Engagements

Pure Global Cannabis Inc.

Receivership Proceeding

On May 1,2020, by Order (the “Appointing Receiver Order”) of the Ontario Superior Court of Justice (Commercial List) (the “Court”), A. Farber & Partners Inc. (“Farber”) was appointed as receiver and manager (the “Receiver”), pursuant to section 243(1) of the Bankruptcy and Insolvency Act, R.S.C. 1985, c. B-3, as amended (the “BIA”) and section 101 of the Courts of Justice Act, R.S.O. 1990, c. C.43, as amended, without security, of certain of the assets, undertakings and properties of Pure Global Cannabis Inc., Puresinse Inc., 237A Advance Inc., 237B Advance Inc., SPRQ Health Group and The Great Canadian Hemp Company, Ltd. (defined as the “Debtors” or “Pure Global Group”) acquired for, or used in relation to a business carried on by the Debtors, including all proceeds thereof, but not the Excluded Assets or Excluded Undertakings (collectively, the “Property”).

On March 19, 2020 the Pure Global Group sought and obtained an Order from the Ontario Superior Court of Justice (Commercial List) granting relief under the Companies’ Creditors Arrangement Act (the “CCAA”). Ernst & Young Inc. was appointed as Monitor of the Debtors during these CCAA proceedings (“EY” or the “Monitor”).

The CCAA process is continuing at this time. Pursuant to the Amended and Restated Initial Order in the CCAA Proceeding dated April 3, 2020, Pure Global was required to arrange for the orderly, expeditious and lawful disposition or destruction of its cannabis or cannabis products in compliance with applicable law. That process is to continue and the CCAA Proceeding remains in place until further Order of the Court.   The Pure Global Group CCAA case web site can be viewed at:https://documentcentre.eycan.com/Pages/Main.aspx?SID=2489

The Appointing Receivership Order attached below.

On October 13, 2020 the Receiver will be seeking an Order for the following relief:

1. An Order (the “Administration Order”), substantially in the form attached at Tab 3 of this Motion Record, among other things:

  • terminating the CCAA proceedings and discharging Ernst & Young Inc., in its capacity as monitor of the Respondents (the “Monitor”);
  • terminating the CCAA Charges (as defined in the Initial CCAA Order) once all amounts owing and secured by the CCAA Charges have been paid in full;
  • directing Health Canada to revoke the Cannabis License within ten days upon written notice by the Receiver (as such date may be further extended by the Receiver in writing);
  • approving the Monitor’s activities as described in the First Report of the Monitor dated April 1, 2020, the Second Report of the Monitor dated April 21, 2020 and Third Report of the Monitor, to be filed, 2020 (the “Third Monitor’s Report”);
  • approving the fees of the Monitor and its counsel, as described in the Third Monitor’s Report;
  • approving the Receiver’s interim receipts and disbursements (the “Interim R&D”), for the period between May 1, 2020 to September 30, 2020, as described in the First Report; and,
  • approving the fees and disbursements of the Receiver and its counsel, Thornton Grout Finnigan LLP, and the Receiver’s activities as described in the First Report.

2. An Order (the “Approval and Vesting Order”), substantially in the form attached at Tab 4 of this Motion Record, among other things:

  • approving the asset purchase agreement dated September 8, 2020 (the “Asset Purchase Agreement”) between the Receiver and 2423454 Ontario Inc. (the “Purchaser”) approving the sale of the property at 237A Advance Blvd Brampton (“237A”);
  • vesting the 237A Property in the Purchaser in accordance with the Asset Purchase Agreement;
  • authorizing the distribution of certain of the sale proceeds to 2056707 Ontario Inc. in satisfaction of its secured claim against the 237A Property, after payment of the 237A Priority Payables;
  • authorizing the distribution of certain of the sale proceeds to the DIP Lender, the Monitor, its counsel, and the Respondents’ counsel for amounts secured by the DIP Charge and the Administration Charge, respectively, plus the fees of the Monitor and its counsel incurred after the date of the Receivership Order; and
  • sealing Confidential Appendices “1”, “2”, “3” and “4”.

The full particulars regarding this requested relief is set out below in the Motion Record dated October 6, 2020 and the First Report of the Receiver.

The requested relief was granted and the Approval and Vesting Order dated October 13, 2020 (among other matters approving the sale of 237A Advance Blvd), the Administration Order dated October 13, 2020 and Endorsement of Justice Hainey of the same date are posted below.

JANUARY 7, 2021 MOTION

The Receiver has scheduled a motion to be heard on January 7, 2021 with the purpose of that hearing set out below and further detailed particulars set out in its Second Report dated December 24, 2020 (the “Second Report”). Among other matters the Receiver is seeking the following relief:

    • an Order (the “Approval and Vesting Order”), inter alia:
      • approving the transactions (the “Transactions”) entered into pursuant to the asset purchase agreement dated November 26, 2020 (the “APA”) between the Receiver and TS Pharmaceutical Ltd. (the “Purchaser”) whereby the Purchaser will purchase the 237B Property and substantially all of the equipment of PureSinse (the “PureSinse Assets”) (the “Asset Transaction”) and the share purchase agreement dated December 23, 2020 (the “SPA”) between the Receiver and the Purchaser, whereby the Purchaser will purchase all of the issued and outstanding common shares of PureSinse, which are owned by Pure Global (the “Share Transaction”);
      • authorizing the Receiver to take all steps necessary to complete the Transactions;
      • vesting in the Purchaser all right, title and interest in and to the assets purchased in respect of the Asset Transaction upon closing of the Asset Transaction;
      • vesting in the Purchaser all right, title and interest in and to all outstanding common shares of PureSinse (the “Shares”) upon closing of the Share Transaction;
      • adding a corporation to be incorporated (“ResidualCo”) prior to the closing of the Share Transaction as a debtor company to these receivership proceedings in order to effectuate the Share Transaction, and amending the style of cause of these proceedings to reflect ResidualCo as a Respondent thereto;
      • removing PureSinse as a Respondent to these proceedings, and amending the style of cause in these proceedings accordingly, upon closing of the Share Transaction;
      • channeling all of PureSinse’s right, title and interest in and to the Excluded Assets, the Excluded Contracts and the Excluded Liabilities (each as defined in the SPA) to ResidualCo;
      • authorizing the Receiver to make the following distributions from the sale proceeds arising from the sale of the 237B Property (collectively, the “237B Priority Payables”):
        • first, to pay the closing costs associated with the Asset Transaction;
        • second, $500,000 (plus applicable interest and costs) to the DIP Lender in respect of the portion of the DIP Lender’s Charge applicable to the 237B Property;
        • third, in repayment of the 237B Fees and the amount of the General Fees (each term as defined below) allocated to the 237B Property;
        • fourth, in repayment of the Receiver’s Borrowings of $500,000 (plus interest and costs); and
        • fifth, to Kozo in satisfaction of their secured claims against the 237B Property up to the maximum amount of $2,250,000, plus interest and costs, for an aggregate amount estimated to be approximately $2,588,022;
      • sealing Confidential Appendices 1, 2 and 3;
      • approving the Receiver’s interim receipts and disbursements (the “Interim R&D”) for the period from May 1, 2020 to November 30, 2020, as described in this Second Report; and
      • approving the activities and fees and disbursements of the Receiver and its counsel, Thornton Grout Finnigan LLP, as described in this Second Report;
    • an Order (the “Claims Process Order”) approving the proposed claims procedure to identify and determine the claims of certain creditors against 237A and 237B.

Please see the detailed Motion Record and Second Court Report (without appendices) set out below.

The requested relief was granted and the Approval and Vesting Order dated January 7, 2021, the Claim Process Order dated January 7, 2021  and Endorsement of Justice Hainey of the same date are posted below.

JANUARY 25, 2021 MOTION

TS Pharmaceutical Ltd. (the “Purchaser”) scheduled a motion to be heard on January 25, 2021. The Receiver filed its Third Report dated January 22, 2021 (the “Third Report”), among other things, to:

  • respond to the motion of the Purchaser returnable on January 25, 2021 (for which no Notice of Motion or draft order was ever provided) and the Affidavit of Saraubh Singhal sworn January 22, 2021 (the “Singhal Affidavit”) in connection therewith;
  • provide evidence to the court in relation to the disputed matters outlined herein;
  • seek the Court’s endorsement directing the Purchaser to close the asset transaction contemplated by the APA forthwith and in any case, by no later than February 10, 2021; and
  • in the event that the Purchaser fails to close on or before February 10, 2021, schedule an immediate motion for a declaration that the Purchaser has forfeited the Deposit pursuant to the terms of the asset purchase agreement dated November 26, 2020.

The Third Report of the Receiver is posted below.

Claims Process for 237A Advance Inc., and 237B Advance Inc.

On January 7, 2020, by Court Order (the “Claims Process Order”), the Court authorized the Receiver to implement a claims process (“Claims Process”) for two legal entities namely 237A Advance Inc. (“237A”)., or 237B Advance Inc. (“237B”). These were special purpose entities set up to hold two properties, 237A Advance Boulevard, Brampton and 237A Advance Boulevard, Brampton respectively.

If you believe you are a creditor of 237A or 237B please continue reading this notice and the below referenced information. If you are a creditor of any of the other Pure Global entities listed above, this notice and claims process does not apply to you.

All creditors of 237A and 237B are required to submit a Proof of Claim to A. Farber & Partners Inc., on or before 5:00 p.m. February 8, 2021 (the “Claims Bar Date”).

CLAIMS WHICH ARE NOT RECEIVED BY THE CLAIMS BAR DATE WILL BE BARRED AND EXTINGUISHED FOREVER.

Attached below are the following:

  • A Notice to Claims
  • Proof of Claim form
  • And various other forms that maybe required
  • A copy of the Claims Process Order

If you have any other queries regarding this Claims Process please contact the Receiver by telephone at 416-496-3764 or by email to James Sacoransky at jsacoransky@farbergroup.com or Angela Liu at 437-317-6056 or aliu@farbergroup.com.

Sale Process

The Receiver is offering the Debtors’ assets and properties for sale.  Included in the sale are:

  • Land and buildings located at:
  • 237A Advance Blvd, Brampton, ON
  • 237B Advance Blvd, Brampton, ON
  • Cannabis production and processing equipment

Please note that an agreement of purchase has been entered into for 237A which is subject to Court Approval on October 13, 2020.

For the remaining property and assets, interested parties are invited to contact the Receiver’s listing agent:

Avison Young Commercial Real Estate (Ontario) Inc.

Kelly J. Avison, AACI
Broker
Principal, Capital Markets Group
kelly.avison@avisonyoung.com
D      416.673.4030
T       416.955.0000
F       416.955.0724
avisonyoung.com

APRIL 19, 2021 MOTION

The Receiver has scheduled a motion to be heard on April 19, 2021 with the purpose of that hearing set out below. Among other matters the Receiver is seeking the following relief:

  1. An Order:

(a)  ratifying the Receiver’s termination of (i) the asset purchase agreement dated November 26, 2020 (as amended, the “APA”) between the Receiver and TS Pharmaceutical Ltd. (the “Purchaser”) whereby the Purchaser agreed to purchase the real property located at 237B Advance Boulevard, Brampton, Ontario along with certain other assets of PureSinse Inc. (collectively, the “Property”), and (ii) the share purchase agreement dated December 23, 2020 (the “SPA” and together with the APA, the “Purchase  Agreements”)) between the Receiver and the Purchaser, whereby the Purchaser agreed to purchase all of the issued and outstanding common shares of PureSinse Inc.;

(b)  authorizing the Receiver to take all steps necessary to remarket the Property;

(c)  confirming the litigation schedule in respect of the Post-Closing Covenant Dispute Hearing; and

  1. Such further and other relief as this Court deems just.

Please see the detailed Motion Record and the Fourth Court Report set out below.

On April 29, 2021, The Receiver filed a Supplement to the Fourth Report is to respond to certain statements made in the Purchaser’s motion record dated April 15, 2021 and in particular, the Affidavit of Saurabh Singhal sworn April 15, 2021, an associate lawyer at the law firm that represents the Purchaser.

The Supplement to the Fourth Report can be found below.

On May 27, 2021, the Receiver filed the Fifth Report in response to the motion of TS Pharmaceutical Ltd. (the “Purchaser”) returnable on a date to be determined by the court.

The purpose of this Fifth Report is to:

(a)  respond to the Motion Record of the Purchaser, including the Affidavit of Saurabh Singhal sworn May 13, 2021, and the Affidavit of Mateen Rasul sworn April 12, 2021;

(b)  provide evidence to the Court in relation to the Post-Closing Covenant Dispute; and

(c)  seek the dismissal of the Post-Closing Covenant Dispute and an order for costs against the Purchaser.

The Fifth Report can be found below.

On June 28, 2021, the Court issued an order:

  • dismissing the motion made by TS Pharmacuetical Ltd. heard on June 28, 2021 in its entirety, with costs awarded to the Receiver;
  • ordering that costs be awarded to the Receiver on a partial indemnity basis up to and including June 11, 2021, and on a full indemnity basis from June 12, 2021 to June 28, 2021.

The order and reasons for decision can be found below.

OCTOBER 21, 2021 MOTION & COURT OF APPEAL MOTION SCHEDULED FOR MAY 5, 2022

T S Pharmaceuticals Ltd scheduled a motion to be heard on October 21, 2021 for:

  1. an Order extending the time to perfect the Appeal to November 5, 2021;
  2. an Order abridging the time for service, if necessary;
  3. the costs of this motion; and
  4. such other and further relief as this Honourable Court shall deem be just and appropriate.

A copy of the Motion record can be found below.

On October 21, 2021, the Court issued an order (the “Consent Order“):

  1. ordering the Appellant to take all required steps and actions to perfect the Notice of Appeal dated July 27, 2021 (filed with the Ontario Court of Appeal on August 5, 2021) (the “Appeal“) on or before November 5, 2021;
  2. ordering that if the Appellant does not perfect the Appeal on or before November 5, 2021, the Appeal shall be dismissed without costs and without further action by the Receiver, save and except if unforeseen circumstances that are beyond the control of the Appellant arise and prevent the perfection of the Appeal, in which case any further extension of time shall be subject to further Order or directions from the court; and
  3. ordering that no costs shall be awarded on this motion.

A copy of the Consent Order can be found below.

As a result of the Consent Order dated October 21,2021 an appeal is proceeding by T S Pharmaceuticals Ltd, (the “Appellant”), wherein the Appellant is appealing a decision of Justice S F Dunphy dated June 28, 2021, which dismissed a motion alleging the Receiver had breached covenants under an Asset Purchase Agreement it had entered into with the Appellant. Justice Dunphy also awarded costs against the Appellant in the amount of $105,000.

The Appellant’s Factum and related materials and the Receiver’s Factum in response to same are found below.

The Court of Appeal motion has been set down for May 5, 2022.

JANUARY 27, 2022 MOTION SCHEDULED FOR FEBRUARY 7, 2022

The Receiver has scheduled a motion to be heard on February 7, 2022 with the purpose of that hearing set out below. Among other matters the Receiver is seeking the following relief:

  1. An Order (the “Interim Distribution Order”), substantially in the form attached at Tab 3 of this Motion Record, among other things:

(a) approving the Related Party Claims (as defined below);

(b) approving a distribution to Cancor Debt Agency Inc., as collateral agent (the “Collateral Agent”) on behalf of the Debenture Holders;

(c) approving the Receiver’s statement of receipts and disbursements (the “R&D”) for the period from May 1, 2020 to December 31, 2021, as described in the Sixth Report of the Receiver dated January 27, 2022 (the “Sixth Report”);

(d) approving the Sixth Report and the activities and conduct of the Receiver described therein; and

(e) approving the fees and disbursements of the Receiver and its counsel, Thornton Grout Finnigan LLP (“TGF”), as described in the Sixth Report.

A copy of the Motion record and Sixth Report of the Receiver can be found below.

The requested relief was granted and a copy of the Interim Distribution Order dated February 7, 2022 can be found below.

Creditor Enquires

For enquires, please contact:

Paul Denton
T: 416.496.3773
E: pdenton@farbergroup.com

James Sacoransky
T: 416.496.3764
E: jsacoransky@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

Motion Materials

Court Orders & Endorsements

Receivers’ Report

Claim Process

Service List

TSXV Listing Status