Following reports that Canadian toy distributor Everest Toys had shut down last month, new court documents today reveal the company has entered into receivership. 

The Ontario Superior Court of Justice has appointed Canadian insolvency firm Spergel as receiver and manager of the case, which filed a factum outlining Everest’s situation on August 27. The document reveals that the toy distributor defaulted on a TD Bank loan including credit facilities of US$16 million and CAD$2.76 million that continue to accrue interest and fees. 

The situation has been bleak for Everest for some time, with TD sending a letter on February 24 calling for the company to pay off all its debts by April 11. After a couple of extensions, the bank then demanded that the payment be made in June. In July, TD finally warned that it would “freeze” the distributor’s account and no longer provide it with any funds. 

Then on August 21, Everest’s lawyers confirmed to the bank that its board of directors had all resigned. As a result, no one is steering the ship at the company, which is owned by a family-operated firm called Putman Investments. TD is now in a position to bring a bankruptcy application against Everest in the coming weeks.

Everest was founded in 1992 and has served as a toy distributor in Canada for Hasbro, Mattel and The LEGO Group for 33 years. Thousands of specialty retailers have also relied on its services to stock new toys and board games.