Wayland Group Corp., 2751609 Ontario Inc. and Nanoleaf Technologies Inc. (Maricann Inc. was also a party in the CCAA proceedings and was removed pursuant to the Approval & Vesting Order)

CCAA

Page last updated: April 21, 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 December 2, 2019 (the “Filing Date”), Wayland Group Corp.,  (“Wayland”),  Maricann Inc. (“Maricann”) and Nanoleaf Technologies Inc. (“Nanoleaf”, and  collectively with Wayland and Maricann the “Companies” or the “Applicants”) applied for and received an order (the “Initial Order”) for protection pursuant to the Companies’ Creditors Arrangement Act (“CCAA”), R.S.C.1985, c.C-36, as amended, from the Ontario Superior Court of Justice Commercial List (the “Court”). The Initial Order was amended on December 4, 2019 (the “Amended and Restated Initial Order”). The Amended and Restated Initial Order was amended on December 16, 2019 (the “Second Amended and Restated Initial Order”). The Second Amended and Restated Initial Order includes among other things, a stay of proceedings against the Companies, and the appointment of PricewaterhouseCoopers Inc., LIT as monitor of the Applicants (“PwC” or the “Monitor”).

The Initial Order, among other things:

  1. Approved a stay of proceedings up to and including January 31, 2020 (“Stay Period”), which applies against the Applicants and its Non-Filing Affiliates (as defined in the affidavit of Mathew MacLeod sworn December 2, 2019) and their property and business;
  2. Authorized the Applicants to borrow under a debtor-in possession credit facility, (as amended the “Amended DIP Facility”) with The House of Turlock Ltd., (the “DIP Lender”) up to a maximum amount of $10.05 million;
  3. Approved the engagement between the Applicants and LongGrass Marketing Inc. (“LGMI”), pursuant to which LGMI will make available the services of Terry Fretz to act as chief restructuring officer (the “CRO”) of the Applicants;
  4. Granted a first ranking charge, in the amount of $1,000,000 (the “Administration Charge”), over all of the property of the Applicants, as security for fees and disbursements of the Monitor, the Monitor’s counsel, the Applicants’ counsel, LGMI and Terry Fretz, in his capacity as CRO;
  5. Granted a second ranking charge, in the amount of $200,000 (the “Directors’ Priority Charge”), over all of the property of the Companies, as security for the indemnity granted to the Applicants’ directors and officers;
  6. Granted a third ranking charge over the property of the Applicants (the “DIP Lender’s Charge”) in favour of the DIP Lender as security for the DIP Facility; and
  7. Granted a fourth priority charge, in the amount of $250,000 over the property of the Companies (the “Directors’ Subordinate Charge”) as security for the indemnity granted to the Applicants’ directors and officers.

In accordance with section 23 (1)(ii)(b) of the CCAA and the Amended and Restated Initial Order, a notice was sent to all of the Applicants’ creditors who are owed $1,000 or more.


Status of File as of April 21, 2020

On April 21, 2020, the Court issued the Approval & Vesting Order, which among other things:

  1. Approved the SPA entered into on April 15, 2020 by Wayland, Maricann, and the Purchaser with respect to the sale of all the Maricann Shares;
  2. Authorized to add ResidualCo, a subsidiary of Wayland, to be incorporated under the laws of Ontario, as an Applicant in these CCAA proceedings to effectuate the Transaction;
  3. Authorized the transfer of the Excluded Liabilities, Excluded Assets and Excluded Contracts to Residual Co and vesting the Excluded Liabilities, Excluded Assets and Excluded Contracts in Residual Co on or before closing such that the Excluded Liabilities shall become liabilities of Residual Co and not liabilities of Maricann;
  4. Authorized vesting of (i) all of Wayland’s right, title and interest in and to certain of its assets in Maricann, and (ii) all of the right, title and interest in and to the Maricann Shares in the Purchaser;
  5. Granted the Payables Charge, which charge shall not exceed $1 million and which shall be in priority to the Directors’ Subordinated Charge and all other secured claims and subordinate to all other Court-ordered charges.

Status of File as of April 17, 2020

On April 17, 2020, the Court issued the Wind-Down and Liquidation Order, which, among other things:

  1. Approved the liquidation of the remaining assets of the Applicants and expanded the powers of the Monitor;
  2. Directed that in the event that the Transaction does not close or is terminated, the Administration Charge shall be increased from $1 million to $1.25 million;
  3. Extended the Stay Period until and including (i) in the event that the SPA has occurred, December 4, 2020, (ii) in the event that the SPA has not occurred, October 30, 2020, or (iii) in either case, such later date as this Court may order; and
  4. Approved the Sixth Report of the Monitor.

Status of File as of April 16, 2020

April 16, 2020, the Monitor filed its Sixth Report (the “Sixth Report”) with the Court to provide the Court with information concerning:

  1. The Companies and Monitor’s activities since the Fifth Report;
  2. The Monitor’s views on the SPA;
  3. The Companies’ intention to add Residual Co as an Applicant in the CCAA proceedings to effectuate the Proposed Transaction;
  4. The Monitor’s views on the request to grant the Payables Charge;
  5. The Monitor’s views on the Companies’ request for approval of the liquidation of the remaining assets of the Applicants (including Maricann in the event that the Proposed Transaction is terminated or does not close as anticipated for any other reason) and expanding the powers of the Monitor in connection therewith;
  6. The Monitor’s views on the request to increase the Administration Charge;

On April 15, 2020, the Applicants filed the Motion (referred to in the status update dated April 9, 2020), to among other things seek two orders, as follows:

1. the Approval & Vesting Order, among other things:

a. Approve the Share Purchase Agreement (the “SPA”) entered into on April 15, 2020 by Wayland, Maricann, and CanAdelaar B.V. as buyer (the “Purchaser”), with respect to the sale of all issued and outstanding shares of Maricann (the “Maricann Shares”);

b. Add a subsidiary of Wayland to be incorporated under the laws of Ontario (“ResidualCo”) as an Applicant in these CCAA proceedings in order to effectuate the transaction contemplated by the SPA (the “Transaction”);

c. Transfer the Excluded Liabilities, Excluded Assets and Excluded Contracts (all as defined in the Motion) to Residual Co and vesting the Excluded Liabilities, Excluded Assets and Excluded Contracts in Residual Co on or before closing such that the Excluded Liabilities shall become liabilities of Residual Co and not liabilities of Maricann;

d. Vest (i) all of Wayland’s right, title and interest in and to certain of its assets in Maricann, and (ii) all of the right, title and interest in and to the Maricann Shares in the Purchaser;

e. Grant a charge (the “Payables Charge”) on the property of the Applicants in favour of the Purchaser in respect of any Closing Funding (as defined in the Motion) advances, which charge shall not exceed $1 million and which shall be in priority to the Directors’ Subordinated Charge and all other secured claims and subordinate to all other Court-ordered charges; and

2. the Wind-Down and Liquidation Order, among other things:

a. Approve the liquidation of the remaining assets of the Applicants and expanding the powers of the Monitor in connection therewith;

b. In the event that the Transaction does not close or is terminated, increasing the Administration Charge from $1 million to $1.25 million; and

c. Extend the Stay Period until and including (i) in the event that the SPA is not terminated, December 4, 2020, (ii) in the event that the SPA is terminated, October 30, 2020, or (iii) in either case, such later date as this Court may order.

The Motion for the Wind-Down and Liquidation Order will be heard on April 17, 2020 by video conference.

The Motion for the Approval & Vesting Order will be heard on April 21, 2020 by video conference.

Status of File as of April 9, 2020

On April 8, 2020, the Applicants’ legal counsel issued a notice by e-mail (the “Notice”) advising all parties on the Service List that the Applicants have scheduled a motion (the “Motion”) to be heard by video conference call on April 17, 2020 at 10:00 a.m. for orders (the “Approval & Vesting Order” and the “Wind-Down and Liquidation Order”), inter alia:

  1. Approving a sale of the shares of Maricann and certain other property of the Applicants free of claims and encumbrances; and
  2. Authorizing the Monitor to initiate a liquidation of the Applicants’ property (including Maricann’s property in the event that the sale transaction does not close).

Given the COVID-19 shut downs and the recent directions of the Court, it is possible that this Motion may proceed in writing in the event that there is no opposition.

The Notice has been posted on the “Notices and List of Creditors” subpage of this website.

The Motion materials will be posted on the “Motion Materials and Notices of Appearance” page of this website as soon as they become available. 

Status of File as of April 1, 2020

On March 31, 2020, the Court issued an order (the “Stay Extension Order”) extending the Stay Period until and including April 17, 2020.

Status of File as of March 27, 2020

On March 27, 2020, the Receiver filed its Fifth Report (the “Fifth Report”) with the Court to provide the Court with information concerning:

  1. The activities of the Companies and the Monitor since the Fourth Report;
  2. An update in respect of the SISP;
  3. Companies’ actual cash flows for the 14-week period from the week ending December 20, 2019 through to the week ending March 20, 2020, as compared to the Full Case Projection; and
  4. The Monitor’s views on the Companies' request for approval of an extension of the stay of proceedings to and including April 17, 2020.

On March 26, 2020, the Applicants filed a motion to extend the Stay Period until and including April 17, 2020.

The motion will be heard on March 31, 2020.

Status of File as of February 12, 2020

On February 12, 2020, the Court issued the Approval and Vesting Order, which, among other things

  1. Approved the Colmed SPA, the Termination Agreement and the Conveyance Agreement; 
  2. Approved the Colmed Transaction;
  3. Approved the ICC transaction (the “ICC Transaction”) as contemplated in the Termination Agreement;
  4. Authorized the postponement of Wayland’s annual meeting of shareholders until further order of the Court; 
  5. Approved the First Report, the Second Report, and the Third Report of the Monitor and the activities of the Monitor referred to therein; and
  6. Approved the fees of the Monitor and its legal counsel as described in the Fourth Report.

Status of File as of February 10, 2020

On February 10, 2020, the Monitor filed its Fourth Report (the “Fourth Report”) with the Court to provide the Court with information concerning:

  1. The activities of the Companies and the Monitor since the Third Report;
  2. The Monitor's views on Wayland’s request for approval of the sale of the Wayland's shares of Colmed to the Colmed Buyers (the “Colmed Transaction”);
  3. The Monitor's views on the Termination Agreement and the Conveyance Agreement;
  4. Amendments made to the Amended DIP Commitment Letter (the “First Amendment to the Amended DIP Commitment Letter”);
  5. An update in respect of the SISP;
  6. Wayland’s actual cash flows for the seven-week period from the week ending December 20, 2019 through to the week ending January 31, 2020, as compared to the Full Case Projection; and
  7. Approval of the Monitor's previous reports and the Monitor's and its legal counsel's professional fees and disbursements up to and including January 26, 2020.

The motion will be heard on February 12, 2020.

Status of File as of February 7, 2020 

On February 6, 2020, the Applicants filed a motion (the “Sale Approval Motion”) with the Court for an order (the “Approval and Vesting Order”) to, among other things:

  1. Approve the share purchase agreement (the “Colmed SPA”) entered into on February 2, 2020 by Wayland, as seller, and RG5 Investments Inc. and Albert Sheeler, as buyer (collectively, the “Colmed Buyers”), with respect to the sale of the shares of Wayland’s Colombian subsidiary, Colmed Pharmaceuticals S.A.S. (“Colmed”);
  2. Approve the transactions contemplated by the termination agreement made as of October 11, 2019 (the “Termination Agreement”) among Wayland, Maricann, Maricann B.V. and ICC International Cannabis Corp. (“ICC”) as well as the related Conveyance Agreement (as defined in the Sale Approval Motion);
  3. Postpone Wayland’s annual meeting of shareholders until further order of the Court; and
  4. Approve the fees and activities of the Monitor as described in the Fourth Report of the Monitor, to be filed.

The motion will be heard on February 12, 2020.

Status of File as of January 22, 2020 

On January 21, 2020, the Applicants and the DIP Lender entered into an agreement to amend the initial DIP Commitment Letter (the "Amended DIP Facility"). The credit available on the Amended DIP Facility remains the same at $10.05 million. 

Status of File as of January 13, 2020

On January 13, 2020, the Court issued the SISP & KERP Approval Order which, among other things,

  1. Approved the SISP;
  2. Approved the KERP;
  3. Granted the KERP Charge in the amount of $500,000 and set its priority ranking behind the Administration Charge and the Directors’ Priority Charge;
  4. Sealed from the public record certain commercially sensitive and personal information relating to the KERP; and
  5. Extended the Stay Period until and including March 31, 2020.

Status of File as of January 9, 2020

On January 8, 2020, the Monitor filed its Third Report (the “Third Report”) with the Court to provide the Court with information concerning:

  1. The activities of the Companies and the Monitor since the Second Report;
  2. The cash flow forecast approved by the DIP Lender (the “Full Case Projection”);
  3. Companies’ actual cash flows for the three-week period from the week ending December 20, 2019 through to the week ending January 3, 2020, as compared to the Full Case Projection;
  4. The proposed SISP for all or substantially all of Companies’ assets;
  5. A proposed KERP; and
  6. The Monitor’s views on Companies’ request for approval of an extension of the Stay Period to and including March 31, 2020.

The motion will be heard on January 13, 2020.

Status of File as of January 8, 2020

On January 7, 2020, the Applicants, filed a motion with the Court for an order (the “SISP & KERP Approval Order”), among other things, to

  1. Approve the SISP in respect of the Applicants’ business and assets;
  2. Approve a key employee retention plan (the “KERP”);
  3. Grant a charge over the property of the Applicants in favour of the proposed KERP beneficiaries (the “KERP Charge”);
  4. Seal from the public record certain commercially sensitive and personal information relating to the KERP; and
  5. Extend the Stay Period until and including March 31, 2020.

The motion will be heard on January 13, 2020.

Status of File as of December 16, 2019

On December 16, 2019, the Court issued the Second Amended and Restated Initial Order, which among other things:

  1. Authorized the Applicants to continue borrowing under the Amended DIP Facility up to a maximum amount of $10.05 million;
  2. Sealed from the public record certain commercially sensitive information relating to certain other DIP commitment proposals received by the Applicants;
  3. Approved the engagement between the Applicants and LGMI, pursuant to which LGMI will make available the services of Terry Fretz to act as the CRO of the Applicants;
  4. Approved the fees and expenses contemplated under the CRO engagement letter and granting the CRO the benefit of the Administration Charge; and
  5. Extended the Stay Period until and including January 31, 2020.

It is anticipated that a sale and investment solicitation process (the "SISP") will be brought before the Court on January 13, 2019. Further information concerning the SISP will be posted on this website when the related materials are served. 

Status of File as of December 15, 2019

On December 15, 2019, the Applicants, filed a motion with the Court for an order (the “Second Amended and Restated Initial Order”), among other things, to

  1. Authorize the Applicants to continue borrowing under the debtor-in-possession credit facility with the DIP Lender (as amended, the “Amended DIP Facility”) up to a maximum amount of $10.05 million;
  2. Seal from the public record certain commercially sensitive information relating to certain other DIP commitment proposals received by the Applicants;
  3. Approve the engagement between the Applicants and Long Grass Marketing Inc. (“LGMI”), pursuant to which LGMI will make available the services of Terry Fretz to act as the chief restructuring officer (the “CRO”) of the Applicants;
  4. Approve the fees and expenses contemplated under the CRO engagement letter and granting the CRO the benefit of the Administration Charge; and
  5. Extending the Stay Period until and including January 31, 2020.

Also, on December 15, 2019, the Monitor filed its Second Report (the “Second Report”) to provide the Court with information concerning:

  1. The activities of the Applicants and the Monitor since the Filing Date and the First Report;
  2. Companies’ actual cash flows from the Filing Date to December 6, 2019, as compared to the cash flow forecast included in the First Report;
  3. An extended cash flow forecast (the “Extended Cash Flow Forecast”) in connection with the extension of the Stay Period;
  4. The Monitor’s views on a motion (the “Construction Lien Motion”) by the Moving Construction Lien Claimants (as defined in the Second Report) to, among other things:
    1. challenge the priority and/or quantum of the Administration Charge, the Directors’ Priority Charge and the Directors’ Subordinate Charge; and
    2. appoint a representative lien claimant and representative counsel for all lien claimants, the fees and expenses of which are proposed to be paid by the Applicants and secured by a court-ordered super-priority charge on the Applicants’ real property in Langton, Ontario (the “Langton Property”);
  5. The Applicants’ retention of LGMI pursuant to which LGMI has made the services of Terry Fretz available to act as CRO of the Applicants;
  6. The Amended DIP Facility to fund the Companies’ operations through the requested Stay Period; and
  7. The Monitor’s views on Applicants’ request for approval of an extension of the Stay Period to and including January 31, 2020.

The motion will be heard on December 16, 2019.

Status of File as of December 13, 2019

The Applicants have scheduled a motion before the Court on Monday, December 16 at 10 a.m. at 330 University Avenue, 8th Floor.  At that time, the Applicants intend to seek an order, among other things, (i) extending the Stay of Proceedings to a date to be fixed; and (ii) approval of DIP financing.

Status of File as of December 5, 2019

On December 4, 2019, the Court granted the Amended and Restated Initial Order, which among other things,

  1. Authorized the Applicants to obtain and borrow under the DIP Facility up to $1,100,000;
  2. Granted the DIP Lender’s Charge in favour of the DIP Lender;
  3. Authorized, but did not require, the Applicants to make certain payments to certain third parties (including payments owing in arrears) where the Applicant determine, with the consent of the Monitor, that those third parties provide services that are critical to the continued operations of the Applicants; and
  4. Extended the Stay Period until and including December 16, 2019.

Status of File as of December 4, 2019

On December 4, 2019, the Applicants filed a motion with the Court to amend the Initial Order (the “Amended and Restated Initial Order”) to, among other things,

  1. Authorize the Applicants to obtain and borrow under a debtor-in-possession credit facility to finance their working capital requirements and other general corporate purposes and post-filing expenses and costs during the ten-day period immediately following the granting of the Amended and Restated Initial Order;
  2. Grant a charge over the property of the Applicants (the “DIP Lender’s Charge”) in favour of The House of Turlock Ltd. (the “DIP Lender”);
  3. Authorize, but not require, the Applicants to make certain payments to certain third parties (including payments owing in arrears) where the Applicant determine, with the consent of the Monitor, that those third parties provide services that are critical to the continued operations of the Applicants; and
  4. Extend the Stay Period until and including December 14, 2019.

On the same date, the Monitor filed its Frist Report (the “First Report”) with the Court to provide the Court with information concerning:

  1. The update on the Monitor’s activities since Filing Date;
  2. Applicants’ short-term cash flow projection (the “Short-Term Cash Flow Forecast”) for the period December 4, 2019 to December 14, 2019 (the “Forecast Period”);
  3. The proposed DIP Financing (as defined in the First Report);
  4. The relief granted to the Applicants under the Initial Order;
  5. The relief being sought by the Applicants in connection with the proposed Amended and Restated Initial Order; and
  6. The Monitor’s conclusions and recommendations.

The motion will be heard on December 4, 2019.

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