Green Relief Inc.

CCAA

Page last updated: May 8, 2020

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 April 8, 2020 (the “Filing Date”), Green Relief Inc. (“Green Relief”, or the “Company”) applied for an order (the “Initial Order”) from the Ontario Superior Court of Justice (Commercial List) (the “Court”) authorizing the Applicant’s restructuring proceedings commenced under Part III of the Bankruptcy and Insolvency Act, R.S.C. 1985 c. B-3 (as amended) (the “BIA”) be taken up and continued under the Companies’ Creditors Arrangement Act, R.S.C.1985, c.C-36, as amended (“CCAA”).  The Initial Order was issued by the Court on April 9, 2020, effective as of April 8, 2020 The Initial Order was amended on April 17, 2020 (the “Amended and Restated Initial Order”). The Amended and Restated Initial Order includes among other things, a stay of proceedings against the Company, and the appointment of PricewaterhouseCoopers Inc., LIT as monitor of Green Relief (“PwC” or the “Monitor”).

The Amended and Restated Initial Order also, among other things:

  1. Approved a stay of proceedings up to and including May 8, 2020 (“Stay Period”), which applies against or in respect of the Company or the Monitor or affecting the business or the property of the Company;
  2. Authorized that the Company shall be entitled to continue to use the central cash management system currently in place (the “Cash Management System”);
  3. Granted a first ranking charge over all property of the Company, as security for professional fees and disbursements of the Monitor, counsel to the Monitor and counsel to the Company, incurred, both before and after making of the Initial Order, up to a maximum aggregate amount of $1,000,000 (the “Administration Charge”);
  4. Granted a second ranking charge in favour of the directors and officers of the Company over all the property of the Company to a maximum amount of $175,000, as security for the Company’s indemnity to the Company’s directors and officers (the “Directors’ Charge”);
  5. Authorized the Company to borrow under a credit facility from Antonio Battaglia (the “DIP Lender”) in order to finance the Company’s working capital requirements and other general corporate purposes and capital expenditures, provided that borrowings under such credit facility shall not exceed $250,000 (the “Bridge DIP Facility”), unless permitted by further order of this Court;
  6. Granted a third ranking charge in favour of DIP Lender over all the property of the Company to a maximum amount of $250,000, as security for the Bridge DIP Facility (the “DIP Lender’s Charge”). DIP Lender’s Charge shall rank subordinate to the security granted by Green Relief to the Rescom Parties (as defined in the Affidavit of Neilank Jha dated April 3, 2020); and
  7. Approved the First Report of PwC in its capacity as the Proposal Trustee of Green Relief and the activities of the Proposal Trustee as described therein.

Notice of the NOI proceedings were sent to all known creditors of the Company on March 17, 2020 by the Proposal Trustee, as a result, in accordance with the Initial Order, a notice will not be sent to creditors pursuant to section 23 (1)(ii)(b) of the CCAA.


Status of File as of May 8, 2020

On May 8, 2020, the Court issued the Stay Extension, DIP Term Sheet Approval, Sealing Order which, among other things:

  1. Extended the Stay Period from May 8, 2020 to and including June 19, 2020;
  2. Approved the Second Bridge DIP Term Sheet entered into between Green Relief and Second Bridge DIP Lender, pursuant to which the Second Bridge DIP Lender agreed to loan the Second Bridge DIP Facility;
  3. Approved a charge on all of the property of the Company for the Second Bridge DIP Facility (the “Second DIP Lender’s Charge”), having a pari passu ranking with the DIP Lender’s Charge;
  4. Sealed confidential Exhibit “C” to the Jha Affidavit; and
  5. Approved the Second Report of the Monitor.

Also, on May 8, 2020 the Court issued an order, retroactive to April 17, 2020 (the “Corporate Governance, Leases and Rescom Commitment Order”) which, among other things declared and ordered that:

  1. The board of directors of Green Relief was properly constituted and had the requisite authority to authorize the Company’s filing of the Notice of Intention to Make a Proposal on March 11, 2020 (“NOI”);
  2. Steven Leblanc is not presently a director of Green Relief and was not a director of Green Relief at the time of NOI;
  3. Subject to the endorsement of J. Koehnen, dated April 20, 2020, no general or special shareholders’ meeting is required to be held;
  4. The relief sought at: (i) paragraphs (d) to (o) of the Notice of Motion of the Minority Shareholders, dated March 18, 2020, and (ii) paragraphs (c) to (r) of the Second Fresh as Amended Notice of Motion of Leblanc dated April 3, 2020, be dismissed;
  5. Green Relief is not required to pay any rent to Lyn Bravo in respect of the lease agreement dated January 1, 2015 or the lease agreement dated January 1, 2016 (collectively the “Leases”), on an interim basis pending the final determination of the validity of the Leases, the liability of Green Relief under those Leases, and whether Green Relief is the beneficial owner of the land known municipally as 780 8th Concession Road West, Hamilton (Puslinch), Ontario and any buildings or facilities thereon;
  6. Lyn Bravo does not have a charge or security interest over any of the assets of Green Relief, is not a secured creditor of Green Relief and) is not entitled to any priority with respect to any amounts that may be determined to be owing to her; and
  7. By no later than the twenty-third (23rd) calendar day of each month, Green Relief and Lyn Bravo shall each pay to the Monitor, an amount equal to the monthly payments required pursuant to the mortgage commitment (the “Commitment”) between Rescom Capital and Lyn Bravo dated August 4, 2016, including accruing real property tax; and
  8. The Monitor shall transfer the monthly payment to Rescom Capital in accordance with the terms and conditions of the Commitment, pending further order of this Court.

Status of File as of May 4, 2020

On May 4, 2020, the Monitor filed its Second Report (the “Second Report”) with the Court to provide the Court with information on:

  1. The Monitor’s activities since the date of the First Report;
  2. The Company’s actual cash flow for the period from April 11, 2020 to April 24, 2020, as compared to the CCAA Cash Flow Forecast (as defined in the Second Report);
  3. A cash flow forecast for the period from April 25, 2020 to June 19, 2020 (the “Extended Cash Flow Forecast”) to reflect the Company’s request to extend the Stay Period; and
  4. The Monitor’s views of the relief sought by the Company in connection with its motion for the Stay Extension, DIP Term Sheet Approval, Sealing Order.

The motion will be heard on May 8, 2020.

Status of File as of May 2, 2020

On May 1, 2020, the Company filed a motion for an order (the “Stay Extension, DIP Term Sheet Approval, Sealing Order”), to among other things:

  1. Extend the Stay Period from May 8, 2020 to and including June 19, 2020;
  2. Approve term sheet (the “Second Bridge DIP Term Sheet”) entered into between Green Relief and Dr. Neilank Jha (the “Second Bridge DIP Lender”) dated May 1, 2020, pursuant to which the Second Bridge DIP Lender agreed to loan the maximum principal amount of $500,000 to Green Relief (the “Second Bridge DIP Facility”);
  3. Seal confidential Exhibit “C” to the Affidavit of Neilank Jha, sworn May 1, 2020 (the “Jha Affidavit”) until further order of the Court; and
  4. Approve the Second Report of the Monitor (the “Second Report”), to be filed, and the activities of the Monitor as set out therein.

Motion will be heard on May 8, 2020.

Status of File as of April 17, 2020

On April 17, 2020, the Court issued the Amended and Restated Initial Order, among other things:

  1. Extending the Stay Period from April 17, 2020 up to and including May 8, 2020;
  2. Permitting the Company to file the Plan;
  3. Granting the Company the ability to restructure its operations, including the disclaimer of agreements and the disposition of assets, if necessary;
  4. Authorizing the Monitor to assist the Company with the development of the Plan and convening a meeting of creditors, when appropriate;
  5. Increasing the Administration Charge from $500,000 to $1,000,000; and
  6. Approving noticing provisions to ensure a fair and orderly determination of any objections to relief sought by a party during the pendency of the CCAA proceedings. 

Status of File as of April 16, 2020

On April 16, 2020, the Monitor filed its First Report (the “First Report”) with the Court to provide the Court with information on:

  1. the Monitor’s activities since the date of the Initial Order;
  2. the Company’s cash flow for the period March 28, 2020 to April 10, 2020; and
  3. the Monitor’s view of the relief sought by the Company in connection with its motion for the Amended and Restated Initial Order to be heard on April 17, 2020 (the “Return Motion”);
  4. the Monitor’s review of the amounts and dates of payments made to Rescom Capital (“Rescom”) and Lyn Bravo to assist the Court in making a determination with respect to certain relief sought by Ms. Bravo at the Return Motion, namely what, if any, amounts should be payable by the Company to Rescom and Ms. Bravo on account of the 2015 Lease, 2016 Lease and the Bravo Loan Agreement (all as defined in the First Report); and
  5. the Monitor’s conclusions and recommendations on the Company’s requested relief.

The motion will be heard on April 17, 2020.

Status of File as of April 15, 2020

On April 15, 2020, the Company filed a motion for an order (the “Amended and Restated Initial Order”) to, among other things:

  1. Extend the Stay Period from April 17, 2020 up to and including May 1, 2020;
  2. Permit the Company to file a plan of compromise or arrangement (“Plan”);
  3. Grant the Company the ability to restructure its operations, including the disclaimer of agreements and the disposition of assets, if necessary;
  4. Authorize the Monitor to assist the Company with the development of a Plan and convening a meeting of creditors, when appropriate;
  5. Increase the Administration Charge from $500,000 to $1,000,000; and
  6. Approve noticing provisions that will ensure a fair and orderly determination of any objections to relief sought by a party during the pendency of the CCAA proceedings. 

The motion will he heard on April 17, 2020.

Contact us

Tammy Muradova

Consulting & Deals, PwC Canada

Tel: ca_green.relief@pwc.com

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