Two Bay Street investment firms are battling over the assets of Great Slave Helicopters, according to court documents. Great Slave Helicopters is one of the subsidiaries of the now defunct Discovery Air.
Buckling under the weight of its debt, Discovery Air received creditor protection earlier this year. Its assets and liabilities were bought by a company formed by its biggest creditor, Toronto investment firm Clairvest Group Inc., in a deal approved by the courts on July 24.
On Tuesday an Ontario judge ordered creditor protection for Great Slave Helicopters until Oct. 4.
Discovery Air owned Yellowknife-based Great Slave Helicopters (GSH), Air Tindi and Discovery Mining Services, as well as Top Aces, a military pilot training business, and another business based in Chile.
With a fleet of 51 helicopters, Great Slave is one of the biggest helicopter companies in Canada.
Another of Discovery Air's creditors, Toronto-based ECN Capital Corp., says in court documents that Discovery put up eight Great Slave helicopters as a security for a loan ECN provided to purchase aircraft.
ECN is owed $7.3 million. It wants to seize the helicopters and is worried about them losing value while Great Slave Helicopters is under creditor protection.
"ECN has particular concern with respect to a) the maintenance of the helicopters; and, b) the swapping out of engines and major components of the ECN/GSH helicopters while ECN is stayed from exercising its remedies," said ECN official Algis Vaitonis in a sworn affidavit filed Monday.
According to the trustee overseeing the restructuring of Great Slave Helicopters, the company has lost $13.7 million over the last two years and has no prospect of finding a lender to allow it to continue to operate.
ECN is also worried about weakening its claim to the helicopters by other creditors — such as the trustee overseeing the sale — being given priority over Great Slave Helicopters's assets.
The judge granted the helicopter company and ECN two weeks to reach an agreement on how the eight helicopters put up as security will be included in a sale of assets, or establish a process to turn the choppers over to ECN.
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