Engagements

Muskoka Grown Limited

Status Updates

NOI

On May 5, 2020, Muskoka Grown Limited (the “Company”) filed a Notice of Intention to Make a Proposal (the “NOI”) under Section 50.4 of the Bankruptcy and Insolvency Act,¸ R.S.C 1985, c. B-3, as amended (the “BIA”) and A. Farber & Partners Inc. was appointed as trustee under the NOI (the “Proposal Trustee”).

The NOI filing provides for a stay of proceedings against the Company, pursuant to s. 69(1) of the BIA, subject to certain limitations, while the Company formulates a restructuring plan and attempts to develop a viable proposal for its creditors.

The Ontario Superior Court of Justice (Commercial List) (the “Court”) has issued several orders in respect of these NOI proceedings, which are posted below. Among other things, the Court has ordered that the time within which the Company is to make a proposal has been extended to November 4, 2020.

Sale and Investment Solicitation Process

The Court, pursuant to the Order of Justice Koehnen dated August 4, 2020, approved, among other things, a sale and investment solicitation process (the “SISP”), including the bidding procedures for the SISP (the “Bidding Procedures”) and a “stalking horse” asset purchase agreement (the “Stalking Horse APA”) as a public, opening bid in the SISP. Details on the SISP, Bidding Procedures and Stalking Horse APA are posted below.

Interested parties were able to obtain a non-disclosure agreement by contacting the Proposal Trustee. The deadline for bids was 3:00 p.m. (Toronto time) on September 15, 2020.

SISP Update

On October 2, 2020, Justice Koehnen issued two Orders:

  1. Approval and Vesting Order (the “AVO”): The AVO provides for, among other things, the Court’s approval of:
    a. the transaction contemplated by the Stalking Horse APA (the “Transaction”);
    b. the vesting of all purchased assets in the purchaser free and clear of all Encumbrances (as defined in the AVO) other than those permitted encumbrances outlined in the Stalking Horse APA;
    c. the preservation of the lien claim of 2089871 Ontario Limited, carrying on business as Eastview Construction, registered against title to the Company’s real property (the “Eastview Lien Claim”), to the extent that the Eastview Lien Claim has priority over the Zwingenberger Mortgage (as defined in the AVO) and which priority shall be determined at a later date;
    d. the change of the style of cause to the NOI proceedings after closing of the Transaction; and
    e. other relief as is necessary to facilitate the closing of the Transaction.
  2. Ancillary Order (the “Ancillary Order”): The Ancillary Order provides for, among other things, the Court’s approval of:
    a. the Second Amended and Restated DIP Term Sheet and corresponding maximum value of the DIP Lender’s Charge;
    b. the extension of the time within which the Company must file a proposal to November 4, 2020; and
    c. other relief related to the administration of the estate.

SISP and Creditor Enquiries

For SISP and creditor enquiries, please contact:

Geanina Schmidt
Associate | Restructuring
T: 416.496.3753
E: gschmidt@farbergroup.com

The case updates and court filed documents on this website are for information purposes only and you should consult your financial or legal adviser if you have any questions or concerns about your rights or obligations. Additional updates on the status of these proceedings may become available in the future.

Documents

Proposal Documents

Court Orders & Endorsements

Court Reports

Motion Materials

Sale Process

Service List