SKN | BMO Places Trinity Auto Group Into CCAA as $85 Million Debt Crisis Deepens

• BMO has placed Trinity Auto Group into CCAA proceedings after demanding approximately $85 million in outstanding debt, following severe liquidity pressure and significant inventory-control issues.
• Independent reviews identified 264 vehicles sold and delivered without repayment of related BMO advances, representing approximately $13 million of gross sold-in-violation exposure.
• The restructuring is intended to preserve dealership and franchise value while BMO seeks court approval for a formal sale process and provides debtor-in-possession financing.

BMO has placed Trinity Auto Group into proceedings under Canada’s Companies’ Creditors Arrangement Act after the automotive group accumulated approximately $85 million in obligations and experienced increasingly severe liquidity and inventory problems. The case highlights the credit risks that can emerge when rapid dealership expansion, floorplan financing, aged inventory and property-related debt converge within a highly leveraged operating structure.

Trinity operates four franchised dealerships under Stellantis, Mitsubishi, Nissan and Kia banners across Mississauga, Oakville and Stratford, alongside used-car dealerships and other automotive businesses. The group also operates North Star Collision in Brampton, MetroFleet Car & Truck Rentals, towing operations and several automotive and commercial real estate properties.

Rapid Expansion Created a More Complex Credit Profile

Trinity’s expansion accelerated considerably after its origins as an automotive service centre established by James Boban in 2013. The group entered used-car retailing in 2020, added Oakville Mitsubishi in 2021, Stratford Kia and Stratford Nissan in 2022, a Brampton commercial plaza in 2023 and Mississauga Chrysler in 2024. The Mississauga Chrysler property was subsequently acquired in 2025.

That expansion increased the group’s operating footprint but also significantly increased its financing requirements.

According to BMO, the acquisition of Mississauga Chrysler and its related real estate introduced substantial goodwill, mortgage and floorplan obligations while bringing significant aged inventory into the group. Slower inventory turnover then compounded the pressure through floorplan interest, curtailment payments, inventory losses and fixed debt-service requirements.

Self-funded vehicles also tied up additional liquidity, reducing the group’s ability to absorb operating pressures.

The debtors currently employ approximately 144 people, with another 18 independent contractors working within the towing operation.

Inventory Irregularities Became a Critical Credit Issue

The severity of Trinity’s liquidity problems became clearer through independent inventory reviews.

Steinberg Advisory Corp., which was retained by Trinity effective May 15, identified 46 sold-in-violation vehicles at Mississauga Chrysler during June 17 fieldwork. These vehicles represented approximately $3.17 million of floorplan financing. The review also identified a stolen vehicle financed for approximately $35,700, 77 instances of re-chatteling and 18 instances of re-aging.

BMO subsequently retained Goldhar & Associates / Ethos Advisory on June 22 to conduct an independent review.

Full dealership inventory counts conducted on July 2 and 3 identified 264 vehicles that had been sold and delivered without repayment of the associated BMO advances. The resulting gross sold-in-violation exposure was approximately $13 million.

By July 16, the new-vehicle floorplan balance had reached approximately $43.5 million, exceeding the group’s authorized $35 million limit by roughly $8.5 million.

For a lender, this type of exposure is particularly significant because floorplan financing depends on the controlled movement of inventory and the repayment of advances when financed vehicles are sold. When vehicles leave the dealership without the corresponding financing being repaid, collateral protection can deteriorate rapidly.

Refinancing Efforts Failed to Resolve the Liquidity Pressure

The group’s financial position had already prompted discussions around a potential refinancing with TD Bank.

However, that potential transaction delayed BMO’s review of the business before ultimately falling away in April 2026. Without a successful refinancing, Trinity remained exposed to its existing floorplan, mortgage and other debt obligations while inventory turnover and liquidity continued to deteriorate.

BMO says management subsequently failed to provide the comprehensive funded plan requested by the lender to cure the sold-in-violation exposure, reduce inventory and stabilize liquidity.

The lender also identified reporting defaults and an unauthorized subordinate $2.5 million charge registered against the group’s property at 222 Advance Boulevard.

BMO Moves From Restructuring Discussions to Enforcement

On July 27, BMO demanded repayment of approximately $81 million under the principal credit agreement and approximately $4.2 million under separate financing associated with the Advance Boulevard property.

The lender also delivered notices of intention to enforce its security.

The situation was further complicated when the Canada Revenue Agency served BMO with a requirement to pay relating to approximately $214,000 of outstanding corporate income taxes owed by Oakville Mitsubishi. The requirement resulted in that company’s bank account being frozen.

The combination of inventory deficiencies, excess floorplan exposure, liquidity constraints, reporting defaults and tax obligations ultimately pushed the relationship beyond ordinary restructuring discussions.

CCAA Proceedings Aim to Preserve Enterprise Value

The CCAA proceeding is designed primarily to preserve the value of Trinity’s dealerships, franchises and other assets while potential buyers are identified.

BMO was already aware of preliminary transaction activity involving Stratford Nissan, Stratford Kia and the Commercial Plaza before the filing. The lender intends to ask the Court at the August 17 comeback hearing to approve a formal sale process as well as the engagement of a real estate broker and sales agent.

This approach is significant from a creditor perspective because an orderly sale process may provide greater recovery value than an immediate enforcement and liquidation of individual assets.

Rather than simply accelerating asset realization, the CCAA framework provides an opportunity to stabilize the operating businesses while their franchise relationships, dealership assets, real estate and other components are evaluated for potential sale.

BMO Provides DIP Financing to Support the Restructuring

BMO is also providing debtor-in-possession financing to Trinity.

The DIP facility is intended to provide the liquidity necessary to operate the businesses during the restructuring process and preserve value while the court-supervised sale process develops.

For BMO, the objective extends beyond recovering outstanding debt. Maintaining the operating businesses can protect franchise value, customer relationships, inventory value and real estate economics that could otherwise deteriorate during a disorderly shutdown.

The case therefore illustrates an important distinction in commercial banking: a distressed borrower does not necessarily represent a simple liquidation exercise. Where the underlying operating assets retain value, a lender may have an economic interest in financing the restructuring long enough to maximize recovery.

What the Trinity Case Signals for Commercial Banking Risk

The Trinity situation demonstrates how quickly expansion can change the risk profile of an automotive borrower.

Dealership acquisitions can increase revenue and market presence, but they also introduce substantial working-capital requirements, floorplan exposure, real estate obligations and inventory-management demands. When inventory begins moving more slowly, financing costs rise and additional cash becomes trapped within the operating cycle.

For lenders, the critical issue is therefore not simply the amount of debt outstanding. The quality and control of the underlying collateral, the reliability of financial reporting and the borrower’s ability to maintain sufficient liquidity become equally important.

The approximately $13 million of identified sold-in-violation exposure is particularly relevant because it indicates that the lender’s expected collateral position had become materially disconnected from the financed inventory.

Closing Insights

BMO’s decision to place Trinity Auto Group into CCAA proceedings reflects the culmination of several interconnected pressures rather than a single deterioration event. Rapid expansion increased the group’s financing requirements, while aged inventory, floorplan obligations and liquidity constraints weakened its ability to service those commitments. The subsequent discovery of approximately $13 million in sold-in-violation exposure materially increased the lender’s risk and accelerated the transition toward enforcement and restructuring.

The immediate priority is now preservation of enterprise value. The proposed sale process, supported by BMO’s DIP financing, gives the dealerships and related assets an opportunity to continue operating while potential buyers are assessed. For commercial lenders, the case reinforces the importance of continuous collateral monitoring, disciplined floorplan controls and early intervention when growth begins to outpace liquidity capacity.

For a confidential discussion regarding retail banking strategy, insurance distribution models, customer loyalty ecosystems, digital financial services, or cross-border financial innovation opportunities, contact our senior advisory team.