Operators of northern Ontario power plant forced into bankruptcy
CTV
Validus Power Corp., which operates a power plant in northern Ontario, has been forced into receivership.
Validus Power Corp., which operates a power plant in northern Ontario, has been forced into receivership.
Validus ran the power plant under an agreement with Macquarie Equipment Finance Ltd. In April 2022, Macquarie bought the turbines, plant and equipment from Iroquois Falls Power Corp. for $45 million, then leased it back to Validus to operate.
Under the lease agreement with Validus, Macquarie was to receive monthly rent payments, with the understanding that the corporation could be forced into bankruptcy if it defaulted.
By the time the company was forced into interim receivership in August of this year, Macquarie was still owed more than $40 million.
“Events of default have clearly occurred,” the judge reviewing the case said.
“In addition to the fundamental monetary defaults in the form of the failure to repay amounts when due, there are additional covenant and operating defaults, including the failure to pay rent, the failure to remit HST and other taxes, the breach of an agreement with a key customer, and the failure to properly maintain books and records and to maintain insurance.”
When problems emerged early this year, the sides reached a new agreement in February, but the terms of that deal have also been violated.