By: Michael Lauzon
April 3, 2014
Profile extrusion equipment from a failed business in Newmarket, Ontario, will be auctioned off on April 16.
Equipment from Profilex Inc. will be sold in a live webcast auction held by Asset Services of Toronto. Profilex was petitioned into receivership following an application by its major lender, Bank of Montreal, in October. Grant Thornton Ltd. of Toronto became Profilex’s receiver on Feb. 3.
Profilex owes Bank of Montreal about C$2.75 million (US$2.5 million). A spokesman for Grant Thornton said he could provide no other figures for amounts owed to other secured and unsecured creditors or an estimated asset value because Profilex officials would not cooperate with the receiver.
According to court documents, Profilex defaulted on loans and security agreements and repeatedly overdrew its account with Bank of Montreal. Court documents contain copies of emails the bank sent to Profilex President Ernesto Alvarez-Felipe and other company officials drawing attention to defaults and complaining that Profilex officials appeared evasive when the bank requested meetings.
Profilex operated out of a 100,000-square-foot leased facility in Newmarket and listed patio door and window production as its main business. The landlord, Granite Real Estate Investment Trust, locked out the company in October because Profilex was arrears in its rent. The lockout jeopardized Bank of Montreal’s security in Profilex’s equipment and so it petitioned for receivership. Profilex appealed the appointment of a receiver but later dropped the appeal.
Court documents allege Profilex was operating at 10 percent capacity at one point last year and its forecast to the bank of big sales to major retailers did not pan out.
Profilex investors bought a previously failed business at the Newmarket site in early 2012. Premium Products Inc. went into receivership in 2011 and BDO Canada Ltd. of Toronto was appointed receiver in late September of that year. Premium was petitioned into bankruptcy by major creditors.
Profilex equipment for sale includes 15 extruders, four coextruders, sizing tables, pullers, cut-off saws and water tanks, chillers and granulators, tool-making equipment and about 160,000 pounds of virgin and regrind PVC.