Morris Group announced that the Court of Queen’s Bench for Saskatchewan (the Court) granted an Order extending their stay of proceedings under the Companies’ Creditors Arrangement Act (the CCAA) to March 27, 2020 (the Stay Extension), enabling the Companies to continue with their efforts to restructure their business and financial affairs.
In addition to the Stay Extension, the Court approved the Companies’ request for the following:
• Implementation of a Sales and Investment Solicitation Process (SISP);
• Implementation of a Claims Process;
• Debtor in Possession or interim financing (Interim Financing).
The Companies, with the support of the Monitor and their primary secured lenders, believe that a SISP which provides for the greatest flexibility in soliciting interest from various parties for the sale or investment in the shares or assets of the Companies; a refinancing, reorganization, recapitalization, joint-venture, merger, or other business transaction involving the Companies, or some combination thereof, will provide the greatest opportunity for the Morris Group to complete their restructuring. A copy of the SISP and the Monitor’s commentary thereon can be accessed at www.alvarezandmarsal.com/morris (the Case Website).
The Companies, with the support of the Monitor, prepared a Claims Process to establish the amount of creditor claims against the Companies as at January 8, 2020 (the date of the Initial Order). All filed and admitted claims will be considered under a potential plan of compromise and/or arrangement (a Plan) which the Morris Group may present to its creditors and stakeholders.
In accordance with the terms of the Claims Process, all claims must be filed with the Monitor on or before March 2, 2020 (the Claims Bar Date), or forever be extinguished. A copy of the Claims Process and procedures can be accessed on the Case Website. The Companies have been able to secure Interim Financing from Bank of Montreal in the amount of $5.7 million.
Based on the Companies cash flow forecast for the period January 10, 2020 to April 10, 2020, the Interim Financing is anticipated to allow the Companies to continue operations in the ordinary course, and facilitate their restructuring activities during the forecast period. A copy of the Interim Financing terms and the Monitor’s commentary thereon can be accessed on the Case Website.
The Monitor has advised the Court that the Companies were continuing to act in good faith and with due diligence, acknowledged that the Companies required additional time to implement their restructuring activities, and concluded that no creditor would be materially prejudiced by the Stay Extension.
Accordingly, the Court granted the Companies request to extend the CCAA proceedings. The Companies believe that with the support from their secured lenders and additional time to implement their restructuring strategies, the Morris Group will be in the best position to restructure its affairs and formalize a Plan for consideration by their creditors.
Source: Morris Industries