PRACS Institute Canada B.C. Ltd. (“PRACS”)

In Receivership

Page last updated: July 22, 2013

This page is for information purposes only and you should consult your professional adviser if you have any questions or are uncertain as to your rights or obligations.

On March 22, 2013, on the application of Freeport Financial LLC (“Freeport”), an Order was granted by the Ontario Superior Court of Justice (Commercial List) (the “Court”), 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, that appointed PricewaterhouseCoopers Inc. (“PwC”) as receiver (the "Receiver") of all of the assets, undertakings and property (the “Property”) of PRACS Institute Canada B.C. Ltd. (“PRACS” or the “Company”).

In accordance with the provisions of the BIA, a Notice and Statement of the Receiver was mailed to all known creditors of the Companies on April 2, 2013.


Status of File as of July 19, 2013

On July 18, 2013 and July 19, 2013, the Court granted orders, which among other things:

  1. approved the Second Report and Third Report of the Receiver and the activities of the Receiver as set out therein, including the Receiver’s Statement of Receipts and Disbursements;
  2. approving the accounts of the Receiver up to May 31, 2013;
  3. approving the accounts of the Receiver’s legal counsel to June 14, 2013;
  4. authorized and directing the Receiver to distribute $2,735,089.79 to Freeport (the “Interim Distribution”) from the funds held by the Receiver;
  5. authorized and directing the Receiver to pay the Reserve Obligations (including the Remaining Fees and Disbursements, Canada Revenue Agency’s Deemed Trust Claim and the Trustee’s Fees, all as defined in the Third Report), from the available cash on hand following payment of the Interim Distribution and any cash receipts collected after the date of the Interim Distribution(the “Reserve”) and to distribute any funds remaining in the Reserve after payment of the Reserve Obligations to Freeport, up to the amount of the Total Indebtedness owed to Freeport; and
  6. discharged the Receiver, subject to the Receiver completing its administration of the receivership proceedings and filing a Discharge Certificate with the Court.

Status of File as at June 26, 2013

The motion to be heard on June 26, 2013, has been adjourned to July 18, 2013.

Status of File as at June 21, 2013

On June 19, 2013, the Receiver filed its Third Report to the Court to provide the Court with information with respect to:

  1. the Closing of the Sale Transaction;
  2. the activities of the Receiver since the date of the First Report;
  3. the Receiver’s Statement of Receipts and Disbursements from the period from March 22, 2013 to June 18, 2013; and
  4. the review by the Receiver’s legal counsel of the validity and enforceability of the security held by Freeport in respect of the Property.

and to seek an order of the Court;

  1. approving the Second Report and Third Report of the Receiver and the activities of the Receiver as set out therein, including the Receiver’s Statement of Receipts and Disbursements;
  2. approving the accounts of the Receiver up to May 31, 2013;
  3. approving the accounts of the Receiver’s legal counsel to June 14, 2013;
  4. authorizing the Receiver to pay the unpaid fees and disbursements of the Receiver and its legal counsel;
  5. authorizing and directing the Receiver to distribute $2,735,089.79 to Freeport (the “Interim Distribution”) from the funds held by the Receiver;
  6. authorizing and directing the Receiver to pay the Reserve Obligations (including the Remaining Fees and Disbursements, Canada Revenue Agency’s Deemed Trust Claim and the Trustee’s Fees, all as defined in the Third Report), from the available cash on hand following payment of the Interim Distribution and any cash receipts collected after the date of the Interim Distribution(the “Reserve”) and to distribute any funds remaining in the Reserve after payment of the Reserve Obligations to Freeport, up to the amount of the Total Indebtedness owed to Freeport; and
  7. discharging the Receiver, subject to the Receiver completing its administration of the receivership proceedings and filing a Discharge Certificate with the Court.

A motion will be heard on June 26, 2013

Status of File as at May 6, 2013

On Friday, May 3, 2013, the Sale Transaction for the sale of the Clinical Assets and Laboratory Assets of PRACS (as defined in the Receiver’s First Report) closed.

Status of File as at May 1, 2013

On May 1, 2013, the Court issued an order approving the Sale Transaction and Third Party Property Protocol (as detailed in the First Report), vesting the Company’s right, title and interest in the Clinic Assets in 2368350 Ontario Inc. (“Inflamax”) and the Company’s right title and interest in the Laboratory Assets in 1893929 Ontario Inc. (“CML”), sealing the bid summary and approving the activities of the Receiver as detailed in the First Report.

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Status of File as at April 25, 2013

On April 25, 2013, the Receiver filed its First Report to the Court to provide the Court with information with respect to:

  1. the Receiver’s activities since the Date of Appointment;
  2. notices provided to pharmaceutical and biotechnology companies (“Sponsors”) that have engaged PRACS Canada or its predecessor entities to conduct Clinical Trials or Analyses;
  3. the status of ongoing Clinical Trials being undertaken by PRACS Canada on behalf of Sponsors at the Date of Appointment;
  4. the Receiver’s receipts and disbursements from the Date of Appointment to April 21, 2013;
  5. the marketing and sale process (the “Sales Process”) undertaken by the Receiver to effect a sale of the Company’s Property;
  6. the asset purchase agreement dated April 19, 2013 (the “APA”) entered into jointly by 2368350 Ontario Inc. (“Inflamax”), 1893929 Ontario Inc. (“CML”) and the Receiver with respect to the sale of Clinical Assets and the Laboratory Assets, both as defined in the First Report (the “Sale Transaction”); and
  7. the protocol regarding certain property in PRACS Canada’s possession or control that is owned by or otherwise belongs to Sponsors or Clinical Trial subjects (the “Third-Party Property Protocol”);

and to seek an order;

  1. approving the Sale Transaction;
  2. vesting the Company’s right, title and interest, if any, in and to the Clinic Assets in Inflamax free and clear of all encumbrances;
  3. vesting the Company’s right, title and interest, if any, in and to the Laboratory Assets in CML free and clear of all encumbrances;
  4. sealing the bid summary, attached to the First Report;
  5. sealing the unredacted APA containing the commercially sensitive terms of the APA; and
  6. approving the activities of the Receiver.

A motion will be heard on May 1, 2013.

Status of File at April 24, 2013

The Receiver has distributed a notice to sponsors advising them that the Receiver has entered into a sale agreement ("Sale Agreement") to sell PRACS right, title and interest in and to the Property to Purchasers as set out in the Sale Agreement. The Receiver and the Purchasers plan to attend Court on May 1, 2013 to seek approval of the Sale Agreement and the protocol set out in the APA in respect of the treatment of sponsor property in the possession of the Purchasers post closing. A copy of the Notice to Sponsors is available in the Notices section of the website.

Court materials in respect of the hearing scheduled for May 1, 2013, will be available shortly.


This Web site will be updated as information becomes available.

For more information, please contact: Michelle Pickett, Telephone: +1 416 815 5200, Fax: +1 416 814 3210 or via Email.