James A. Kirby, CA, CIRP
Senior Vice-President
JAK/cmc
Encl.
Hickmans/Reports/ReportToCourt-Nov5(#7).doc
7
Hickman Equipment (1985) Limited
Receiver's fees
Appendix "A"
Billings
PricewaterhouseCoopers
#1
#2
#3
#4
#5
#6
#7
#8
#9
# 10
# 11
Paid to Oct. 31, 2002
Total
$
188,215.50
21,172.63
201,221.82
117,620.00
49,590.00
90,479.00
85,410.00
40,000.00
71,785.70
56,172.26
58,136.00
$
28,232.33
3,175.89
30,183.27
17,643.00
7,438.50
13,571.85
12,811.50
6,000.00
10,767.86
8,425.84
8,720.40
$
216,447.83
24,348.52
231,405.09
135,263.00
57,028.50
104,050.85
98,221.50
46,000.00
82,553.56
64,598.10
66,856.40
$
979,802.91
$
146,970.44
$
1,126,773.35
Outstanding
23,564.00
72,958.00
357.00
$ 1,076,681.91
Total PwC
HST
3,534.60
10,943.70
53.55
$
161,502.29
27,098.60 Bankruptcy
83,901.70 Receivership
410.55 Bankruptcy
$
1,238,184.20
Hickman Equipment (1985) Limited
Legal fees
Patterson Palmer
#1
#2
#3
#4
#5
#6
#7
$
Paid to Oct. 31, 2002
267,150.66
Outstanding
Total Patterson Palmer
Merrick Holm
#1
#2
#3
#4
#5
#6
17,674.10 $
57,172.77
74,003.95
36,612.82
20,972.83
27,546.86
33,167.33
2,631.17 $
8,570.97
11,052.29
5,431.47
3,119.67
4,120.78
4,967.15
39,893.50
50,719.66
20,305.27
65,743.74
85,056.24
42,044.29
24,092.50
31,667.64
38,134.48
307,044.16
7,553.20
58,272.86
$
317,870.32
$
47,446.70
$
365,317.02
$
43,145.54
70,208.79
36,103.08
23,163.03
31,644.96
27,580.12
$
6,471.83
10,510.37
5,403.80
3,474.45
4,746.75
4,069.52
$
49,617.37
80,719.16
41,506.88
26,637.48
36,391.71
31,676.64
Paid to Oct. 31, 2002
Outstanding
231,845.52
34,676.72
266,549.24
52,553.54
7,875.98
60,429.52
Total Merrick Holm
$
284,399.06
$
42,552.70
$
326,978.76
White Ottenheimer & Baker
#1
$
16,470.60
$
2,387.94
$
18,858.54
Paid to May 31, 2002
Total legal fees
16,470.60
$
618,739.98
2,387.94
$
92,387.34
18,858.54
$
711,154.32
IN THE MATTER OF THE RECEIVERSHIP OF
HICKMAN EQUIPMENT (1985) LTD
STATEMENT OF RECEIPTS AND DISBURSEMENTS
FOR THE PERIOD ENDING OCT. 31, 2002
Appendix "B"
MARCH 13 SEPTEMBER 30
OCTOBER
RECEIPTS
Accounts receivable
Accounts receivable - sundry
Auction commission
Auction of equipment and attachment inventory
Cash on hand
Cost allocation
HST collected
Interest
Recovery of freight
Sale of assets by tender - Show Tech and Celebration
Sale of equipment inventory
Sale of parts inventory
Third party auction proceeds
US Exchange
TOTAL RECEIPTS
871,078
10,213
1,182,973
14,518,522
4,087
181,165
2,645,416
61,004
20,000
772,165
2,809,075
169,172
466,968
6,193
23,718,031
(15,108)
1
48,583
34,341
255,625
10,390
333,832
DISBURSEMENTS
Advances to Trustee
Appraisal fee
Auction commission and expenses
Computer file maintenance and training
Equipment storage costs
HST paid and remitted
Insurance
Legal fees
Miscellaneous expenses
Monitor's fees
Monitor's legal fees
Office expenses
Receiver's fee
Reimbursement of third party auction proceeds
Rent and occupancy costs
Repairs & maintenance
Salaries and benefits
Security
Tender advertising
Travel expenses
TOTAL DISBURSEMENTS
EXCESS OF RECEIPTS OVER DISBURSEMENTS
Funds on hand - General
Funds on hand - In Trust re Equipment Sale & Wells Fargo
FUNDS ON HAND
Receiver's Accruals
HST Payable
Legal Fees
Rent
Receiver's fee
Receivership
Bankruptcy
TOTAL RECEIVER'S ACCRUALS
EXCESS OF RECEIPTS NET OF ACCRUALS
MARCH 13 OCT 31
$
855,970
10,214
1,182,973
14,518,522
4,087
181,165
2,693,999
95,345
20,000
772,165
3,064,700
179,562
466,968
6,193
24,051,863
$
6,446
35,701
1,139,075
5,627
113,098
2,544,260
30,206
454,719
6,114
123,204
35,188
14,902
921,667
466,968
24,883
9,471
19,687
12,587
8,117
2,652
19,324
60,748
21
58,136
111
126
-
6,446
35,701
1,139,075
5,627
113,098
2,563,584
30,206
515,467
6,135
123,204
35,188
14,902
979,803
466,968
24,994
9,471
19,813
12,587
8,117
2,652
5,974,572
138,467
6,113,039
17,743,459
195,365
17,938,824
17,688,074
250,750
17,938,824
130,415
102,733
1,500
72,958
23,921
331,527
17,607,297