About eight months after Donnelly Group, the owner of numerous bars and restaurants in Vancouver and Toronto, filed for creditor protection under the Companies' Creditors Arrangement Act (CCAA), there is now a faint outline of what the company will look like when it comes through the other end of the tunnel.

According to a report to the Supreme Court of British Columbia filed by the court-appointed monitor last week, a total of eight establishments owned by Donnelly Group — which previously rebranded as the Freehouse Collective — are in the process of being sold.

Those eight establishments — seven in Vancouver and one in Toronto — have all been deemed "unprofitable" and "non-core" to Donnelly Group's business. They are:

  1. Cinema Public House, at 901 Granville Street;
  2. Three Brits Public House, at 1780 Davis Street;
  3. Brass Fish Tavern, at 385 Burrard Street;
  4. Hello Goodbye, at 1120 Hamilton Street;
  5. Granville Room, at 957 Granville Street;
  6. Butcher & Bullock Public House, at 911 W Pender Street;
  7. Bomber Brewing, at 1488 Adanac Street; and
  8. Death & Taxes Free House, at 1154 Queen Street W (Toronto).

According to the monitor, a buyer has already been secured for the Cinema Public House, which the monitor notes has been operated at a loss over the last two years. The purchase and sale agreement was reached on November 1 with 1442029 BC Ltd. for $580,000. The court has not officially approved the sale, but the completion date and possession date are planned for February 21 and February 22, respectively. Following deductions for commissions and other fees, the net proceeds from the sale of the Cinema Public House are expected to be $432,500.

The monitor provided few details about the buyer, but testimony from a Property Negotiations Supervisor with the City of Vancouver, Carvan Sung, identified Amrinderveer Chahal and Apury Yogeshkumar Modi as the directors of 1442029 BC Ltd., which was incorporated in late September. Sung's belief is that both Chahal and Modi are new to British Columbia and do not have the requisite experience to manage the Cinema Public House. "Both directors' restaurant experience is from working at Subway and from what appears to be a small, unlicenced restaurant, Bombay Street Tadka [in Edmonton]," Sung said.

In response to these concerns, the monitor says, a condition of the sale is that Freehouse Collective would provide training — for six weeks and a total of 220 hours — to the new owners in exchange for $75,000, to be included in the purchase price. It's unclear if this will satisfy the City of Vancouver, who cited numerous other reasons why they were opposed to the sale to 1442029 BC Ltd., but opposition from the City would not overrule the court.

The City of Vancouver owns the land and, thus, the sale requires the lease reassigned to the purchaser. The lease has nine years remaining, with monthly lease payments starting at around $30,000 and escalating over the years.

The exterior (left) and interior (right) of the Cinema Public House at 901 Granville Street in Vancouver.The Cinema Public House at 901 Granville Street in Vancouver.(Freehouse Collective)

Regarding the remaining establishments to be sold, the monitor says that pending sale agreements have been secured for the Three Brits Public House, Brass Fish Tavern, Hello Goodbye, and Granville Room. Details regarding those pending sale agreements were not provided.

The remaining three businesses — the Butcher & Bullock Public House, Bomber Brewing, and Death & Taxes Free House (in Toronto) — have been listed for sale but have yet to find a buyer.

If all eight of the aforementioned businesses are sold, Donnelly Group would be left with the following businesses, which they either own or hold a controlling interest in, according to records they submitted last year:

  1. Ballyhoo Public House, at 888 Burrard Street;
  2. Clough Club, at 212 Abbott Street;
  3. Sing Sing Beer Bar, at 2718 Main Street;
  4. Stock Room, at 1144 Homer Street;
  5. Isabelle's, at 1141 Hamilton Street;
  6. Lamplighter, at 92 Water Street;
  7. Belfast Love, at 548 King Street W (Toronto); and
  8. Walrus Pub and Beer Hall, at 187 Bay Street (Toronto).

All of the businesses are owned or held with a controlling interest by Donnelly Public Houses Inc., which is 100% owned by Donnelly Holdings Ltd., which has Jeffrey Donnelly as its sole shareholder. Outside of the hospitality realm, Donnelly Group also owns a majority interest in Barber & Co., which owns and operates three barber shops and a barber products company, as well as a cleaning business called Standard Cleaning Co Ltd.

In its petition to the court seeking creditor protection, Donnelly Group said its businesses were greatly affected by the COVID-19 pandemic and was only able to see dampened improvement afterwards as a result of labour shortages, increased minimum wage, and various other factors. They also cited negative impacts from remote work, as many of their establishments are located in downtown Vancouver.

Donnelly Group is continuing to work with the monitor and potential lenders to implement its plan to exit creditor protection.