COURT FILE NUMBER 1601-04111 COURT OF QUEEN'S BENCH OF ALBERTA JUDICIAL CENTRE CALGARY PLAINTIFF ALBERTA TREASURY BRANCHES DEFENDANT MILLENNIUM STIMULATION SERVICES LTD. APPLICANT KPMG INC., IN ITS CAPACITY AS COURT-APPOINTED RECEIVER AND MANAGER OF MILLENNIUM STIMULATION SERVICES LTD. DOCUMENT FIRST REPORT TO THE COURT SUBMITTED BY KPMG INC., IN ITS CAPACITY AS COURT-APPOINTED RECEIVER AND MANAGER OF MILLENNIUM STIMULATION SERVICES LTD. DATED MAY 30, 2016 ADDRESS FOR SERVICE AND KPMG INC. CONTACT INFORMATION OF 3100, 205 – 5 Ave. S.W. PARTY FILING THIS DOCUMENT Calgary, AB T2P 4B9 Att: Neil Honess/Ryan Adlington Telephone: 403-691-8014/403-691-8504 Facsimile: 403-691-8008 Email: [email protected][email protected]MCCARTHY TETRAULT LLP Suite 4000, 421-7 th Avenue SW Att: Sean Collins/Walker MacLeod Telephone: 403-260-3531/403-260-3710 Facsimile: 403-260-3501 Email: [email protected][email protected]
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31207949.2
COURT FILE NUMBER 1601-04111 COURT OF QUEEN'S BENCH OF ALBERTA JUDICIAL CENTRE CALGARY PLAINTIFF ALBERTA TREASURY BRANCHES DEFENDANT MILLENNIUM STIMULATION SERVICES LTD. APPLICANT KPMG INC., IN ITS CAPACITY AS COURT-APPOINTED
RECEIVER AND MANAGER OF MILLENNIUM STIMULATION SERVICES LTD.
DOCUMENT FIRST REPORT TO THE COURT SUBMITTED BY
KPMG INC., IN ITS CAPACITY AS COURT-APPOINTED RECEIVER AND MANAGER OF MILLENNIUM STIMULATION SERVICES LTD. DATED MAY 30, 2016
ADDRESS FOR SERVICE AND KPMG INC. CONTACT INFORMATION OF 3100, 205 – 5 Ave. S.W. PARTY FILING THIS DOCUMENT Calgary, AB T2P 4B9 Att: Neil Honess/Ryan Adlington Telephone: 403-691-8014/403-691-8504
Total Cash Disbursements 83,398 Excess Receipts Over Disbursements 111,124
Note 1: Excluded from the cash receipts are the bid deposits received pursuant to the SP.Note 2: Excluded from the disbursements are the bid deposits returned to unsuccessful bidders pursuant to the SP.
Note 3: The US$ conversion loss relates to the exchange rate loss on bid deposits originally received in US dollars, converted to Canadian dollars for deposit then converted back to US dollars for return to the unsuccessful bidders.
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60. The Receiver and its legal counsel have billed and/or accrued fees of $193,757.83 and $18,740.66
to May 20, 2016 and to April 30, 2016, respectively. To date no professional fees have been paid.
These fees are collectively referred to as the “Receivership Professional Fees”.
61. At the June 6, 2016 hearing, the Receiver will be seeking approval of the Receivership Professional
Fees. Copies of the invoices described therein, including detailed time analysis, will be made
available to the Court at the June 6, 2016 hearing if requested.
62. The activities of the Receiver and its counsel are documented in this Report and the First
Supplemental Confidential Report. The Receiver has dealt with a variety of assets (including
patents and associated intellectual property, nuclear licenses, equipment and real property interests)
in multiple jurisdictions. The Receiver has secured offers from reputable counterparties for a large
portion of the assets in a little over two months, subject only to approval of this Honourable
Court. The Receiver is of the view that the Receivership Professional Fees have been incurred in
a prudent and economical matter and are fair and reasonable in all of the circumstances.
March 24, 2016 - March 31, 2016 1,534.00 76.70 1,610.70 April 1, 2016 - April 30, 2016 16,314.25 815.71 17,129.96
Total McCarthy Tétrault 18,740.66 Total Professional Fees 212,498.49
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6. MARKETING PROCESS
63. The Receiver has provided further detailed information on the marketing process in the First
Supplemental Confidential Report. In general, the Receiver is of the view that the marketing efforts
exposed Millennium’s Property to the market for a reasonable time, was transparent, and was
designed and in fact did obtain the highest and best value for the Property given the stated timeline
and available funding in conjunction with FirstEnergy’s pre-receivership marketing and sales
efforts.
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7. RECOMMENDATIONS
64. We submit this First Report in support of our Application respectfully requesting this Honourable
Court to:
a) Approve the First Report and the activities of the Receiver described herein;
b) Approve the Statement of Receipts and Disbursements for the period March 24, 2016 to
May 26, 2016; and
c) Approve the Receivership Professional Fees for the Receiver for the period from March
24, 2016 to May 20, 2016 and the Receiver’s legal counsel from the period from March
24, 2016 to April 30, 2016.
All of which is respectfully submitted this 30th day of May, 2016.
KPMG INC., COURT-APPOINTED RECEIVER AND MANAGER OF MILLENNIUM STIMULATION SERVICES LTD., and not in its personal capacity
Per: Neil A. Honess Senior Vice President Per: Ryan J. Adlington Senior Vice President
APPENDIX A
Receivership Order dated March 24, 2016
APPENDIX B
Notice and Statement of the Receiver (Form 87)
Page 1 of 2
BANKRUPTCY AND INSOLVENCY ACT
Form 87
Notice and Statement of the Receiver and Manager (Subsections 245(1) and 246(1) of the Act)
IN THE MATTER OF THE RECEIVERSHIP OF THE PROPERTY OF
MILLENNIUM STIMULATION SERVICES LTD.
The Receiver and Manager gives notice and declares that:
1. On the 24th day of March, 2016, the undersigned, KPMG Inc., became the Receiver and Manager (the “Receiver”) in respect of the property of Millennium Stimulation Services Ltd. (“Millennium” or the “Property”). The Property is described below:
The Property as at March 24, 2016 can be summarized as follows1:
Estimated Book Value (CAD) Accounts Receivable 6,500.00 Prepaid Deposits 640,907.59 Equipment Deposits 982,160.83 Inventory 750,223.12 Property, Plant & Equipment 37,851,980.46 Total 40,231,772.00
2. The undersigned became a Receiver pursuant to an Order of the Court of Queen’s Bench of Alberta (Action No. 1601-04111). A copy of the entered and duly executed Court Order is attached to this notice.
3. The undersigned took possession or control of the property described above on the 24th day of March, 2016.
4. The following information relates to the Receivership: (a) Address of insolvent persons: Suite 500, 444 5th Avenue SW Calgary, AB T2P 2T8
(b) Principal line of business: Oilfield services
(c) Location of businesses: 2047 Bullshead Road, Dunsmore, AB T1B 0K9 #22, 2269-2nd Avenue Dunsmore, AB T1B 0K3
1 The above summary of estimated assets has been prepared based on certain available information.
Notice and Statement of the Receiver (Subsections 245(1) and 246 (1))
Page 2 of 2
Box 1749, 201 Shand Road., RM of Estevan #5 Estevan, SK S4A 1C8 10 Breeze Street Estevan, SK S0C 0M0
Suite 500, 444 5th Avenue SW Calgary, AB T2P 2T8
(d) Amount owed by the insolvent persons to each creditor who holds security on the property described
above2: Amount CAD ($) Alberta Treasury Branches 17,049,825.08
(e) The list of other creditors of the insolvent persons and the amount owed to each creditor and the total amount due by the insolvent persons is attached to this notice.
(f) The intended plan of action of the Receiver during the receivership, to the extent that such a plan has been determined, is to preserve the property of the Companies with a view to possibly sell or otherwise realize on that property, subject to various considerations including receipt of further instructions from the Court as deemed appropriate.
(g) Contact Person for Receiver: Lexi Ng KPMG Inc. 205, 5th Avenue SW, Suite 3100 Calgary, AB T2P 4B9 Telephone: (403) 691-8475 Facsimile: (403) 691-8008 Email: [email protected]
Dated at Calgary, Alberta, this 1st day of April, 2016. KPMG Inc., in its capacity as Receiver and Manager Millennium Stimulation Services Ltd. and not in its personal capacity
Per: Neil A. Honess Senior Vice President
1 The above summary of estimated assets has been prepared based on certain available information.
APPENDIX C
Interim Statement of Receipts and Disbursements from March 24, 2016 to May 26, 2016
RECEIPTS:Advance from secured creditor 150,000.00 Sale of trucks (pre-receivership) 44,435.25 Miscellaneous refund 87.41$
TOTAL RECEIPTS 194,522.66$
DISBURSEMENTS:Occupation rent 59,385.51 IT services 6,525.02 External counsulting 4,715.98 Security 3,945.00 GST paid 3,791.07 US Exchange re return of bid deposit 2,270.00 Insurance 1,194.50 Payroll services 495.59 Loan interest 470.14 Utilities 314.43 Bank charges 221.02 Filing fee 70.00$
TOTAL DISBURSEMENTS RELATED TO POST-APPOINTMENT MATTERS 83,398.26
TOTAL DISBURSEMENTS 83,398.26$
EXCESS OF RECEIPTS OVER DISBURSEMENTS 111,124.40$
FOR THE PERIOD MARCH 24, 2016 TO MAY 26, 2016RECEIVER'S INTERIM STATEMENT OF RECEIPTS AND DISBURSEMENTS
IN THE MATTER OF THE RECEIVERSHIP OFMILLENNIUM STIMULATION SERVICES LTD.