Ontario · CCAA
First Report of the Former Monitor (EY)
Court officer report · 29 December 2023
Also filed as: First Report of the Monitor, dated December 29, 2023
A plain-language read of this filing opens with a subscription.
What we verified from this filing10 verified
- financial positionnote: NO BALANCE SHEET IS STATED. What the report gives are per-entity secured totals, each of which its own components sum to exactly: Trees $1,657,500 ($469,500 + $44,000 + $1,144,000), OCH $2,210,000 ($900,000 + $1,310,000), Ontario Consulting $9,500,000 ($900,000 + $8,600,000). Those totals are NOT added together here — $900,000 of OCH's is a guarantee of Ontario Consulting's own $900,000, and $8,600,000 of Ontario Consulting's is owed to Trees, a co-applicant. EXCLUDED AS POST-FILING: the DIP Lender's Charge of $60,000 (sought to be increased to an $800,000 borrowing limit), the Administration Charge of up to $100,000 plus a Subsequent Administration Charge of $350,000, and the Directors' Charge sought at $483,000 — $100,000 of it super-priority, representing outstanding vacation pay, with $383,000 ranking behind the secured creditors. Court-ordered charges are not pre-filing capital structure. · page: 29 · basis: Pre-Filing Report of the Proposed Monitor, “as at the date of this Pre-Filing Report”; each entity's component amounts are stated as approximations and sum EXACTLY to the total the report states for that entity · scope: three filing entities stated separately — Trees, OCH and Ontario Consulting; the report gives no consolidated figure and none is computed here · currency: CAD
- secured creditorsnote: ENFORCING: “On December 15, 2023, Trees received demand letters and Notices of Intention to Enforce Security (“NITES”) from these secured debenture holders”. The Monitor “intends to review the security” and advise the Court at the comeback hearing, so the security is not yet confirmed. · page: 29 · amount: 469500 · debtor: Trees · creditor: PMH Investco Ltd., 606093 Saskatchewan Ltd., Minerva Investments Ltd. and Echo Capital Growth Corporation (secured debenture holders) · currency: CAD · security: secured convertible debentures, aggregate PRINCIPAL $210,000 bearing 58.8% per annum — the principal is not the balance; the outstanding amount is $469,500
- secured creditorsnote: REGULATORY / CROWN CLAIM in respect of unpaid provincial sales tax — a statutory charge ranking on its own terms, not ordinary security, and a reader sizing the stack needs it named as such. · page: 30 · amount: 44000 · debtor: Trees · creditor: Ministry of Finance of British Columbia · currency: CAD · security: Crown charge pursuant to the Provincial Sales Tax Act (British Columbia)
- secured creditorsnote: CONTINGENT SECURED LIABILITY, and contingent on a specific trigger: “Trees owes such amount upon a change of control of Trees.” Stated separately from, and additional to, the $1,657,500 of current secured debt. · page: 30 · amount: 1000000 · debtor: Trees · creditor: Profit participation counterparty (not named) · currency: CAD · security: a profit participation agreement
- secured creditorsnote: THE SAME DEBT AS THE ONTARIO CONSULTING ENTRY BELOW, in a different capacity — OCH is guarantor, Ontario Consulting is primary obligor. Both are recorded because the report states both and a reader of either entity needs it; they are ONE $900,000 obligation, not two. · page: 30 · amount: 900000 · debtor: OCH (as guarantor) · creditor: Tweed Franchise Inc. · currency: CAD · security: guarantee of Ontario Consulting's secured convertible promissory note, principal $3,000,000 at 8.5%
- secured creditorsnote: MATURED AND ENFORCING: “On December 21, 2023, Trees received a demand letter and NITES from these secured debenture holders”. Security subject to the Monitor's review at the comeback hearing. · page: 30 · amount: 1310000 · debtor: OCH · creditor: CJ Marketing Ltd. and Arthur Minh Tri Nguyen-Cao · currency: CAD · security: secured grid promissory notes, aggregate PRINCIPAL $830,000 at 15% per annum; outstanding $1,310,000; the loan matured January 1, 2023
- secured creditorsnote: The primary obligation guaranteed by OCH above — one debt, two capacities, both as the report states them. · page: 30 · amount: 900000 · debtor: Ontario Consulting (primary obligor) · creditor: Tweed Franchise Inc. · currency: CAD · security: secured convertible promissory note, principal $3,000,000 at 8.5% per annum, matured March 11, 2023; outstanding $900,000
- secured creditorsnote: RELATED PARTY IN PART, on the document's own words: “Some of the noteholders are non-arms length to the Applicants.” The report does not name them. · page: 30 · amount: 1144000 · debtor: Trees · creditor: Secured convertible noteholders (not individually named) · currency: CAD · security: secured convertible promissory notes, aggregate PRINCIPAL $1,005,000 at 12% per annum; outstanding $1,144,000
- secured creditorsnote: INTERCOMPANY, AND BETWEEN TWO APPLICANTS — “The secured note holder is Trees.” This is the largest single secured amount in the group and it is owed by one filing entity to another, so it nets out at the group level while remaining a real charge on Ontario Consulting. Note the outstanding balance is more than six times the principal, the note having matured in March 2021. · page: 31 · amount: 8600000 · debtor: Ontario Consulting · creditor: Trees Corporation · currency: CAD · security: secured grid promissory notes, PRINCIPAL $1,300,000 at 8.5% per annum, matured March 1, 2021; outstanding $8,600,000
- unsecured creditorsnote: STATED TO EXIST, NOT QUANTIFIED: “In addition to the foregoing secured obligations, the Applicants are also subject to numerous unsecured obligations, as set out in more detail in the Holmgren Affidavit” — which is not among these pages. The report adds that “certain unsecured creditors … have obtained judgments against one or more of the Applicants.” No figure is given here. · page: 31 · basis: Pre-Filing Report of the Proposed Monitor, “as at the date of this Pre-Filing Report”; each entity's component amounts are stated as approximations and sum EXACTLY to the total the report states for that entity · debtor: the Applicants · creditor: Unsecured creditors (not quantified in this report) · currency: CAD