PaySlate Inc. (Re)

PaySlate Inc. (Re)

The court approved the amended RVO because the Proposal Trustee's reports and evidentiary record demonstrated the consideration was reasonable and fair under the BIA, the SISP and follow-up efforts were adequate, the RVO preserved going concern value including tax attributes and cyber insurance, the RVO produced superior stakeholder value compared with an AVO and other offers, the proposed releases were restricted and proportionate, service was valid, and the settlement with Paysafe did not reorder priorities or reduce recoveries to other creditors, thus satisfying s.65.13(4)-(5) of the BIA and applicable authorities.

Citation
2023 BCSC 977
Parties
Debtor/applicant: PaySlate Inc.; Respondent/creditor: Paysafe Merchant Services Inc.; Proposal Trustee: Grant Thornton Limited; Interested Party: Ayrshire Real Estate Management Inc.; Interested Party: 1410512 B.C. Ltd.
Court
Supreme Court of British Columbia
Jurisdiction
Canada
Judgment Date
10 May 2023
Procedural Posture
In Bankruptcy and Insolvency; Notice of Intention to Make a Proposal / Hearing for Approval of Reverse Vesting Order, Validation of Service, Increase in DIP Financing and Extension of Stay
Outcome
The amended reverse vesting order is approved; service is declared valid and effected; DIP financing amount increase approved; settlement with Paysafe accepted; stay extended to May 19, 2023.
Legal Topics
Reverse Vesting Order, Asset Vesting Order, Sale and Investment Solicitation Process (sisp), DIP Financing, Releases and Indemnities, Sr&ed Tax Attributes, Cyber Insurance, Service of Process, Stay Extension
Source Language
English
Bankruptcy and Insolvency Corporate Restructuring Commercial/contract Law Securities/share Acquisitions Reverse Vesting Order Asset Vesting Order Sale and Investment Solicitation Process (sisp) DIP Financing +5 more

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Parties

PaySlate Inc.

Debtor/applicant

Paysafe Merchant Services Inc.

Respondent/creditor

Grant Thornton Limited

Proposal Trustee

Ayrshire Real Estate Management Inc.

Interested Party

1410512 B.C. Ltd.

Interested Party

Procedural Posture

In Bankruptcy and Insolvency; Notice of Intention to Make a Proposal / Hearing for Approval of Reverse Vesting Order, Validation of Service, Increase in DIP Financing and Extension of Stay

Legal Issues

  1. 1 Whether the proposed reverse vesting order (RVO) is reasonable and fair under the BIA and should be approved
  2. 2 Whether the debtor and proposal trustee conducted adequate marketing (SISP) and whether alternatives offer better value
  3. 3 Whether the RVO is necessary to preserve going concern value, tax attributes (SR&ED) and cyber insurance

Ratio Decidendi

The court approved the amended RVO because the Proposal Trustee's reports and evidentiary record demonstrated the consideration was reasonable and fair under the BIA, the SISP and follow-up efforts were adequate, the RVO preserved going concern value including tax attributes and cyber insurance, the RVO produced superior stakeholder value compared with an AVO and other offers, the proposed releases were restricted and proportionate, service was valid, and the settlement with Paysafe did not reorder priorities or reduce recoveries to other creditors, thus satisfying s.65.13(4)-(5) of the BIA and applicable authorities.

Court Disposition

The amended reverse vesting order is approved; service is declared valid and effected; DIP financing amount increase approved; settlement with Paysafe accepted; stay extended to May 19, 2023.

Orders

  • Approve the reverse vesting order as amended and reflected in affidavit exhibit to be filed by counsel for PaySlate
  • Declare service to be valid and effected