Canstar Restorations, a property restoration company operating across British Columbia, Alberta and Saskatchewan, was placed into receivership on September 28, 2026, after the Bank of Montreal applied to the court over unpaid debts. The move is intended to pave the way for a pre-arranged sale of the business to Premium Restoration Ltd., under a share purchase agreement signed September 15.
AlixPartners, appointed as receiver, is set to seek court approval of the sale on October 8 through a proposed reverse vesting order, a structure used to transfer a business while leaving certain liabilities behind in a separate residual company.
Years of Losses Led to Default
Canstar, headquartered in Coquitlam, provides emergency restoration services including water, storm and fire damage repair, hazardous materials removal and mould remediation, through its own operations and its LUNA subsidiary, which includes the ABK Restoration Services, Norhaz Solutions, Universal Restoration Systems and Lydale divisions. Before receivership, the group ran from 15 leased locations beyond its head office, three of which had already been vacated, and employed about 339 people.
The company’s financial position had been deteriorating for years. Sales fell to approximately $76 million in fiscal 2025 from about $84.8 million in 2024, while net losses totalled roughly $6.8 million in 2024, $30.5 million in 2025, and $7.3 million in the first half of 2026. By June 30, 2026, the accumulated deficit reached approximately $70 million, with the 2025 results also affected by accounting restatements covering that year and prior periods. Collection periods from Canstar’s roughly 680 customers, mostly insurers and adjusters, commonly exceeded 90 days, adding to cash pressure.
As of September 16, Canstar owed BMO more than $16.85 million across its operating, term and other facilities, and had been in default for several months. As of June 30, the group also owed more than $23.4 million to Fulcrum Capital Partners and Canstar Construction Ltd. under subordinate secured debt, with a Fulcrum affiliate holding an additional $5 million security interest tied to the BMO facilities. Suppliers were owed approximately $13.6 million, with 30% of vendor payables more than 120 days overdue, and 19 litigation actions were pending against certain Canstar entities.
Sale Process and Next Steps
BMO had agreed to hold off on enforcement until after March 31, 2026, an arrangement extended first to July 31 and then, on August 14, to September 30. Summit Cap Advisors Ltd., retained in April, ran a sale process overseen by AlixPartners starting in May, contacting more than 50 prospective buyers. Of those, 33 signed confidentiality agreements and four submitted letters of intent, with Premium Restoration’s proposal selected as the preferred offer.
The purchase price and deposit under the SPA have not been disclosed, but AlixPartners said the deal is expected to repay BMO in full, while Fulcrum and Canstar Construction would face substantial shortfalls. The receiver’s analysis found that a liquidation would generate significantly less than the proposed sale. The transaction is designed to keep the business operating and preserve employment for most staff, while retaining liabilities to trades and vendors on active projects. Other assets, contracts and liabilities would be moved into a newly created residual company.
The parties are using the reverse vesting order structure because many of Canstar’s customer contracts require consent before they can be transferred, and pursuing those approvals through a standard asset sale would risk delays the company cannot afford given its lack of funding for continued losses. The agreement carries an outside completion date of October 30. Lawson Lundell is acting for BMO, Fasken for the receiver, and BLG for Premium Restoration.
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