XS Cargo Limited Partnership and XS Cargo GP Inc.

Notice of Intention to Make a Proposal

Page last updated: November 21, 2014

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 July 30, 2014, XS Cargo Limited Partnership and XS Cargo GP Inc. (collectively “XS Cargo” or the “Companies”) each filed a Notice of Intention to Make a Proposal (“NOIs”) pursuant to Section 50.4(1) of the Bankruptcy and Insolvency Act (“BIA”) and PricewaterhouseCoopers Inc. (“PwC”) was named as the trustee under the NOIs (the “Trustee”).

As a result of the filing of the NOIs, all creditors are stayed from commencing or continuing any proceedings against XS Cargo until August 30, 2014 (the “Initial Stay”), subject to any extensions of the Initial Stay that the Court might grant upon application by the Companies.

Notice of the NOIs and the Trustee’s appointment were mailed to all known creditors of XS Cargo on July 31, 2014.

The purpose of the NOIs is to give XS Cargo the chance to conduct a sale, refinancing and/or investment solicitation process (the “SISP”). The Trustee is working with XS Cargo during the proposal period and will update this website as the proposal proceeding continues.

During the period of the NOIs, XS Cargo intends to continue to operate on a “business as usual” basis.


Status Update at November 21, 2014

On November 20, 2014, a meeting of creditors was held to consider and vote on approval of the Proposal filed by the Companies. The requisite majority of creditors required to approve the Proposal pursuant to the provisions of the BIA was obtained and the Proposal was approved by XS Cargo’s creditors. As a result, the Trustee will apply to the court for a hearing of the application for approval of the Proposal by the Court.

Status Update at November 11, 2014

On November 10, 2014, the Trustee mailed a package to all known creditors of XS Cargo containing information on the meeting of creditors (the “Meeting”) to consider and vote on XS Cargo’s Proposal. Further information relating to the Meeting and details on how to file a claim against XS Cargo can be found under the Claims Process tab.

On November 10, 2014, KarpReilly Capital Partners, L.P. filed a motion with the Court for an Order seeking to appoint PricewaterhouseCoopers Inc. as receiver of all the assets, undertakings and properties of XS Cargo. The motion will be heard on November 13, 2014.

Status Update at October 31, 2014

On October 30, 2014, XS Cargo filed a proposal date October 29, 2014 with the Trustee (the “Proposal”) pursuant to the provisions of the BIA.  It is the Trustee’s intention to contact all known creditors of XS Cargo in the coming days and to send to each known creditor a copy of the Proposal, a proof of claim form, a proxy form, and a voting letter along with information relating to the meeting of creditors expected to be held on November 20, 2014 to consider and vote on the Proposal.  At that time, a copy of the materials mailed to known creditors will be posted on this website.

Status Update at October 9, 2014

On October 7, 2014, the Court granted an order extending the time for the filing of a proposal by each of the Companies in accordance with section 50.4(9) of the BIA until October 31, 2014.

Status Update at October 7, 2014

On October 6, 2014, the Trustee filed its Fourth Report to provide the Court with:

  1. information regarding the Companies’ operations since the date of the Third Report, including the conduct of the liquidation sale pursuant to the Agency Agreement;
  2. information regarding the withdrawal of the Purchaser and the termination of the APA;
  3. a summary of the Trustee’s activities since the date of the Third Report; and
  4. the Trustee’s views on the relief sought by the Companies, as set out in the affidavit of Mr. Duncan Reith, sworn on October 3, 2014 for an extension of time to file proposals, under section 50.4(9) of the BIA.

Status Update at October 6, 2014

On October 7, 2014, the Companies will apply to the Court for an order extending the time period for each of the Companies to file a proposal in accordance with section 50.4 (9) of the BIA until October 31, 2014.

Status Update at September 29, 2014

The Companies have been advised by the Purchaser that it will not go forward with the APA and therefore, the assignment of contracts, namely leases, will not be required or sought. Accordingly, the Companies’ motion seeking an order authorizing the assignment of contracts scheduled for September 29, 2014 will no longer be necessary.

The Companies will continue to work with the agent under the Agency Agreement in order to complete the liquidation contemplated thereunder. The Applicants will also apply to the Court on October 7, 2014 to seek an extension of the stay of proceedings.

Status Update at September 19, 2014

On September 19, 2014 the Court issued an order:

  1. approving the transactions contemplated under an Agency Agreement entered into between the Companies and Tiger on September 15, 2014, as referred to in the Reith Affidavit, which agreement has been amended and restated on September 19, 2014 (as amended and restated, the “Agency Agreement”), as referred to in the Supplemental Affidavit of Duncan Reith sworn on September 19, 2014 (the “Supplemental Reith Affidavit”), as well as the granting of the Agent’s Charge (as defined in the order);
  2. approving the transactions contemplated under an APA entered into between the Companies and the Purchaser on September 15, 2014, as referred to in the Reith Affidavit;
  3. vesting in and to the Purchaser all of the Companies’ right, title and interest in and to the assets designated in the APA (collectively the “Purchased Assets”) upon closing of the APA;
  4. authorizing and directing the Companies, in accordance with the terms of the Agency Agreement, to make i) an interim distribution to CIBC of an amount equal to $5 million out of the portion of Guaranteed Amount (as defined in the Agency Agreement) payable by the Agent and ii) subsequent distribution(s) to CIBC for any amounts remaining owing to CIBC, out of the balance of the Guaranteed Amount payable by the Agent and/or of the Primary Account payable under the APA; and
  5. sealing the unredacted copies of the Agency Agreement, the APA and of the Companies’ revised cash-flow forecast, including the schedules thereto.
The part of the Company’s motion seeking an order authorizing the assignment of certain contracts will be heard on September 29, 2014 at 10:00 a.m.

 

Status Update at September 17, 2014

On September 17, 2014 the Trustee filed its Third Report to provide the Court with:

  1. information regarding the Companies’ operations since the date of the Trustee’s Second Report;
  2. a summary of the Trustee’s activities since the date of the Second Report;
  3. information regarding the outcome of the SISP;
  4. the Trustee’s views on the relief sought by the Companies, as set out in the affidavit of Mr. Duncan Reith, sworn on September 15, 2014 (the “Reith Affidavit”), including the Companies’ request for an order (the “Approval Order”):
    1. approving the transactions contemplated under an agency agreement (the “Agency Agreement”) entered into between XS Cargo and Tiger Capital Group, LLC (“Tiger”) on September 15, 2014;
    2. approving the transactions contemplated under an Asset Purchase Agreement (the “APA”) entered into between XS Cargo and 9014454 Canada Inc. (“Newco” or the “Purchaser”) on September 15, 2014;
    3. vesting in the Purchaser XS Cargo’s right, title and interest, if any, in and to the purchased assets described in the APA;
    4. assigning to the Purchaser various of the Companies’ agreements, as described in the APA; and
    5. sealing the unredacted Agency Agreement and the unredacted APA.

Status Update at September 16, 2014

On September 15, 2014 XS Cargo filed its motion materials for a motion to be heard on September 19, 2014 to seek an order:

  1. approving the transactions contemplated under an Agency Agreement entered into between the Companies and Tiger Capital Group, LLC (the “Agent”) on September 15, 2014, and granting a first ranking charge in favour of the Agent over the Applicants’ Merchandise, all Proceeds and all proceeds from the sale of FF&E (as defined in the Reith Affidavit);
  2. approving the transactions contemplated under the Asset Purchase Agreement (“APA”) entered into between the Companies and 9014454 Canada Inc. (the “Purchaser”) on September 15, 2014;
  3. authorizing the Applicants to proceed with an interim distribution to the Canadian Imperial Bank of Commerce (“CIBC”) out of the Initial Guaranty Payment payable under the Agency Agreement, as well as a final distribution, if necessary, to CIBC, upon payment of the balance of the Guaranteed Amount payable under the Agency Agreement;
  4. vesting in the Purchaser the Companies’ right, title and interest in and to the assets designated in the APA upon delivery and filing of a certificate by the Trustee certifying that all closing conditions to the APA have been met;
  5. assigning to the Purchaser, upon closing of the APA, the rights and obligations of the Applicants under the contracts which the Purchaser may elect to assume in accordance with the APA, including the lease agreements related to the Stores which the Purchaser may decide to continue to operate in accordance with the APA; and
  6. sealing the unredacted copies of the Agency Agreement and the APA including the schedules thereto.

The part of the Company’s motion seeking an order authorizing the assignment of certain contracts will not be heard on September 16, 2014. The date for the hearing of this part of the motion will be posted when available.

Status Update at September 2, 2014

On August 29, 2014, the Court issued an order extending the time for the filing of a proposal in accordance with section 50.4(9) of the BIA until October 10, 2014 and sealing the Confidential Bid Summary and the Backstop Cashflow until further order from the Court.

Status Update at August 28, 2014

On August 27, 2014, the Trustee filed its Second Report to provide the Court with;

  1. information regarding the XS Cargo’s operations since the filing date of the NOI (the “Filing Date”);
  2. a summary of the Proposal Trustee’s activities since the Filing Date, including a brief summary of XS Cargo’s and the Proposal Trustee’s dealings with a key service provider, Panalpina Inc. (“Panalpina”);
  3. an update on the proposed sale and investment solicitation process (“SISP”) and the outcome of milestones achieved to date;
  4. the Proposal Trustee’s views on the relief sought by the Company including XS Cargo’s request for an extension of time to file proposals, under section 50.4(9) of the BIA;
    and
  5. to seek an order of the Court sealing the Confidential Bid Summary and the Baseline Cashflow as described in the Second Report.

Status Update at August 26, 2014

XS Cargo filed a motion with the Court for an order extending the period of time to file a proposal under the BIA until October 10, 2014. The motion will be heard on August 29, 2014.

Status Update at August 7, 2014

On August 6, 2014, the Court approved an order in the form submitted in the motion filed on August 1, 2014, as summarized below.

Status Update at August 1, 2014

On August 1, 2014 the XS Cargo filed its motion materials for a motion to be heard on August 6, 2014 to seek an order:

  1. ratifying the execution of an agreement (the “Accommodation Agreement”) entered into on July 30, 2014 between XS Cargo,  XSC Canada Holding Inc. and the Canadian Imperial Bank of Commerce (“CIBC”);
  2. approving a court supervised sale, refinancing and investment solicitation process (“SISP”), set out in the Accommodation Agreement;
  3. providing for the continuation of all cash management and banking arrangements presently in existence between XS LP and CIBC;
  4. approving an administrative/procedural consolidation of the proposal proceedings of XSLP and XS GP;
  5. granting  a first charge on all XS Cargo’s property (the “Property”), in the amount of $260,000, in favour of the Proposal Trustee, its legal counsel and counsel to XS Cargo (the “Administration Charge”);
  6. granting a second priority charge on the Property, in the amount of $1,571,000 in favour of the directors and officers of XS Cargo (the “D&O Charge”);
  7. ratifying the Key Employee Retention Plan (the “KERP”) and granting a third priority charge on the Property, in the amount of $380,000, in favour of the key employees of XS Cargo (the “KERP Charge”); and
  8. sealing XS Cargo’s financial statements and the unredacted version of the KERP.

Also on August 1, 2014 the Proposal Trustee filed its first report to the Court (the “First Report”) to provide the Court with:

  1. background information about XS Cargo;
  2. to summarize the Accommodation Agreement; and
  3. to provide the Court with the Proposal Trustee’s views on certain relief being sought by XS Cargo (as indicated above) in the motion to be heard on August 6, 2014.

This Web site will be updated as information becomes available.