GreenSpace Brands Inc., 1052532 B.C. Ltd., Central Roast Inc. and Life Choices Natural Food Corp.

Bankruptcy

Page last updated: November 27, 2023

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.

On September 26, 2023, the Court issued the CCAA Distribution and Termination Order which, among other things, authorized PricewaterhouseCoopers Inc., LIT (“PwC”), in its capacity as Monitor to (i) assign GreenSpace Brands Inc. 1052532 B.C. Ltd., Central Roast Inc., Life Choices Natural Food Corp., GSB Investment Corp., 2047480 Ontario Inc. and The Cold Press Corp. (the “Companies”) into bankruptcy, (ii) send one Notice of Bankruptcy and the First Meeting of Creditors (“First Meeting”), and (iii) conduct a joint First Meeting.

On November 22, 2023, pursuant to the provisions of the Bankruptcy and Insolvency Act (Canada) (“BIA”) and the CCAA Distribution and Termination Order, the Companies were assigned into bankruptcy and PwC was appointed as licensed insolvency trustee (the “Trustee”) of the bankrupt estates of the Companies by the official receiver, subject to affirmation by the creditors of the Trustee's appointment or substitution of another trustee by the creditors.

The First Meeting will be held virtually at the following date and time using the Google Meet platform:

Date and Time: December 8, 2023 at 10:00 a.m. (EST)

Link: https://meet.google.com/jsg-fpyi-cyy

Participants who do not have a Google account may join the First Meeting via phone:

Dial-in phone number: +1 862-259-5910

PIN: 544 782 706#

The Notice of Bankruptcy and the First Meeting of Creditors will be issued to all known creditors of the Companies in accordance with the BIA.

Status of file as of September 26, 2023

On September 26, 2023, the Court issued the CCAA Distribution and Termination Order which, among other things:

1. Authorized the Companies and/or the Monitor to make distribution(s) to Mill Road;
2. Approved the Monitor’s Third Report and the activities of the Monitor described therein;
3. Approved the fees and disbursements of the Monitor and its legal counsel;
4. Terminated the CCAA Proceedings upon filing of the Monitor its Termination Certificate (“CCAA Termination Time”);
5. Allowed certain consolidation procedures with respect to the statutory requirements in bankruptcy of any of the Applicants or their affiliates; and
6. Extended the Stay Period to the earlier of the CCAA Termination Time or other date the Court may order.

Status of file as of September 21, 2023

On September 20, 2023, the Monitor, filed its Third Report with the Court, to provide the Court with information with respect to:

1. The activities of the Applicants and the Monitor since the date of the Second Report;
2. Update on the Love Child Transaction and post-closing matters;
3. Update on the Central Roast Transaction;
4. Update on Galaxy Nutritional Foods Inc. (“Galaxy”);
5. Update on wind down activities of the Applicants and their affiliates;
6. The Applicants’ actual cash flows for the period of June 3, 2023 to September 8, 2023, as compared to the cash flow forecast included in the Second Report;
7. A cash flow forecast for the period of September 9, 2023 to the CCAA Termination Time; and
8. The Applicants’ motion for the CCAA Distribution Termination Order.

Status of file as of September 19, 2023

On September 19, 2023, the Companies filed a motion with the Court for an order (the “CCAA Distribution and Termination Order") to, among other things,

1. Authorize the Companies and/or the Monitor to make distribution(s) to MW1 LLC (“Mill Road”), the secured creditor;
2. Approve the Monitor’s Third Report to the Court (to be filed) (the “Third Report”) and the activities of the Monitor described therein;
3. Approve the fees and disbursements of the Monitor and its legal counsel;
4. Terminate the CCAA Proceedings;
5. Allow certain consolidation procedures with respect to the bankruptcy of any of the Applicants or their affiliates; and
6. Extend the Stay Period to the earlier of the date on which the Monitor files its CCAA Termination Certificate with the Court or other date the Court may order.

The motion will be heard on September 26, 2023.

Status of File as of July 10, 2023

Following the Love Child Transaction Love Child (Brands) Inc. was removed from and 1052532 B.C. Ltd. was added to these CCAA Proceeding.

Status of File as of July 4, 2023

The Love Child Transaction closed on June 30, 2023. The Monitor’s Certificate to that effect is posted on the Court Orders page of this website.

Status of File as of June 13, 2023

On June 12, 2023, the Monitor filed its Second Report with the Court to provide the Court with the information on:

1.    The activities of the Applicants and the Monitor since the date of the First Report;

2.    The results of the SISP;

3.    The proposed sale of the Love Child business and the Applicants' motion for the Love Child AVO;

4.    The Applicants’ motion for the Contracts Assignment Order;

5.    The proposed transaction between Central Roast and HBD for certain assets of Central Roast and the Applicants’ motion for the Central Roast AVO;

6.    The Applicants’ actual cash flows for the period from April 1, 2023 to June 2, 2023 as compared to the forecast cash flows for the same period, contained in the cash flow forecast included in the Pre-Filing Report;

7.    An extended cash flow forecast for the period from June 3, 2023 to September 29, 2023, prepared in connection with the Applicants' request for an extension of the Stay Period to September 29, 2023; and

8.    The Applicants’ motion for the Ancillary Relief Order.

Status of File as of June 12, 2023

On June 11, 2023, the Applicants filed their motion for

1.    An Approval and Vesting Order (the “Love Child AVO”), among other things, approving the sale transaction (the “Love Child Transaction”) contemplated by the Asset Purchase Agreement dated as of June 9, 2023, between Nature’s Path Foods Inc., as buyer (“Love Child Purchaser”), and Greenspace, Love Child, as sellers (together, the “Sellers”);

2.    An order (the “Contract Assignment Order”) among other things, assigning the rights and obligations of the Sellers under certain transferred contracts;

3.    An Approval and Vesting Order (the “Central Roast AVO”), among other things, approving the sale transaction (the “Central Roast Transaction”) contemplated by the Asset Purchase Agreement dated as of June 9, 2023 (the “Central Roast Purchase Agreement”), between The Health and Beauty Distributor Inc., as buyer (“HBD”), and Central Roast, as seller; and

4.    An order (the “Ancillary Relief Order”), among other things

a.    Extending the Stay Period to and including September 29, 2023;

b.    Relieving Greenspace, nunc pro tunc, of the obligation to call and hold an annual meeting of shareholders;

c.    Declaring that, following delivery of the Monitor’s certificate contemplated by the Love Child AVO, the Wage Earner Protection Program Act (Canada) (“WEPPA”) applies to these CCAA Proceedings;

d.    Deeming the directors of the Applicants to have resigned from their positions with the Applicants effective upon delivery of the Monitor’s certificate contemplated by the Love Child AVO;

e.    Authorizing the Applicants to make certain distributions from the net proceeds from the Love Child Transaction to Pivot Financial I Limited Partnership (“Pivot”) in respect of the DIP Facility and amounts outstanding under the Pivot Credit Agreement and the Pivot Factoring Agreement;

f.     Approving the Amended KERP and approving a corresponding increase to the KERP Charge to $150,000 to reflect the maximum amount payable under the Amended KERP;

g.    Releasing the KERP Charge, Transaction Fee Charge and the DIP Lender’s Charge upon completion of the relevant payments of the amounts secured thereby;

h.    Approving the First Report and the Second Report of the Monitor, dated June 12, 2023 (the “Second Report”) and the activities of the Monitor described in such reports;

i.      Approving the fees and disbursements of the Monitor and its counsel as described in the Second Report and the affidavits attached thereto; and

j.      Sealing the confidential appendix to the Second Report until further Order of the Court.

The motion will be heard on June 15, 2023.

Status of File as of April 14, 2023

On April 14, 2023, the Court issued the

1.     The Amended and Restated Initial Order which, among other things:

a.     Extended the Stay Period to and including June 16, 2023;

b.     Increased the maximum principal amount that the Applicants can borrow under the DIP Facility to $2.6 million;

c.     Increased the amount of (i) the Administration Charge to $550,000; (ii) the Directors’ Charge to $160,000; and (iii) the DIP Lender’s Charge to 2.6 mln.;

d.     Approved the KERP;

e.     Granted a third ranking charge over the Property of the Applicants in favour of the KERP beneficiaries, to a maximum amount of $100,000, ranking behind the Directors’ Charge;

f.       Authorized the Applicants to permanently or temporarily cease, downsize or shut down any of its business or operations, and to dispose of redundant or non-material assets not exceeding $100,000 in any one transaction or $250,000 in the aggregate; and

g.     Sealed the confidential appendix to the First Report of the Monitor until further Order of the Court; and

2.     The SISP Approval Order which, among other things:

a.     Approved the SISP and authorized the Applicants and the Monitor to implement the SISP;

b.     Authorized GreenSpace and Love Child, as sellers, to enter into the Stalking Horse Agreement with Pivot, by its general partner 2862454 Ontario Inc., on behalf of an entity to be formed, as buyer;

c.     Authorized the Applicants to use the Stalking Horse Agreement as the “stalking horse bid” in the SISP; and

d.     Approved the Transaction Fee and granted the Transaction Fee Charge over the Property of the Applicants in the maximum amount of $150,000 in favour of the Staking Horse Bidder as security for payment of the Transaction Fee, ranking behind each of the charges.

Status of File as of April 13, 2023

On April 12, 2023, the Monitor filed its First Report with the Court (the “First Report”) to provide the Court with information regarding:

1. The activities of the Applicants and the Monitor since the Filing Date;
2. The Monitor’s views in connection with the proposed Amended and Restated Initial Order; and
3. The Monitor’s views in connection with the proposed SISP Approval Order.

Status of File as of April 11, 2023

On April 10, 2023, the Applicants filed their motion with the Court for

1.     An order (the “Amended and Restated Initial Order”) to, among other things:

a.     Extent the Stay Period to and including June 16, 2023;

b.     Increase the maximum principal amount that the Applicants can borrow under the DIP Facility to $2.6 million;

c.     Increase the amount of (i) the Administration Charge to $550,000; (ii) the Directors’ Charge to $160,000; and (iii) the DIP Lender’s Charge to 2.6 mln.;

d.     Approve the Key Employee Retention Plan (the “KERP”) and authorize the Companies to make payments in accordance with the KERP;

e.     Grant a charge over the Property of the Applicants in favour of the proposed KERP beneficiaries (the “KERP Charge”), to a maximum amount of $100,000, ranking behind the Directors’ Charge; and

f.       Seal the confidential appendix to the First Report of the Monitor (to be filed with the Court) until further Order of the Court; and

2.     For a sale and investment solicitation process approval order (the “SISP Approval Order”) to , among other things:

a.     Approve the sale and investment solicitation process (the “SISP”) and authorize the Applicants to conduct the SISP with the assistance of the Monitor;

b.     Authorize GreenSpace and Love Child, as sellers, to enter into the Asset Purchase Agreement (dated April 5, 2023 (the “Stalking Horse Agreement”) with Pivot, by its general partner 2862454 Ontario Inc., on behalf of an entity to be formed, as buyer (in such capacity the “Stalking Horse Purchaser”);

c.     Authorize the Applicants to use the Stalking Horse Agreement as the “stalking horse bid” in the SISP; and

d.     Grant a charge over the Property of the Applicants in the maximum amount of $150,000 in favour of the Staking Horse Bidder as security for payment of a transaction fee as consideration for the time and effort spent in negotiating the Stalking Horse Agreement and serving as the Stalking Horse Bidder (the “Transaction Fee Charge”), ranking behind each of the charges.

The motion will be heard on April 14, 2023.