QM Environmental
Industry: Construction
Areas of Focus:
Companies’ Creditors Arrangement Act (CCAA)
Construction Industry Restructuring
Lien Regularization Orders (LROs)
Private Equity Restructuring
Distressed M&A
Construction Litigation
Reverse Vesting Orders
Sale and Investment Solicitation Processes (SISP)
Legal Team:
QM Environmental is a private equity-owned construction and environmental services firm providing integrated abatement, remediation, demolition, and emergency response services across Canada.
As operational and financial pressures mounted, the company entered restructuring proceedings under the Companies’ Creditors Arrangement Act (CCAA) while carrying significant debt obligations, including approximately $30 million owed to Scotiabank and more than $45 million owed to trade creditors.
The restructuring required balancing the interests of secured lenders, bonding companies, project stakeholders, and a large creditor body, while preserving active projects, workforce retention, and enterprise value.
Challenge
QM Environmental’s challenges extended beyond short-term liquidity pressure.
The company was dealing with structural operational instability driven by internal management turnover, alongside project-specific cost overruns that impacted profitability across multiple engagements.
At the same time, the business faced:
opposition from key secured creditors during the CCAA filing;
active construction liens impacting cash flow across projects;
pressure from a large and varied creditor group;
the need to preserve ongoing projects and customer relationships; and
the risk of disruption to employees, operations, and bonded work.
Without immediate stabilization, the company risked losing control of its projects, stakeholder trust, and the business itself.
A key issue emerged around the flow of funds on construction projects where liens had been registered. Without Court intervention, those liens threatened to impair operations and restrict the company’s ability to continue functioning during restructuring.
Method
RECON led the company through an opposed CCAA proceeding while managing negotiations across a highly fragmented stakeholder landscape.
The strategy focused on stabilizing operations, preserving projects and creating the conditions necessary for a transaction that would protect long-term enterprise value.
RECON:
successfully navigated the company through a contested CCAA filing opposed by secured creditors;
advanced strategic negotiations with lenders, bonding companies, and other stakeholders to build consensus around the restructuring process;
sought and obtained Court approval of a Lien Regularization Order (LRO), allowing project funds to continue flowing despite registered liens;
structured a Court-approved Sale and Investment Solicitation Process (SISP);
implemented a transaction through a reverse vesting order and share subscription structure; and
preserved profitable projects, operations, and employee stability throughout the restructuring process.
The restructuring strategy was designed not only to address creditor pressure, but to minimize operational disruption in an industry where stalled projects and workforce instability can rapidly erode enterprise value.
Result
RECON successfully guided QM Environmental through the CCAA process and completed a transaction that preserved the business and minimized disruption to ongoing operations.
The outcome:
stabilized operations during a highly contested restructuring;
allowed continued project execution despite active lien complications;
preserved the continuation of profitable projects and workforce operations;
maintained enterprise value through a reverse vesting transaction;
facilitated the acquisition of the business by the parent company;
built stakeholder consensus across lenders, bonding companies, and creditors; and
minimized disruption to employees, customers, and active construction projects.
The restructuring kept the business running while creating a path forward for the business under new ownership and capitalization structures.
