CAN (ON): Cannabis company files for bankruptcy

Eureka 93 has announced that the Board of Directors, after having reviewed strategic alternatives, resolved on February 14, 2020 to file a Notice of Intention to Make a Proposal (“NOI”) under Section 50.4(1) of the Bankruptcy and Insolvency Act, R.S.C 1985, c.B-3, as amended (BIA) for each of Eureka 93 Inc., Artiva Inc., LiveWell Foods Canada Inc., and Vitality CBD Natural Health Products Inc..  The Ontario Superior Court proposal motion hearing date was held on March 6, 2020, and the Order was signed and issued by the judge on March 12, 2020.

"As part of Eureka 93’s continuous disclosure requirements, this represents a material change effective February 14, 2020 wherein the listed company and certain Canadian related entities filed for court protection to undertake to prepare a proposal under the BIA," the team with the company explains. 

Eureka 93 Inc. et al.
​On February 14, 2020, Eureka 9, Artiva, LiveWell Foods Canada, and Vitality CBD Natural Health Products (the “Related Entities”) each filed a Notice of Intention to Make a Proposal (“NOI”) under Section 50.4(1) of the Bankruptcy and Insolvency Act, R.S.C 1985, c.B-3, as amended (“BIA”). Deloitte was appointed as Proposal Trustee (“Deloitte” or the “Trustee”) under each NOI.

The Proposal Motion Hearing was heard by the Ontario Superior Court of Justice (the “Court”) on March 6, 2020, and the Court approved the Proposal process to proceed under Section 50.4(1) of the BIA.

Pursuant to Section 69(1) of there BIA, the effect of filing an NOI is an automatic stay of proceedings (the “Stay”) against all creditors from continuing or commencing any actions against the Company. The Company had 30 days to file a Proposal to its creditors, or to seek an extension of the time from the Court to file a Proposal.  The Company received an extension from the Court to file a Proposal to its creditors by April 28, 2020, and can seek an extension of time if required.

"The Company is continuing to operate and maintain its business in the ordinary course during the NOI proceedings and the Trustee is required to monitor the Company’s business and affairs during the Stay and report any material adverse changes to the Office of the Superintendent of Bankruptcy and the Court," the team with the company explains.

"The Company has negotiated for new financing called “debtor-in-possession” or “DIP” financing to provide additional liquidity during the NOI proceedings for which it has sought and received Court Order approval on March 12, 2020. The Company has also sought and received Court approval for an administrative consolidation of its proposal proceedings with the Related Entities."

The NOI generally prohibits the Company from paying for goods and services that were received on or before the Filing Date and if you are owed monies for goods and services supplied on or before the Filing date, you will have an opportunity to file a Proof of Claim once a claims process is established. As part of the Proof of Claim process, creditors and suppliers at that time should provide invoices to the Trustee for goods and services delivered up to and including the Filing Date, and separate invoices for all goods and services delivered after the Filing Date.

Creditor and contributory ranking on a Debtor’s NOI under the BIA rank in the following order: Creditor claims have priority over shareholder claims. Secured creditors rank ahead of preferred and unsecured creditors other than for certain claims that are given priority under statute.

For more information:
Eureka 93
Tel: 819-718-2042
info@eureka93.com 
eureka93.com  


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