VAUGHAN, ON, October 19, 2022 /PRNewswire/ – CannTrust Holdings Inc. (the “Company” or “CTH”), a minority investor in Phoena Holdings Inc. (“Phoena”, formerly CannTrust Equity Inc.) announced today that it has made a proposed division I in accordance with the Bankruptcy and Insolvency Law (Canada) (The Proposal”). Phoena’s operations are not affected by the restructuring of CTH.
Following its press release of July 7, 2022CTH intended to hold its Annual General Meeting on or before November 30, 2022. However, in order to hold such an annual meeting, CTH would be required, among other things, to prepare audited financial statements. CTH has determined that it is not possible to complete the audit and other work necessary to hold an annual general meeting before November 30, 2022. In these circumstances, CTH believes it is in the best interest of its stakeholders to make a proposal to its creditors under the BIA.
The proposal is being funded by Phoena, with backing from Phoena’s largest shareholder, Marshall Fields Holdings, a wholly owned subsidiary of Kenzoll BV, a Netherlands private equity based company. Phoena’s operations are not affected by the restructuring of CTH. The proposal is also supported by CTH’s lenders.
Subject to the satisfaction of certain conditions, including creditors’ approval and obtaining a court order approving the proposal, CTH intends to settle its remaining debts, dispose of its assets residuals, to distribute its shares in Phoena and to dissolve before November 30, 2022 or as soon as possible after that date.
CTH intends to distribute the shares it holds in Phoena to its existing shareholders, provided that (i) shareholders are required to hold at least 10,000 common shares of CTH in order to qualify for a share distribution ordinaries of Phoena; and (ii) any distribution of Phoena Shares to a holder of CTH Shares who is a Non-Canadian Person or a United States Person will be subject to CTH obtaining notice of a qualified and independent securities adviser that this distribution is exempt from any obligation to prepare, file or deliver a prospectus or similar document. The Company limits the distribution of its Phoena Holdings shares to holders or owners of at least 10,000 shares of CTH common stock so that distribution costs do not significantly exceed the value of the Phoena shares being distributed. When Phoena completed its private placement with Marshall Fields Holdings and the other strategic investors in March 2022, common shares were issued to them at a price of approximately $0.009 per share, implying that 10,000 shares had a value of $90.
Only CTH creditors with proven claims (after submitting a proof of claim in accordance with the claims procedure) will be entitled to attend the meeting of creditors, vote on the resolution to approve the proposal and participate any distribution contemplated by the proposal. For more details on the claims procedure, time and place of the meeting of creditors and/or to obtain a proof of claim form and a copy of the claim file, please visit the trustee’s website. the proposal to http://www.ey.com/ca/canntrust. The Proposal Administrator will post additional relevant information and documents related to these procedures on its website as they become available.
The hearing date for court approval of the proposal will be set after the meeting of creditors, if the proposal is approved by the creditors at the meeting of creditors. Details of the hearing date will be posted on the Proposal Trustee’s website as they become available. Anyone wishing to support or oppose the relief sought at the approval hearing may serve court documents on the service list setting out the reasons for their support or opposition and/or attend the hearing. After reviewing the court documents filed by the proposal trustee, CTH and any other person, and hearing submissions from those present at the hearing, the court may approve the proposal and any other relief requested by CTH. If approved by the Court, CTH will then proceed to implement the Proposal.
Phoena continues to explore strategic options to generate cash for its shareholders. Council deliberations are ongoing and progressing, but there is no guarantee that Phoena will ultimately be successful.
About CannTrust Holdings Inc.
It is a holding company and its core asset is an approximately 10% stake in Phoena. Although CannTrust is a reporting issuer under the laws of each of the Canadian provinces, except Quebecit remains subject to the CTO and its common shares have been delisted from the Toronto Stock Exchange and the New York Stock Exchange.
Phoena is an award-winning, federally regulated cannabis producer, with locations in Vaughan and Fenwick, Ont.. Phoena operates a portfolio of brands, including estora, Liiv, SYNR.G and Xscape.
Phoena is committed to providing an exceptional customer experience, quality and consistent products. Phoena’s greenhouse produces Grade A cannabis flowers, which are sold in a variety of dried flower and extract formats.
Phoena creates cannabis products that meet the diverse needs of patients and consumers, promoting positivity, supporting creativity and inspiring confidence.
Phoena, empowers you every day.
Learn more at Phoena.com
This press release contains “forward-looking information” within the meaning of Canadian securities laws and “forward-looking statements” within the meaning of the United States Private Securities Litigation Reform Act of 1995 and other applicable laws. United States safe harbor laws, and such statements are based on CannTrust’s current internal expectations, estimates, projections, assumptions, beliefs and opinions about future events.
Forward-looking information and forward-looking statements can be identified by the use of forward-looking terms such as “believes”, “expects”, “likely”, “may”, “will”, “should”, “should”. intention”, “anticipate”, “potential”, “proposed”, “estimate” and other similar words, including negative and grammatical variations thereof, or statements that certain events or conditions “could”, “would” or “will” will occur, or through discussions of strategy.
Forward-looking information and statements in this press release include statements relating to CTH’s efforts to implement a proposal under the BIA and Phoena’s exploration of strategic options to generate cash for its shareholders. Forward-looking information and statements necessarily involve known and unknown risks, including, but not limited to: the risk that, if Phoena needs additional capital, the Company’s investment in Phoena may be further diluted; the risk that Phoena or its affiliates default under the credit facilities of Cortland Credit Lending Corporation or Marshall Fields International BV, which are secured by substantially all of the assets of Phoena and the Company; the risk that the Company may not be able to obtain an order approving the Court’s proposal or complete the proposed restructuring; the impact of any regulatory and other investigations or proceedings; risks associated with general economic conditions and/or adverse industry events; the risk of losing markets; the risk of future legislative and regulatory developments Canada, United States and elsewhere; the state of the cannabis industry in Canada in general; Phoena’s ability to attract and retain suitable directors, officers and employees; the risks that Phoena may not be able to satisfy the requirements of a stock exchange to obtain a listing or complete a strategic transaction; and Phoena’s ability to successfully implement its business strategies.
All forward-looking information and statements speak only as of the date they are made and, except as required by law, neither the Company nor Phoena undertakes to update or revise any forward-looking information or statements. , whether as a result of new information, future events or otherwise. New factors emerge from time to time and it is not possible for the Company or Phoena to predict all of these factors. When reviewing such forward-looking information and statements, readers should keep in mind the risk factors and other cautionary statements contained in the Company’s Annual Information Form dated March 28, 2019 (there “FIA“) and filed with the relevant Canadian securities authorities on SEDAR at www.sedar.com and filed as an attachment the company’s annual report on Form 40-F under the United States Securities Exchange Act of 1934, as amended, with the United States Securities and Exchange Commission on EDGAR at www.sec.gov (there “March 2019 Form 40-F”). The risk and other factors disclosed in the AIF could cause actual events or results to differ materially from those described in the forward-looking information or statements. We also remind readers that the Company remains in default of its periodic disclosure requirements under applicable securities laws and stock exchange requirements, that its most recent Annual Information Form, Form 40-F and other information does not reflect all of the risk factors currently facing the company, and that the company has not completed or filed the restatements of the financial statements included in the annual information form or the March 2019 Form 40-F or otherwise filed an amendment to such Form 40-F, and that the company was permitted by the original order of the Superior Court of Justice not to correct its prior filings or file other documents in this regarding periodic disclosure requirements under applicable securities laws and stock exchange requirements. None of the Company’s securities are listed on a stock exchange in any jurisdiction and, in Canadatrading in the Company’s securities is subject to a cease trade order issued on April 13, 2020 by the Ontario Securities Commission for CannTrust’s failure to meet its disclosure obligations under applicable securities laws.
Show original content to download multimedia:https://www.prnewswire.com/news-releases/canntrust-holdings-inc-makes-proposal-under-the-bankruptcy-and-insolvency-act-301654249.html
SOURCE CannTrust Holdings Inc.