OLD GI INC., 0963867 B.C. UNLIMITED LIABILITY COMPANY, AND OLD TSCT LTD

CCAA

Page last updated: September 24, 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 of August 28, 2023

On August 28, 2023, the Monitor filed its Third Report (the “Third Report”) with the Court to provide the Court with the information concerning:

1. An update on the Transaction and post-closing matters;
2. other activities of the Companies and the Monitor since the date of the Second Report;
3. the Applicants’ actual cash flows for the period from June 10, 2023 to August 18, 2023 as compared to the cash flow forecast included in the Second Report for the same period; and
4. the Applicants’ motion for the CCAA Termination Order.

Status of File as of August 25, 2023

On August 25, 2023, the Applicants filed a motion with the Court for an order (the “CCAA Termination Order”) to, among other things:

1. Terminate the CCAA Proceedings upon the Monitor filing the Termination Certificate with the Court (the “CCAA Termination Time”);
2. Discharge PwC as Monitor upon the Monitor filing its Discharge Certificate with the Court;
3. Approve the First Report of the Monitor, the Second Report of the Monitor and the Third Report of the Monitor, to be filed with the Court and the activities of the Monitor described therein;
4. Approve professional fees and disbursements of the Monitor and its legal counsel incurred in the CCAA Proceedings and the anticipated further fees and disbursements to complete the administration of the CCAA Proceedings;
5. Enhance the Monitor’s powers to, among other things, execute documents and writings on behalf of the Applicants, assign the Applicants and Old GLP Limited Partnership into bankruptcy and empower PwC to act as trustee of the bankrupt estates;
6. Terminate Charges and discharging Bellwood as CRO; and
7. Extend the Stay Period until the CCAA Termination Time.

The motion will be heard on August 30, 2023.

Status of File as of June 26, 2023

Pursuant to the Approval and Vesting Order, the names of the Companies have been changed as follows: 

Status of File as of June 22, 2023

On June 21, 2023, the Court issued the:

1. Approval and Vesting Order, among other things:
   1. Approving the Ironbridge APA, the Escrow Agreement and the Transaction;
   2. Authorizing the Sellers to change their legal names, including in the style of cause of the CCAA Proceedings;
2. Assignment Order, among other things:
   1. Approving the assignment of the rights and obligations of one or more of the Applicants under certain lease agreements, as outlined in Schedule “A” to the Assignment Order, to the Purchasers; and
3. Ancillary Order; among other things:
   1. Approving the establishment of an administrative reserve (the “Administrative Reserve”) in the amount of $3,000,000 for the purposes of securing the Administration Charge, the Directors Charge and the administration of the CCAA Proceeding post the date of the closing of the Transaction;
   2. Authorizing the holding and the release of funds in accordance with the Ironbridge APA and DIP Facility Agreement;
   3. Authorizing distributions to the ABL Lenders; and
   4. Approving the extension to the Stay Period to and including September 8, 2023.

Status of File as of June 16, 2023

The hearing of the motion for the Approval and Vesting Order and the Assignment Order was rescheduled from Jun 19, 2023 to June 21, 2023.

On June 16, 2023, the Monitor filed its Second Report (the “Second Report”) with the Court to provide the Court with information concerning:

1. The activities of the Companies and the Monitor since the date of the First Report;
2. The extended cash flow forecast for the period from June 10, 2023 to September 8,2023 prepared in connection with the Applicants’ request for an extension of the Stay Period;
3. The Applicants’ actual cash flows for the period from May 13, 2023 to June 9, 2023 as compared to the cash flow forecast included in the Pre-Filing Report for the same period; and
4. The Applicants’ motion returnable on June 21, 2023 for the Approval and Vesting Order, the Assignment Order and the Ancillary Order.

Status of File as of June 15, 2023

On June 14, 2023, the Applicants filed a motion with the Court for:

1. An order (the “Approval and Vesting Order”), among other things
   1. Approving the Asset Purchase Agreement made and entered into as of June 14, 2023 (the “Ironbridge APA”) between Gesco, Gesco GP, Gesco LP, and Tierra Sol, as sellers (collectively, the “Sellers”), and Gesco Industries Limited Partnership and Tierra Sol Ceramic Tile Limited Partnership (together, the “Purchasers”) for the sale of the Purchased Assets (as defined in the Motion Record) and the transactions contemplated therein (the “Transaction”);
   2. approving the Transition Services Agreement and Escrow Agreement to be entered into between the Sellers and its affiliates, the Purchasers and the Monitor, at the closing of the Transaction;
   3. extending the Stay Period in favour of the Companies from June 30, 2023 to and including September 8, 2023;
2. An order (the “Assignment Order”), among other things, assigning the rights and obligations of one or more of the Applicants under certain lease agreements as outlined in Schedule “A” to the proposed Assignment Order to the Purchasers; and
3. An order (the “Ancillary Order”),among other things:
   1. Authorizing the holding and release of funds in accordance with the Ironbridge APA and DIP Facility Agreement;
   2. subject to certain holdback and reserve amounts, authorizing distributions to the Bank of Nova Scotia as lead arranger and security and administrative agent for the secured lenders, Scotia Asset Finance, a division of BNS and Roynat Capital Inc., (the “ABL Lenders”); and
   3. approving the extension to the Stay Period to and including September 8, 2023.

The motion will be heard on June 19, 2023.

Status of File as of May 30, 2023

On May 29, 2023, the Court issued the Amended and Restated Initial Order which, among other things:

1. Extended the Stay Period until and including June 30, 2023;
2. Approved the increase of the Companies’ ability to borrow under the DIP Facility from $1,500,000 to $8.6 million;
3. Approved the decrease to the Administration Charge from $800,000 to $750,000;
4. Approved the increase to the Directors’ Charge from $600,000 to $1.8 million; and
5. Approved the increase to the DIP Lender’s Charge from $1,500,000 to $8.6 million.

Status of File as of May 26, 2023

On May 25, 2023, the Monitor filed its First Report with the Court (the “First Report”) to provide the Court with:

1. Information pertaining to the activities of the Companies and the Monitor since the Filing Date; and
   
2. The Monitor’s views and recommendations on the Applicants motion for the ARIO.

Status of File as of May 24, 2023

On May 24, 2023, the Applicants filed a motion for an order (the “Amended and Restated Initial Order” or the “ARIO”) to, among other things:

1. Extend the Stay Period until and including June 30, 2023;
2. Approve the increase of the Companies’ ability to borrow under the DIP Facility from $1,500,000 to $8.6 million;
3. Approve the decrease to the Administration Charge from $800,000 to $750,000;
4. Approve the increase to the Directors’ Charge from $600,000 to $1.8 million; and
5. Approve the increase to the DIP Lender’s Charge from $1,500,000 to $8.6 million.

Status of File as of May 19, 2023

On May 19, 2023 (the “Filing Date”), Gesco Industries Inc. ("Gesco”), Gesco GP ULC (“Gesco GP”) and Tierra Sol Ceramic Tile Ltd. (“Tierra Sol” and collectively, the “Applicants”) applied for and received an order (the “Initial Order”) for protection pursuant to the Companies’ Creditors Arrangement Act R.S.C.1985, c.C-36, as amended (“CCAA Proceedings”) from the Ontario Superior Court of Justice Commercial List (the “Court”).

The Initial Order, among other things:

1. Declared that Gesco Holdings ULC (“Gesco Holdings”) and Gesco Limited Partnership (“Gesco LP” and together with the Applicants and Gesco Holdings, the “Companies”) shall be bound by the Initial Order as though they were Applicants;
2. Appointed PricewaterhouseCoopers Inc., LIT (”PwC”) as monitor of the Companies (the “Monitor”);
3. Approved a stay of proceedings up to and including May 29, 2023 (“Stay Period”), which applies against the Companies or the Monitor, or any of their respective employees and representatives, any of the former, current or future directors or officers of any of the Companies and the Companies’ Property and Business (as defined in the Initial Order);
4. Approved the appointment of Bellwood Capital Limited (“Bellwood”) to act as Chief Restructuring Officer (“CRO”) of the Companies;
5. Authorized the Companies to continue to use the central cash management system (“CMS”) currently in place as described in the affidavit of Muzzaffar Khokhar, sworn May 18, 2023 (the “Khokhar Affidavit”) or, with the consent of the Monitor and the DIP Lender (as defined below), replace it with another substantially similar CMS;
6. Granted a first ranking charge, in the amount of $800,000 (the “Administration Charge”), on the Property of the Companies, as security for the professional fees and disbursements of the CRO, the Monitor, the Monitor’s counsel and the Companies’ counsel, which charge shall rank in priority to all other security interests, trusts, liens, charges and encumbrances, claims of secured creditors, statutory or otherwise;
7. Granted a second ranking charge, in the amount of $600,000 (the “Directors’ Charge”), on the Property of the Companies, as security for the indemnity granted to the Companies’ directors and officers, which charge shall rank in priority to all other security interests, trusts, liens, charges and encumbrances, claims of secured creditors, statutory or otherwise; and
8. Authorized the Companies to borrow under a credit facility from Bank of Nova Scotia (“BNS” or the “DIP Lender”) in order to finance the Companies’ working capital requirements and other general corporate purposes and capital expenditures, provided that borrowings under such credit facility shall not exceed $1,500,000 (the “DIP Facility”), unless permitted by further order of this Court; and
9. Granted a third ranking charge in favour of the DIP Lender over the Property of the Companies to a maximum amount of $1,500,000, as security for the DIP Facility (the “DIP Lender’s Charge”).

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