Case Study #1

Operating Receivership

The Problem

A greenhouse operation was significantly overleveraged and experiencing a severe cash flow deficiency. As a result of the cash flow problems, the company had arrears with a utility company who had issued notice that it would terminate service.  This action would result in the crops spoiling and loss of revenue as well as complicating future operations.

In addition, the company did not have sufficient resources to fund the required product and services for the next growing period.

Actions Taken

In order to stay the termination of the utility, an immediate application was made to appoint Rosen Goldberg Inc. as interim receiver.

In consultation with the first-ranking secured lender, a decision was made forthwith to continue to fund the ongoing operations.  As a result of depressed prices for the greenhouse product and certain operational issues, a loss was incurred in the first four-month growing period.  The business was marketed by the Receiver during this period, but no acceptable offers were received.

Despite the loss, the first-ranking lender agreed to fund further operations.  Certain key operational changes were implemented including changing management, retaining a new broker to sell the product and undertaking some modest capital improvements.  During the next eight months, operations turned around and the business generated substantial profits.

The Receiver renewed a marketing process and ultimately sold the business as a going concern.


By continuing operations and stabilizing the business, the Receiver obtained a realization of approximately one hundred percent higher than the initial offer and the lender had a significantly higher recovery.

By operating through a receivership as opposed to a CCAA, and implementing systems and oversight that did not require the Receiver’s constant attendance at the site, the professional fees were kept at a reasonable level, resulting in a higher net recovery.