Harbour Grace Ocean Enterprises Ltd. and Laurenceton Holdings Ltd.

CCAA

^{Page last updated: May 12, 2024}

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 of the File as of April 26, 2024

On April 26, 2024, the Monitor filed a Supplement to its Fifth Report to the Court (the “Supplement to the Fifth Report”) to inform the Court of the following:

1. The activities of the Monitor since the date of the Fifth Report and other developments pertaining to the CCAA Proceedings; 
2. The remaining relief sought by the Monitor in its motion for the Distribution, Transition and Termination Order, including:
   a. The approval of the Allocation Methodology (as defined in the Fifth Report);
   b. The approval of certain distributions to CRA and BDC;
   c. The approval of the professional fees and disbursements of the Monitor, its legal counsel and co-counsel;
   d. The approval of the reports filed by the Monitor with the Court in these CCAA Proceedings, including this Supplement to the Fifth Report, and the activities of the Monitor described in these reports; and
   e. The termination of the CCAA Proceedings upon the filing of the Monitor’s Termination Certificate.

Status of the File as of March 26, 2024

On March 22, 2024, the Court issued the Stay Extension Order, among other things, extending the Stay Period to June 3, 2024.

Status of the File as of March 19, 2024

On March 19, 2024, the Monitor filed a motion with the Court for an order (the “Distribution, Transition and Termination Order”) to, among other things:

1. Approve the Allocation Methodology and the Distributions (as defined in the Fifth Report);
2. Lift the stay of proceedings granted by the Court, as it relates to Laurenceton and the real property located at 35 York Street, St John’s, NL, owned by Laurenceton, solely for the limited purpose set out in the Distribution, Transition and Termination Order;
3. Approve the reports of the Monitor filed in the CCAA Proceedings with the Court (the “Reports”) and the Monitor’s actions and conduct as described in the Reports;
4. Approve the fees and disbursements of the Monitor and its legal counsels, as described in the Fifth Report (defined below);
5. Discharge the BMO DIP Lender’s Charge, the Director’s Charge and the Administration Charge;
6. Terminate the CCAA Proceedings and discharge the Monitor upon the Monitor filing the Monitor’s Certificate, certifying that all matters in connection to this CCAA Proceedings have been completed (the “CCAA Termination Time”);
7. Grant the Monitor the Enhanced Powers (as described in the Distribution, Transition and Termination Order), including authorizing the Monitor to assign the Companies into bankruptcy on or after the CCAA Termination Time; and
8. Extend the Stay Period to and including the earlier of the CCAA Termination Time or such other date the Court may order.

On the same date, March 19, 2024, the Monitor filed its Fifth Report (the “Fifth Report”) with the Court, to inform the Court of the:

1. The activities of the Companies and the Monitor since the Fourth Report;
2. The cash position of the Companies;
3. Details regarding the intercompany accounts, receivable and payable amounts between HGOE and the Gray Entities (as defined in the Fifth Report), as requested by the Court;
4. The allegations relating to the SISP set out in the affidavit sworn by Kevin English on February 27, 2024 (the “English Affidavit”);
5. An update on the 35 York Street Transaction; and
6. The Monitor’s application for the Distribution, Transition and Termination Order.

Status of the File as of March 11, 2024

On February 28, 2024, the Court issued an order (the “Stay Extension Order”) which, among other things extended the Stay Period to and including March 22, 2024.

Status of the File as of February 26, 2024

On February 26, 2024, the Monitor filed its Fourth Report (the “Fourth Report”) with the Court to inform the Court of:

1. The activities of the Companies and the Monitor since the Third Report;
2. Details regarding the closing of the sale transaction with Green Skiff (the “Green Skiff Transaction”);
3. The Companies’ actual cash flows from February 2, 2024 to February 23, 2024 as compared to the extended cash flow forecasts included in the Third Report; and
4. An extended cash flow forecast (the “Second Extended Cash Flow Forecast”) for Laurenceton Holdings Ltd. prepared in connection with the Companies’ request for an extension of the Stay Period to March 22, 2024.

Status of the File as of February 22, 2024

On February 22, 2024, the Applicants filed a motion with the Court for an order, among other things extending the Stay Period to and including March 22, 2024.

The motion will be heard on February 28, 2024.

Status of the File as of February 12, 2024

On February 8, 2024, the Court issued 

1. The Approval and Vesting Order which, among other things:
   a. Approved the APA and the transaction contemplated therein;
   b. Extended the Stay Period to February 29, 2024;
   c. Approved the Third Report of the Monitor and actions of the Monitor described therein; and
2. The Sealing Order which, among other things:
   a. Sealing the Confidential Exhibit “1” to the affidavit of Paul Lannon sword February 5, 2024 and Confidential Exhibit “1” to the affidavit of Paul Lannon sword February 6, 2024; and
   b. Sealing all confidential appendices to the Third Report.

Status of the File as of February 6, 2024

On February 6, 2024, the Monitor filed its Third Report with the Court to inform the Court of:

1. The activities of the Companies and the Monitor since the Second Report;
2. The Companies’ actual cash flow as compared to the cash flow forecast included in the Second Report;
3. An extended cash flow forecast prepared in connection with the Companies’ request for the extension of the Stay Period to February 29, 2024; and
4. The Companies’ request for the Approval and Vesting Order.

Status of the File as of February 5, 2024

On February 5, 2023, the Companies filed its motion with the Court for an order (the “Approval and Vesting Order”) to, among other things:

1. Approve a transaction (the “Proposed Transaction”) contemplated by an Asset Purchase Agreement dated February 1, 2024 (the “APA”) between Green Skiff Investments Inc. or its designate, as purchaser (the “Purchaser”), and each of the Applicants, as vendors, pursuant to which the Purchaser shall acquire the Purchased Assets (as defined in the APA), comprising substantially all the Applicants’ business, including related assets, properties, and undertakings;
2. Extend the Stay Period to and including February 29, 2024;
3. Approve the Third Report of the Monitor (the “Third Report”), to be filed with the Court, as well as the activities of the Monitor as set out in the Third Report; and
4. Seal Confidential Exhibit “1” to the affidavit of Paul Lannon sworn February 5, 2024, being an unredacted copy of the APA including the purchase price for the Purchased Assets, until the earlier of the filing of the Monitor’s Certificate certifying that the Proposed Transaction has closed, or further Court order.

The motion will be heard on February 8, 2024.

Status of the File as of November 17, 2023

On November 17, 2023, the Court issued the Amended and Restated Initial Order which, among other things:

1. Extended the Stay Period to and including February 9, 2024;
2. Maintained the Administration Charge (as defined in the Initial Order and the ARIO) at $105,000;
3. Approved the Debtor-in-Possession Financing Term Sheet between the Applicants and BMO the BMO DIP Facility not exceeding $1million;
4. Authorized and directed the Monitor to make a distribution to Gray, the DIP Lender, from funds available under the BMO DIP Facility, $270,000 plus any accrued interest, and that following the payment the DIP Lender’s Charge shall be terminated, released and discharged; and
5. Granted the BMO DIP Charge in the maximum amount of $1 million.

Status of the File as of November 16, 2023

On November 16, 2023, the Monitor filed its Second Report (the “Second Report”) with the Court, to inform the Court of:

1. The activities of the Companies and the Monitor since the Filing Date;
2. The Companies actual cash flows to November 10, 2023;
3. The Monitor’s recommendation with respect to the amendments sought by the Applicants in connection with the ARIO:
   a.  Approve the BMO DIP Facility
   b.  Maintain the Administration Charge of $105,000;
   c.  Increase the DIP Charge to $1 million;
   d.  Maintain the Director’s Charge of $150,000; and
   e.  Extend the Stay Period to February 9, 2023;
4. The Monitor’s recommendations with respect to the Applicants’ request for the SISP Order.

The motion will be heard on November 17, 2023.

Status of the File as of November 15, 2023

On November 15, 2023, the Companies filed a motion with the Court for an order:

1. Amended and Restated Initial Order (the “ARIO”) to, among other things:
   a. Extend the Stay Period to and including February 9, 2024;
   b. Increase the Administration Charge (as defined in the Initial Order and the ARIO) to $200,000;
   c. Approve the Debtor-in-Possession Financing Term Sheet between the Applicants and the Bank of Montreal (BMO) and authorize the Applicants to borrow an amount not exceeding $1million (the “BMO DIP Facility”);
   d. Authorize and direct the Monitor to make a distribution to Gray, the DIP Lender, from funds available under the BMO DIP Facility, $270,000 plus any accrued interest, and that following the payment the DIP Lender’s Charge shall be terminated, released and discharged;
   e. Grant a charge on the Property of the Companies, ranking in priority to all Encumbrances (as defined in the ARIO), except the Administration Charge, in the maximum amount of $1 million (the “BMO DIP Charge”);
   
   
2. And an order (the “SISP Order”) to, among other things:
   a. Approve a sale and investment solicitation process (“SISP") in respect of the business and assets of HGOE and parcels of land owned by Laurenceton;
   b. Seal confidential exhibits “1”, “2” and “3” to the Affidavit of Paul Lannon, sworn November 14, 2023, included in this motion; and
   c. Approve the Pre-Filing Report of PwC.

The motion will be heard on November 17, 2023.

Status of the File as of November 14, 2023

On November 14, 2023, the Monitor filed its First Report (the “First Report”) with the Court, to inform the Court on:

1. The activities of the Company and the Monitor since the Filing Date;
2. An update on the CCAA Proceedings and the Monitor’s views on the revised short-term cash forecast for the Companies, to support the Applicants’ request for an adjournment of the Comeback Hearing, resulting in the extension of the Stay Period up and including November 16, 2023  to secure alternate DIP financing.

Status of the File as of November 3, 2023

On November 2, 2023 (the “Filing Date”), Harbour Grace Ocean Enterprises Ltd. (“HGOE”) and Laurenceton Holdings Ltd. (“Laurenceton”, and collectively with HGOE, the “Companies” or the “Applicants”) applied for and received an order (the “Initial Order”) for creditor protection pursuant to the Companies’ Creditors Arrangement Act R.S.C.1985, c.C-36, as amended (“CCAA Proceedings”) from the Supreme Court of Newfoundland and Labrador in Bankruptcy and Insolvency (the “Court”).

The Initial Order, among other things:

1. Appointed PricewaterhouseCoopers Inc., LIT (”PwC”) as monitor of the Applicants (the “Monitor”);
2. Approved a stay of proceedings up to and including November 14, 2023 (“Stay Period”), which applies against the Applicants or the Monitor, or the Applicants’ Property and Business (as defined in the Initial Order), or against any of the former, current or future directors or officers of the Companies;
3. Authorized the Applicants to continue to use the central cash management system (“CMS”) currently in place or replace it with another substantially similar CMS;
4. Granted a first ranking charge, in the amount of $105,000 (the “Administration Charge”), on the Property of the Applicants, as security for the professional fees and disbursements of the Monitor, the Monitor’s counsel and the Applicants’ counsel, which charge shall rank in priority to all other security interests, trusts, liens, charges and encumbrances, claims of secured creditors, statutory or otherwise (the “Encumbrances”);
5. Authorized the Applicants to borrow under a credit facility from Gray Enterprises Ltd. (“Gray” or the “DIP Lender”) in order to finance the Companies’ working capital requirements and other general corporate purposes and capital expenditures, provided that borrowings under such credit facility shall not exceed $255,000 (the “DIP Facility”), unless permitted by further order of this Court; and
6. Granted a second ranking charge in favour of the DIP Lender over the Property of the Companies to a maximum amount of $255,000, as security for the DIP Facility (the “DIP Lender’s Charge”), which charge shall rank in priority to the Encumbrances; and
7. Granted a third ranking charge, in the amount of $150,000 (the “Directors’ Charge”), on the Property of the Applicants, as security for the indemnity granted to the Applicants’ directors and officers, which charge shall rank in priority to the Encumbrances.

In accordance with section 23 (1)(ii)(b) of the CCAA and the Initial Order, on November 8, 2023, a notice of the CCAA Proceedings was sent to all of the Applicants’ creditors who are owed $1,000 or more.