Flower One Holdings Inc.

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CCAA

Page last updated: January 12, 2023

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.

Status of file as at December 30, 2022

The Monitor has filed its Monitor’s Certificate with the Supreme Court of British Columbia and hereby confirms receipt of (i) the Purchase Price and any applicable Transfer Taxes payable to the Monitor by the Petitioners pursuant to the Canadian Restructuring Agreement, and (ii) each Conditions Certificate, confirming that the conditions of Canadian Restructuring Agreement have been satisfied.

In addition, the Monitor has filed its Monitor’s Plan Implementation Certificate with the Supreme Court of British Columbia and hereby confirms that the Plan has been fully implemented in accordance with the terms thereof.

The Effective Date of the Plan is December 30, 2022, as such the Monitor will send the required distributions to Affected Creditors in respect of their Proven Claims by January 13, 2023 (as per sections 4.4 and 4.5 of the Plan).

If any Affected Creditors’ distributions are returned as undeliverable or are not cashed, no further action will be taken unless the creditor notifies the Petitioners and the Monitor in writing with an updated current address by February 28, 2023 (as per section 4.6 of the Plan).

Status of file as at December 21, 2022

On December 21, 2022, the Court granted the Sanction and Vesting Order which, among other things:

Sanctions the Plan; and
Approves the extension of the Stay of Proceedings from January 16, 2023 until the date the Monitor is discharged.

The application materials have been posted under the Motion Materials tab and a copy of the granted Sanction and Vesting Order can be found in the Court Orders tab.

Status of file as at December 19, 2022

On December 19, 2022 at 2:00 p.m. Vancouver time, a meeting of Affected Creditors was convened to vote on the Plan (the “Creditor Meeting”). Prior to the Creditor Meeting, the Monitor received a number of votes by way of Proxy from Private Noteholder Claimants. In addition, the Public Debenture Trustee also provided the Monitor with its Proxy, on behalf of Public Noteholder Claimant Vote.

The final votes were cast during the Creditor Meeting, and the Monitor provided the final tabulation and confirmed that the Plan had been approved by the Required Majority.

The sanction hearing is scheduled to take place on December 21, 2022, during which the Petitioners will be seeking approval for:

The sanction of the Plan; and
An extension of the Stay of Proceedings until the date the Monitor is discharged.

The Monitor has posted its Third Report to the Court (which can be found under the Monitor’s Reports tab) which, inter alia, provides detail on the following:

The activities of the Petitioners and the Monitor since the Second Report;
An update on the Claims Process;
Details of the Creditor Meeting, which took place virtually on December 19, 2022 at 2.00pm (PST), and the results of the vote from the Affected Creditors; and
The sanction hearing, along with the Monitor’s comments with respect to the Petitioners’ application for the Sanction and Vesting Order.

Status of file as at November 25, 2022

On November 25, 2022, Flower One Holdings Inc., FO Labour Management Ltd. and Flower One Corp. (collectively the “Company” or “the Petitioners”) filed its Plan of Compromise and Arrangement (the “Plan”) with the Court. Subsequently, the Court granted the Meeting Order which authorizes the Petitioners to convene a meeting with its creditors (the “Meeting”) to vote on the Plan. The Meeting is scheduled for 2:00pm PST on December 19, 2022 (the “Meeting Date”).

The Monitor will chair the Meeting which will determine whether or not the Plan is approved. To vote on the Plan, creditors (other than Public Noteholder) must either i) attend the Meeting and submit a vote at the meeting or ii) submit a Non-Public Noteholder Proxy to the Monitor by 2:00pm (PST) on December 19, 2022. The Meeting will be held virtually and creditors wishing to attend must inform the Monitor by 9:00am (PST) on the December 19, 2022. Upon receipt of a request to attend the meeting, the Monitor will provide a link to the video call for the Meeting.

Public Noteholders must submit a Public Noteholder Voting Instruction Form to Odyssey Trust prior to 9:00 am on December 19, 2022 in order to vote.

On December 13, 2022 the Monitor will host a teleconference call at 11:00am Vancouver time for creditors in order to answer questions creditors may have regarding the Plan. Creditors who wish to join the teleconference call must email ca_flowerone@pwc.com or fax to 604-806-7806 (Attn: Andrew Brennand) before 9:00am (PST) on December 13, 2022. The Monitor will then provide conference call details to the creditor.

The following materials (collectively, the “Meeting Materials”) have been posted in the Meeting Materials tab of this website:

The Notice of Meeting;
The Plan;
The Monitor’s Second Report;
The Public Noteholder Voting Instruction Form;
The Non-public Noteholder Proxy; and,
The Meeting Order;

Public Noteholders shall receive these Meeting Materials from the Broadridge service either directly or from their brokerage firm. All other creditors shall receive these Meeting Materials by email from the Monitor.

The Plan will be approved if 50% in number of the Affected Creditors voting, representing at least 2⁄3 in value of the Affected Creditor claims, vote in favour of the Plan.

A high level summary of the Plan is described below:

Proven Claims held by Public Noteholder and General Unsecured Creditors will receive $0.10 on the dollar of their Proven Claim in the form of cash;
Proven Claims held by Private Noteholder Claimants will receive Private Debenture Notes to be issued by Cana Nevada in the amount of $0.10 on the dollar of their Proven Claim. The Private Debenture Notes will mature on June 30, 2024 when the principal and accrued interest of 5% compounded annually will become due.
The cash and Private Debenture Notes is being provided to the Petitioners (the Canadian entities in the Flower One Group) by Cana Nevada who in turn is receiving funds from the Plan Sponsor as part of a restructuring in the United States. The Petitioners shall be transferring any litigation claims it may have as well as their shares in Cana Nevada to Cana Nevada. As part of the US Restructuring, the Plan Sponsor shall become the sole shareholder of Cana Nevada.
Should the Plan be approved, the Petitioners shall file assignments into bankruptcy following the distributions being made to the creditors.
Existing Flower One Securities-holders (shareholders, owners of options, warrants or other equity rights) shall receive no consideration in respect of their securities or equity rights.

The Monitor has reviewed the Plan and recommends that the creditors vote in favour of the Plan. Absent approval of the Plan, the Petitioners will become bankrupt and there will be no recovery to the Affected Creditors. The Plan provides a recovery of $0.10 on the dollar of the Affected Creditors’ Claims and supports the Flower One Group’s objective of continuing its operations in Nevada.

Details of the Plan and the Monitor’s analysis are contained in the second Monitor’s report which is posted in the Monitor’s Report tab of this website.

Status of file as at November 22, 2022

The company has developed a plan (the “Plan of Compromise and Arrangement”) to present to creditors. A Court hearing scheduled for 9:00am (PST) on Friday November 25, 2022. At the hearing, the Petitioners will present the Plan and the Meeting Order to the Court. The Petitioners will request that the Court authorize them to hold a Creditors Meeting on December 19, 2022, at which the creditors will be required to vote on the Plan.

The application materials have been posted under the Motion Materials tab.

The Monitor has posted its Second Report to the Court (which can be found under the Monitor’s Report’s tab) which inter alia provides detail on the following:

The activities of the Monitor and Petitioners since the First Report;
The Petitioners’ cash flows to November 13, 2022;
An update on the Claims Process;
An update on Flower One Group’s restructuring efforts to date;
The Petitioners’ proposed plan of compromise, arrangement and reorganization (the “Plan”);
The Petitioners’ request for a meeting order (the “Meeting Order”) to provide the creditors with the opportunity to vote on the proposed Plan; and,
The Monitor’s comments and recommendations on the foregoing.

Status of file as at Oct 25, 2022

On October 25, 2022, the Court granted the Amended and Restated Initial Order (the "ARIO") which extended the Stay Period to January 16, 2022 and approved the Intercompany Charge. The Court also granted the Claims Process Order. Copies of both court orders can be found under the Court Orders tab.

In accordance with the Claims Process Order, the Petitioner, with assistance of the Monitor will be implementing the claims process. Copies of all relevant claims process documents have been posted to the Claims Process tab.

Pursuant to the Claims Process Order, the Petitioner will send a claims notice (the “Claims Notice”) to each known creditor of the Petitioner, which will set out the claim such creditor has against the Petitioner. If a creditor agrees with its claim as set out in the Claims Notice, no further action is required. Any creditor that (i) disputes the claim set forth in the Claims Notice; (ii) wishes to assert a claim against any director or officer of the Petitioner; (iii) wishes to assert a restructuring claim; or (iv) does not receive a Claims Notice but wishes to assert a claim against the Petitioner or any director or officer, must submit a proof of claim with the Monitor in accordance with the terms of the Claims Process Order. The Claims Bar Date is 4:00pm Pacific Time on November 14, 2022.

Status of file as at October 21, 2022

A Court hearing is scheduled for Tuesday October 25, 2022. At the hearing, Flower One Holdings Inc., FO Labour Management Ltd. And Flower One Corp. (“the Petitioners”) is seeking the Court’s approval for the following:

Extension of the stay of proceedings until January 16, 2023;
Approval of the proposed intercompany advances from the Petitioner’s operating subsidiaries to the Petitioners and corresponding charges in favour of those subsidiaries; and
Approval of the proposed claims process in accordance with the Claims Process Order.

The Petitioner’s application materials can be found under the Motion Materials tab. A summary of the hearing and any orders made by the Court will be posted to this website shortly after the hearing.

Status of file as at October 17, 2022

On October 17, 2022 (the "Filing Date"), Flower One Holdings Inc., FO Labour Management Ltd. and Flower One Corp. (collectively the “Company” or “the Petitioners”) sought and obtained an Initial Order of the Supreme Court of British Columbia (the “Court”) pursuant to the Companies’ Creditors Arrangement Act (the “CCAA”).

PricewaterhouseCoopers Inc. LIT (“PwC”) was appointed as the Monitor.

As a result of the CCAA filing, there is a stay of proceedings in place until October 25, 2022, (the “Initial Stay”), subject to any extensions of the Initial Stay that the Court might grant upon application by the Company.

Notice of the CCAA and the Monitor’s appointment will be emailed or mailed to all affected creditors shortly.

The initial application materials have been posted under the Motion Materials tab. The Initial Order is posted under the Court Orders tab.

The next court application will be this Tuesday October 25, 2022.

The Monitor will post regular status updates to this website and post future Monitor reports and court materials, as they become available during the CCAA proceedings.

Only the Petitioners has filed for protection from its creditors under the CCAA. The Petitioners Group’s Operating Subsidiaries (listed below) have not filed for protection under the CCAA and will continue to operate in the ordinary course.