In the Matter of a Plan of Arrangement of UrtheCast Corp.

In the Matter of a Plan of Arrangement of UrtheCast Corp.

The court approved the SAR and Geosys asset sales and ordered the assignment because the Monitor supported the transactions, Antarctica Capital and its Purchasers provided reasonable assurance (not an ironclad guarantee) they could raise necessary capital and had committed funds and due diligence, the assignment was necessary to preserve a critical income stream and enable restructuring, and the benefits of the restructuring outweighed Land O'Lakes' concerns about alleged contractual defaults and competitive issues; accordingly the tests in s.11.3(3)(b) and (c) and factors in s.36(3) were satisfied.

Citation
2021 BCSC 1819
Parties
Petitioner: UrtheCast Corp.; Petitioner: UrtheCast International Corp.; Petitioner: UrtheCast USA Inc.; Petitioner: 1185729 BC Ltd.; Monitor: Ernst & Young Inc. (Monitor); Objector: Land O'Lakes, Inc.; Objector: WinField Solutions LLC; Interested Party: 1262743 BC Ltd.; Proposed Purchaser: Antarctica Capital; Proposed Purchaser: UrtheDaily entities (Purchasers)
Court
Supreme Court of British Columbia
Jurisdiction
Canada
Judgment Date
7 January 2021
Procedural Posture
Companies' Creditors Arrangement Act Proceedings / Application for Extension of Stay and Approval of Asset Sales and Assignments
Outcome
Application granted in part and approved as set out by the court
Legal Topics
Assignment of Contracts, Asset Sale Approval, Stay Extension, Directors and Officers Releases, Set Off and Cure Obligations
Source Language
English
Insolvency Corporate Law Contract Law Assignment of Contracts Asset Sale Approval Stay Extension Directors and Officers Releases Set Off and Cure Obligations

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Parties

UrtheCast Corp.

Petitioner

UrtheCast International Corp.

Petitioner

UrtheCast USA Inc.

Petitioner

1185729 BC Ltd.

Petitioner

Ernst & Young Inc. (Monitor)

Monitor

Land O'Lakes, Inc.

Objector

WinField Solutions LLC

Objector

1262743 BC Ltd.

Interested Party

Antarctica Capital

Proposed Purchaser

UrtheDaily entities (Purchasers)

Proposed Purchaser

Procedural Posture

Companies' Creditors Arrangement Act Proceedings / Application for Extension of Stay and Approval of Asset Sales and Assignments

Legal Issues

  1. 1 Whether assignee can perform contractual obligations under s.11.3(3)(b) of the CCAA
  2. 2 Whether it is appropriate to order a non-consensual assignment under s.11.3(3)(c) of the CCAA
  3. 3 Whether the proposed asset sales should be approved under s.36(3) of the CCAA

Ratio Decidendi

The court approved the SAR and Geosys asset sales and ordered the assignment because the Monitor supported the transactions, Antarctica Capital and its Purchasers provided reasonable assurance (not an ironclad guarantee) they could raise necessary capital and had committed funds and due diligence, the assignment was necessary to preserve a critical income stream and enable restructuring, and the benefits of the restructuring outweighed Land O'Lakes' concerns about alleged contractual defaults and competitive issues; accordingly the tests in s.11.3(3)(b) and (c) and factors in s.36(3) were satisfied.

Court Disposition

Application granted in part and approved as set out by the court

Orders

  • Extend the stay of proceedings to February 15, 2021
  • Approve SAR Asset Purchase Agreement (SAR APA)