League Assets Corp (Re)

League Assets Corp (Re)

The court approved the restructuring agreement and $17.5M interim financing because the transaction demonstrably created value beyond what foreclosure/order absolute would deliver, produced a superior recovery for unsecured creditors and limited partnership unit holders, was supported by the monitor's marketing and valuation (fixing land value at $17.5M), and satisfied the CCAA s.11.2 factors for DIP financing despite limited notice given exigent circumstances.

Citation
2014 BCSC 2589
Parties
Petitioner: League Assets Corp. and those listed on Schedule A; Monitor: PricewaterhouseCoopers Inc.; Secured Creditor: Quest Mortgage Corp.; Secured Creditor: Quest Capital Management Corp.; Secured Creditor: 0995115 B.C. Ltd. (Epix); Secured Creditor: Peoples Trust Company; Foreclosing Mortgagee/secured Creditor: Meckelborg Financial Group Ltd.; Prospective Purchaser: Anthem Properties Group / Anthem Colwood Holdings Ltd.; Prospective Purchaser / DIP Lender: Onni Development Capital Corp.; Debtor in Possession Lenders: DIP Lenders
Court
Supreme Court of British Columbia
Jurisdiction
Canada
Judgment Date
9 October 2014
Procedural Posture
CCAA Proceeding (companies' Creditors Arrangement Act) / Application for Approval of Restructuring Agreement, Interim Financing (dip) and Conditional Sale Approval; Foreclosure Proceedings and Potential Order Absolute Imminent
Outcome
Order granted approving restructuring agreement with Onni, approving $17.5M interim financing with priority, declaring Colwood land value $17.5M for closing purposes, provisionally approving Anthem sale conditional on non-redemption, and directing holdback of $200,000 to Gowlings held in trust pending further order...
Legal Topics
CCAA Approval, Interim Financing (dip), Foreclosure and Redemption, Security Priority, Valuation, Notice to Creditors, Sale Approval, Compromise and Arrangement
Source Language
English
Insolvency Corporate Law Real Property Bankruptcy Tax CCAA Approval Interim Financing (dip) Foreclosure and Redemption +5 more

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Parties

League Assets Corp. and those listed on Schedule A

Petitioner

PricewaterhouseCoopers Inc.

Monitor

Quest Mortgage Corp.

Secured Creditor

Quest Capital Management Corp.

Secured Creditor

0995115 B.C. Ltd. (Epix)

Secured Creditor

Peoples Trust Company

Secured Creditor

Meckelborg Financial Group Ltd.

Foreclosing Mortgagee/secured Creditor

Anthem Properties Group / Anthem Colwood Holdings Ltd.

Prospective Purchaser

Onni Development Capital Corp.

Prospective Purchaser / DIP Lender

DIP Lenders

Debtor in Possession Lenders

Procedural Posture

CCAA Proceeding (companies' Creditors Arrangement Act) / Application for Approval of Restructuring Agreement, Interim Financing (dip) and Conditional Sale Approval; Foreclosure Proceedings and Potential Order Absolute Imminent

Legal Issues

  1. 1 Whether to approve the Onni restructuring agreement under CCAA ss.11 and 36
  2. 2 Whether to approve interim financing of $17.5 million under CCAA s.11.2 and grant priority
  3. 3 Whether to declare Colwood land value of $17.5 million as fair market value for closing purposes

Ratio Decidendi

The court approved the restructuring agreement and $17.5M interim financing because the transaction demonstrably created value beyond what foreclosure/order absolute would deliver, produced a superior recovery for unsecured creditors and limited partnership unit holders, was supported by the monitor's marketing and valuation (fixing land value at $17.5M), and satisfied the CCAA s.11.2 factors for DIP financing despite limited notice given exigent circumstances.

Court Disposition

Order granted approving restructuring agreement with Onni, approving $17.5M interim financing with priority, declaring Colwood land value $17.5M for closing purposes, provisionally approving Anthem sale conditional on non-redemption, and directing holdback of $200,000 to Gowlings held in trust pending further order...

Orders

  • Approve the restructuring agreement with Onni Development Capital Corp. and authorize the transactions contemplated therein pursuant to CCAA ss.11 and 36
  • Declare the Colwood Development land value for closing purposes to be $17,500,000