World Wide Carriers and its related businesses have sought CCAA creditor protection and filed a Notice of Intent as they seek to restructure the business after a dispute among ownership exacerbated rapidly deteriorating market conditions.
B. Riley Farber (BRF) has been named the proposed Monitor. It reported in its pre-filing that the company was “largely profitable until 2023” when a dispute between the four shareholders resulted in protracted litigation and a lack of coordination.
The company is owned by Sukhdev Dhaliwal, Harchand Dhaliwal, Paramjit Cheema, and Swaranjit Jhajj (each owning 25%). Due to liquidity concerns, the company partially shut down in early February. At the time it had about 30 employees, some of whom were no longer workers as they claimed they hadn’t been paid.
The companies owe BMO about $15 million and BVD Capital Corp. $11 million, in addition to another $7 million of trade payables.
“Based on the review of the balance sheets, on a standalone basis and in aggregate, and a review of the obligations to key stakeholders, the Proposed Monitor is of the view that the applicants are insolvent,” BRF wrote in its pre-filing.
World Wide Group consists of more than 15 companies, the main being World Wide Carriers. At their peak they operated 215 trucks and 450 trailers providing supply chain services through North America. They earned more than $50 million in revenue in 2022.
Among the trucking entities within the organization are World Wide Carriers, World Wide Transport, World Wide Carriers US, JCD Cartage and Popular Freight Systems. There are also numerous real estate holdings.
WWC operates out of a rented Mississauga property. Collectively the companies currently have about 92 trucks, 424 trailers and 30 employees as well as about 140 contractors, most of whom worked as drivers operating company equipment.
The company filed for protection when its insurer threatened to cancel coverage due to non-payment of premiums.
But it began experiencing challenges in 2023, when a dispute occurred between Dhaliwal and the three other owners. At issue was a rent disagreement between WWC and the properties within the company’s portfolio, which ultimately saw WWC lease new space from a third party for operations at a cost of $180,000 a month.
When WWC encountered cash flow challenges it was no longer able to rely on revenue generated by the company’s other real estate holdings and had to turn to costly factoring options.
“The disruption caused by the shareholder dispute compounded the effects of the unfavorable economic climate on the business and added to the liquidity pressures on the business,” court filings say.
While the dispute dragged on, the company was slow to react to slowing trucking demand and failed to quickly reduce the fleet size. BMO delivered notices of breach to WWC and related real estate properties in January and BVD issued notices of intention to enforce security in February.
Swaranjit Jhajj, in an affidavit, indicated the real estate holdings are valuable enough to settle the company’s debts with funds remaining to resume operations of the transport company once restructured.
“The applicants believe that they can re-start the business on a cash positive basis once the key creditors are dealt with, likely with a smaller and more manageable fleet and level of operations,” Jhajj said.
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