Kahunaverse Sports Group Inc. and Soccer Express Trading Corp

CCAA

Page last updated: September 15, 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.


Status Update – September 11, 2020

At the hearing on September 10, 2020, the Court granted Kahunaverse Sports Group Inc. (“KSG”) and Soccer Express Trading Corp, together the “Companies”, application requests, and a copy of the Orders can be found under the Court Orders tab.  The Stay of Proceedings has also been extended to October 30, 2020. 

The Court authorized the Companies to file a Plan of Compromise and Arrangement (the “Plan”), and to hold a virtual Creditors Meeting to vote on the Plan on October 6, 2020.  An email containing all Meeting Materials is being emailed to all creditors on or before September 15, 2020.

A copy of the Meeting Materials has been posted to this website, under the Creditors Meeting tab:

  • Plan of Compromise and Arrangement – Kahunaverse Sports Group Inc. and Soccer Express Trading Corp
  • Schedule C – Electronic Meeting Protocol
  • Schedule D – Notice of Creditors Meeting
  • Schedule E – Form of Proxy
  • Schedule F – Cash Election Form
  • Schedule G – Form of Resolution

The Monitor has issued its Third Report to Court which provides details of the Plan and the Monitor’s view of the Plan.  The Monitor recommends that Creditors vote FOR the Plan.   A summary of the Plan follows:

  • The Plan deals with the debts of KSG and SX on a consolidated basis and provides up to $2 million to be distributed to creditors depending upon what type of claim a Creditor holds.
  • Employee Priority Claims – Initial Employee Priority Claims will be paid by the Companies immediately following court approval of the Plan (expected to be October 13, 2020) and the Plan Implementation Date (expected within 15 days thereafter);
  • Convenience Claims are Unsecured Creditor Claims which are equal to or less than $3,000. Convenience Claims will be paid in full in cash by the Monitor within 14 days of the Plan Implementation Date.  Convenience Creditors are deemed to have voted FOR the Plan and no further action is required for these creditors;
  • Cash Election Claims are Unsecured Creditor Claims held by Unsecured Creditors who elect to reduce the amount of their claim for distribution purposes to $3,000.  Creditors who choose this option by submitting a Cash Election Form will be paid $3,000 in cash by the Monitor within 14 days of the Plan Implementation Date.  No further payment is made in respect to these claims.  Cash Election Creditors are deemed to have voted FOR the Plan for the full value of their claim, and no further action is required for these creditors once they have submitted a Cash Election Form.  The deadline for a creditor to make a Cash Election is October 5, 2020 5:00 pm Vancouver time;
  • Eligible Creditor Claims – Distributions with respect to Unsecured Creditor Claims (other than Employee Priority Claims, Convenience Claims and Cash Election Claims) will be in the form of promissory notes, issued by KSG within 21 days of the Plan Implementation Date.

The face value of the promissory note will be the Eligible Creditor’s pro-rata share of the $2 million, after deductions for payments on Employee Priority Claims, Convenience Claims, Cash Election Claims, and the reserve for claims that remain in dispute.  Greyrock Capital Inc. will guarantee the payment of the promissory notes.  The Monitor estimates that Unsecured Creditors holding Eligible Creditor Claims will receive a promissory note valued between 12 – 13% of their Eligible Claim amount.

The promissory notes will be paid by KSG over a 2 year period, in quarterly instalments, starting with the first payment being made at the time the note is issued.  The notes carry an option that KSG may pay the note in full within 6 months of the Plan Implementation Date, wherein the note will be reduced by 8% of the face value of the note.

To approve the Plan, a majority in number of creditors voting, and 2/3 in value of claims voting, must vote in favour of approving the Plan.  The deadline for a creditor with an Eligible Creditor Claim to submit their Proxy is October 5, 2020 5:00 pm Vancouver time, or, at the Creditors Meeting.

Should Unsecured Creditors approve the Plan at the Creditors Meeting, the Companies intend to seek the Court's approval of the Plan on October 13, 2020.

Further updates will be posted to this website as the restructuring process continues. 

Status Update – September 6, 2020

Kahunaverse Sports Group Inc. and Soccer Express Trading Corp are making an application to Court on September 10, 2020, to seek Court approval:

  • On the filing of a Plan of Compromise and Arrangement (the “Plan”);
  • On a Meeting and Process Order, which includes calling a Creditors Meeting on October 6, 2020 to consider and vote on the Plan;
  • For an extension to the stay of proceedings to October 30, 2020; and
  • On Amending Agreement #2 with respect to the Interim Financing Agreement.

Additionally, the Monitor is making an application to have the Court approve the activities and accounts of the Monitor. 

Copies of application materials and the Monitor’s Third Report to Court will be posted to the Motion Materials tab and the Monitor’s Reports tab respectively, as soon as they become available.

Should the Court approve the above items, the Monitor will be in touch with all creditors who filed a claim in the CCAA Proceedings, by September 15, 2020 at the latest.  Correspondence will be through the email address as noted on your Proof of Claim form. 

Further updates on the Plan and the Creditor Meeting process will be posted to this website as soon as they become available. 

Status Update – July 24, 2020

Yesterday the Court granted the Companies’ application for an extension to the stay of proceedings.  A copy of the Court order granting the stay extension to September 11, 2020 can be found under the Court Orders tab above. 

Status Update as of July 21, 2020

A court hearing is scheduled for Tuesday, July 23, 2020.

Kahunaverse Sports Group Inc (“KSG”) and Soccer Express Trading Corp (“SX”), together the “Companies”, have made significant progress in its restructuring activities, in light of the challenges generated by the COVID-19 pandemic and have advanced discussions with numerous significant vendors, including adidas, to secure ongoing supply arrangements. Presently, the Companies are seeking more time to file a plan(s) of compromise and arrangement (a “Plan”) as further discussions with vendors are required. The Companies are seeking approval to extend the stay of proceedings to September 11, 2020.

Copies of the application materials can be found under the Motion Materials tab. The Monitor’s Second Report to Court, which speaks to the stay extension approval that the Companies are seeking from the Court, can be found under the Monitor’s Reports tab.  A summary of the hearing and any order made by the Court will be posted to this website shortly after the hearing.  

Status Update as of May 12, 2020

Justice Fitzpatrick released oral reasons in respect of the hearing held on May 8, 2020.  A copy of her written reasons, as well the two orders as described below, will be posted to this website as soon as they are available.  As a result of today’s attendance in court:

An Amended and Restated Initial Order (“ARIO”) was granted, highlights which include:

  • adidas Canada Limited (“adidas”) is confirmed to be a Critical Supplier and is ordered to continue to supply product to the Petitioners, and must continue to maintain the Petitioners’ access to the MiTeam and B2B platforms.  Additionally, adidas received a Critical Supplier Charge over the assets of the Petitioners to secure any post-filing obligations of the Petitioners;
  • An Amended Commitment Letter between the Petitioners and Greyrock Capital Incorporated was approved, expanding the Interim Lender credit facility, if needed, to a maximum of $2.8 million, and accordingly increases the Interim Lender’s Charge to that amount; and
  • The stay of proceedings is extended to July 31, 2020.

A Claims Process Order (“CPO”) was granted, highlights which include:

  • An Instruction Letter and Proof of Claim form will be posted to this website as soon as possible;
  • A Claims Bar Date of June 30, 2020 has been set for all creditors to submit their claims to the Monitor; and
  • The Monitor will generate a mailing to all creditors with an Instruction Letter and a Proof of Claim form, to be released to creditors by no later than May 22, 2020.  The Monitor will serve the claims package via email if an email address is available, or, by Canada Post if no email address is available. 

Status Update as of May 8, 2020

As a result of today’s court hearing:

  • Jeff Johnson’s Affidavit No. 2 was sealed by order of the Court; and
  • Justice Fitzpatrick reserved judgment on the Companies’ application, until Tuesday May 12 at 9:00 am, and ordered that the provisions as granted in the Intial Order remain in place until then. 

The Monitor will post another status update on May 12, 2020 after the results of today’s hearing are known. 

Status Update as of April 30, 2020

Effective April 30, 2020, the Notice of Intention (“NOI”) proceedings taken under the Bankruptcy and Insolvency Act ( the “BIA”), were transferred to the Companies’ Creditors Arrangement Act (the “CCAA”).

The transition from the BIA to the CCAA is seamless for creditors and does not require any action at this time.

Key outcomes of today’s hearing are as follows:

  • Adidas Canada Limited was ordered to continue to supply the Companies, and that product would be delivered to the Company on a COD basis;
  • The previously approved Interim Financing Agreement and Interim Lenders Charge was continued and therefore the Company will continue to access that as required;
  • A stay of proceedings was provided to May 8, 2020, at which time the Companies will be attending a further court hearing for a further extension of the stay of proceedings; and,
  • PwC was appointed as the Court appointed Monitor in the CCAA proceedings.

Copies of all documents, including those filed under the NOI and now the CCAA proceedings are posted to this website.  The Monitor will continue to use this website throughout these proceedings, and as such, creditors and any other stakeholders are advised to check this website from time to time for the latest information. 

Kahunaverse and Soccer Express are both working on their Plans to address the pre-filing debts, and once a Plan has been filed, it will be sent to creditors.   


This Web site will be updated as information becomes available.

For more information, please contact: Kiran Chahal, Telephone: +1 604 806 7787, or via Email

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Kiran Chahal

Senior Associate, PwC Canada

Tel: +1 604 806 7787

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