Mississauga, Ont.-based Walgre Transport and affiliate 2865647 Ontario Ltd., are continuing their Notice of Intention (NOI) proceedings under the Companies’ Creditors Arrangement Act (CCAA).
The company runs a fleet of about 182 tractors and 426 trailers, employing about 225 employees and contractors, providing cross-border freight services.
“The North American trucking and logistics industry has experienced a downturn, driven by factors such as rising interest rates and fuel prices, and the recent imposition of tariffs by the United States,” court filings read. “As a result, the applicants have excess fleet capacity and have not been able to meet their obligations as they become due.”
In June, the companies filed a NOI under the Bankruptcy and Insolvency Act, and the court-appointed monitor says they’ve acted in good faith, shedding excess equipment and securing a debtor-in-possession loan.
It now seeks to continue restructuring efforts under the protection of CCAA. The company lists Kanwaldeep Singh Grewal as its sole director and operates from a head office in Mississauga, with a related business based in the U.S. The head office has been sold as part of the restructuring, with the deal set to close in December.
“Despite the considerable operational costs savings as a result of the surrender of the non-essential equipment (50 tractors and 60 trailers thus far) and the progress made in the NOI Proceedings, the applicants require the flexibility and protection afforded by the CCAA,” the monitor, Doane Grant Thornton (previously serving as proposal trustee) reported.
A monitor’s report said the company’s financial challenges stemmed from: “Changes to the North American economic and political climate (to a greater extent) and the global economic and political landscape (to a lesser extent) have greatly affected the companies’ customers, particularly with respect to the increase in and uncertainties regarding tariffs, and the negative effects of same, as well as recessionary concerns, on consumer demand in general. As a result, over the past six months, the companies have experienced reduced customer volumes leading to the underutilization of the fleet and over-capacity in terms of its overall cost structure, which have all caused liquidity issues and threatened the current and future viability of the companies’ business.”
The monitor indicated a stay of proceedings under CCAA protections will allow it to facilitate its restructuring and that the company has acted “in good faith and with due diligence.”
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