NexInnovations has shut its doors for business today.
According to sources, NexInnovations employees have been instructed to stay home today and return computer equipment tomorrow.
Just over a year after it first filed for creditor protection, CDN has learned NexInnovations Inc., one of Canada’s largest solutions providers, has once again run into financial difficulty.
A spokesperson for NexInnovations could not be reached for comment. However, TechData Canada has confirmed that according to public documents NexInnovations has again filed for protection from its creditors under the Companies’ Creditors Arrangement Act (CCAA).
NexInnovations’ major creditors include Tech Data, Wachovia Capital Finance Corp. and IBM Canada Ltd.
Representatives for TechData Canada declined to comment on the specifics of the NexInnovations case, instead releasing a general statement reaffirming the distributor’s support for the channel.
“Our resellers operate in an extremely competitive marketplace, and we are committed to maintaining our role as an unbiased supplier dedicated to help them achieve their business goals,” said TechData in a statement.
“Tech Data maintains its commitment to the channel and will continue its business relationships and operations with the utmost in ethics, integrity and respect for all our customers, large and small. To comment on specific customer performance is against Tech Data policy.”
As one of Canada’s largest solutions providers, Mississauga, Ont.-based NexInnovations was one of CDN’s Top 100 Solution Providers, and according to that list, in 2005 the company reported revenues of between $500 and $550 million.
It had earlier filed for and was granted creditor protection in August 2006 for a 30-day period, to allow the company time to restructure, citing financial difficulties. At that time Hubert Kelly, NexInnovations’ president and CEO, told CDN the company’s limitations on working capital were caused by average price points dropping by 15 to 20 per cent. According to court documents the company was more than $72 million in debt at that time.
“The decision to do a CCAA was difficult and we explored and exhausted every option for several months. If you asked me about this approach a couple of weeks ago I would tell you it would not be the course of action,” Kelly said at the time.
With the support of its creditors, Kelly had indicated he was hopeful the company would be able to return to normal operations, and emerge from creditor protection within 30 to 90 days.
At press time it’s unknown what led to the most recent creditor protection filing by NexInnovations.