Paystone: the owners buy it back

On the evening of August 21, staff at Paystone sent an email to certain of the company's customers and technology partners announcing "a strategic restructuring transaction that will position the business for continued growth and stability." The business would continue under its existing management team with a strengthened balance sheet, the notice said, and the buyer — 1001632600 Ontario Inc., which will do business going forward as Paystone Corp. — was described as "an entity controlled by Paystone's principals." It was signed by Tarique Al-Ansari, CEO, per Affidavit of Abdullah Saab, Aug. 22, 2026, paras. 18–19 and Exhibit "C".

The buyer is not new to this file. 1001632600 Ontario is the same numbered company, controlled by the same two principals — Mr. Al-Ansari and Abdullah Saab, Paystone's CFO — whose purchase of the business Justice Myers declined to approve on June 24, on the ground that in a balance-sheet insolvency the equity has no value and a management buyer was proposing to receive value anyway, per Endorsement of Justice Myers, June 24, 2026, paras. 5–9. What Justice Myers ordered instead was a sale process run by the Monitor. That process has now run. On August 27, Justice Dunphy approved the sale — to 100 Ontario — and signed the three orders implementing it as presented, per Endorsement of Justice Dunphy, Aug. 27, 2026, paras. 5, 10.

What the process found

The SISP launched on July 13, when the Monitor, AlixPartners Restructuring, Inc., sent a non-disclosure agreement to fourteen prospective purchasers — six strategic parties in the payment processing, reputation marketing and gift card spaces, eight financial parties including private equity firms — and published a press release in English and French on Canada Newswire that reached 12,000 recipients and generated 272 clicks. Nine parties signed the NDA and took access to the data room. All nine reviewed it. At a bidder's request the Monitor extended the bid deadline from August 4 to August 7, and by that deadline three bids had arrived, per Fifth Report of the Monitor, Aug. 21, 2026, paras. 5.0.4(b)–(h).

One was small: Street Bidder LLC offered $2.6 million in cash for the assets of the NiceJob reputation-marketing business alone, with a $260,000 deposit. Because the assets it wanted were assets the other bidders wanted too, the bid was not pursued, per Fifth Report, Aug. 21, 2026, para. 5.0.10(b) n.3 and Appendix "G".

The other two were for the whole business — roughly 38,000 customers, most of them small service businesses across Canada, running over 50 million transactions and more than $7 billion in gross merchant volume in the twelve months before the filing, per Fifth Report, Aug. 21, 2026, para. 2.1.1. One came from 100 Ontario. The other came from Shopley Inc., a company the Monitor understands is controlled by Steve Levely — a name already on the creditor ledger: Paystone issued subordinated promissory notes totalling approximately $4.35 million to Mr. Levely and a numbered company when it acquired Ackroo Inc., per Fifth Report, Aug. 21, 2026, para. 3.4.1.

The SISP was built so that a bidder could win without anyone's blessing: a proposal carrying enough cash to repay the senior secured debt in full needed no consent from Sandton at all. Any bid that instead proposed to assume that debt would need Sandton to agree, per Fifth Report, Aug. 21, 2026, para. 5.0.8. Neither bid carried the cash. Both asked Sandton to stay.

The bid that needed a yes

Sandton Investments X (Luxembourg) S.à r.l. holds the senior debt because it bought it. On May 8, weeks before the filing, the lending syndicate led by National Bank of Canada sold its position to Sandton, which closed the purchase on May 12; as of June 30 the Monitor understands Sandton was owed approximately $92.2 million under the senior facilities, with interest still accruing, plus $2.6 million funded under the DIP facility since, per Fifth Report, Aug. 21, 2026, paras. 3.1.2–3.1.4.

Shopley had arrived in June talking about cash. On June 21 it indicated it could fund a cash purchase price of $75 million and would provide a letter confirming the liquidity of its purchaser group; during the SISP it told the Monitor it intended to bid significant cash consideration. The bid that came in on August 7 was different: cash for the priority payables, the cure costs, the wind-up reserve and the amounts secured by the DIP lender's charge — and, for the rest, the assumption of both the Sandton debt and BDC Capital's subordinated loan, per Fifth Report, Aug. 21, 2026, paras. 5.0.10(d)–(f) and Factum of the Monitor, Aug. 24, 2026, para. 24. The assumption came with a sweetener, set out in the offer summary appended to the Fifth Report: discounts for early payout, sliding from 25% if Sandton were taken out inside twenty-four months down to 45% — $50.8 million on the $92-million-plus position — if paid inside ninety days, with a parallel ladder for BDC, per Fifth Report, Aug. 21, 2026, Appendix "G". Shopley's deposit, at $3 million, was more than eight times the successful bidder's.

None of it mattered, because a senior secured creditor cannot be made to accept a treatment of its debt it has not agreed to — a proposition for which the Monitor's factum cites Justice Myers' own June endorsement in this case: the Court cannot "make [Sandton] do what it does not want to do," per Factum of the Monitor, Aug. 24, 2026, para. 25 and n.24. Sandton told the Monitor it was not prepared to keep roughly $92 million of secured exposure to the business under new ownership and new management, and would not assume the business and credit risks that came with them. For 100 Ontario's bid it had already done the opposite work: underwritten the existing management team and obtained internal credit approval to continue its exposure under the ownership structure that team proposed, per Fifth Report, Aug. 21, 2026, paras. 5.0.10(f)–(g).

That left one bid capable of closing. The Monitor selected it, and was explicit about the controls that separated this transaction from the one refused in June: the process was run exclusively by the Monitor, all bidder contact ran through it, and no detail of any bid or bidder was shared with anyone connected to 100 Ontario, per Fifth Report, Aug. 21, 2026, paras. 5.0.5–5.0.6, 6.3.1. BDC — whose opposition helped sink the June transaction, and whose loan, approximately $12.9 million as of June 30, is not assumed under the winning bid — advised the Monitor it does not oppose, per Fifth Report, Aug. 21, 2026, paras. 3.2.2, 5.0.10(j) and Appendix "G".

What the purchaser pays, and what it inherits

The asset purchase agreement is dated August 18. The consideration has three parts: cash to the Monitor sufficient to satisfy the priority payables and pay the cure costs on assigned contracts — cure costs the Monitor understands run to approximately $3,575,777.60, paid to unsecured counterparties; a $350,000 wind-up reserve for the professionals who will finish the CCAA proceeding; and payment in full of the Sandton obligations, both DIP and senior facilities, "satisfied" by 100 Ontario entering into a new credit agreement with Sandton on substantially similar terms to the old one, per Fifth Report, Aug. 21, 2026, paras. 6.0.1(c), (m), 6.3.1(i). Justice Dunphy's endorsement describes that last mechanism with a precision worth preserving: the purchaser will "pay the senior secured creditor in full (in part from the proceeds of financing to be provided by the same senior secured creditor)," per Endorsement of Justice Dunphy, Aug. 27, 2026, para. 4.

Two smaller terms carry more history than their size suggests. The deposit is $350,000 — paid to the sellers before this APA was ever signed, under the asset purchase agreement of June 5 that Justice Myers refused to approve; it survives into the new deal as the wind-up reserve, per Fifth Report, Aug. 21, 2026, para. 6.0.1(d). And closing is conditional on the principals being released from their joint and several limited personal guarantees of certain of the Sandton obligations — with new guarantees to be given under the new credit agreement, per Fifth Report, Aug. 21, 2026, para. 6.0.1(n). Substantially all employees are to be offered employment on substantially similar terms no later than two business days before closing, per Fifth Report, Aug. 21, 2026, para. 6.0.1(l).

The sellers keep almost nothing, including their names. Within ten business days of closing each must change its legal name to something that does not include "Paystone", "Atom Growth" or "Atom", and the title of these proceedings will be amended to match, per Fifth Report, Aug. 21, 2026, para. 6.0.1(o) and Approval and Vesting Order, Aug. 27, 2026, paras. 10–11.

The Saab affidavit, and the contracts that could not wait

Mr. Saab's affidavit — sworn August 22 by a deponent the first line places in the City of London, where Paystone's own contract templates put its head office at 3200 Wonderland Road South — exists to solve a timing problem, per Affidavit of Abdullah Saab, Aug. 22, 2026, para. 1 and Exhibit "B". The purchaser wants every customer contract to come across; the applicants' review found that only a limited number require customer consent to assign. The technology and integration partner contracts need no consent at all, but every one of them requires thirty days' notice — and the APA's outside date, September 18, was less than thirty days away when the motion was served. The applicants are projected to have liquidity to operate only until that date without further DIP funding. So the purchaser, Mr. Saab deposes, "is not prepared to proceed without an Assignment Order," per Affidavit of Abdullah Saab, Aug. 22, 2026, paras. 10–15.

The Assignment Order Justice Dunphy signed does what the timeline demanded: on delivery of the Monitor's certificate, the assigned contracts move to the purchaser notwithstanding any provision requiring consent, or "notice for any period in advance," per Assignment Order, Aug. 27, 2026, para. 3. It carries its own safeguard — no assignment is effective against a counterparty that did not receive notice in the manner the Fifth Report describes, per Assignment Order, Aug. 27, 2026, para. 4 — and the affidavit is, in large part, the proof that notice happened: Mr. Saab instructed Paystone staff to email every assigned customer and partner on the evening of August 21, reviewed the issued notices, and confirmed delivery to the applicants' existing contact at each, per Affidavit of Abdullah Saab, Aug. 22, 2026, paras. 17–20. This is a file in which notice has been an issue before: on day one, Justice Myers criticized the applicants for giving BDC a few hours' informal notice of the first-day hearing, per Endorsement of Justice Myers, June 5, 2026, para. 4. The August record devotes a sworn affidavit, with the notices exhibited, to establishing who was told and when.

The list of those customers and partners is the one thing the court agreed to keep out of the record. The identities and contract terms went into a confidential exhibit, which Justice Dunphy sealed under the Sherman Estate test, finding the sealing "does not harm the openness principle in any tangible way" while disclosure could be materially detrimental to the value of the assets being conveyed and could place the transaction in significant jeopardy, per Endorsement of Justice Dunphy, Aug. 27, 2026, para. 8. No contractual counterparty appeared to object, although served, per Endorsement of Justice Dunphy, Aug. 27, 2026, para. 7.

Eighteen days

The related-party findings were made expressly. Justice Dunphy was satisfied that s. 36(3) and s. 36(4) of the CCAA were met: good faith efforts, led by the Monitor, to find non-related buyers, and consideration superior to any other offer received. He found the purchase price fair and reasonable, noted that no stakeholder appeared to oppose, and observed that the abbreviated timeline reflected both the applicants' liquidity constraints and the extensive canvassing of the market that had already happened before the filing, per Endorsement of Justice Dunphy, Aug. 27, 2026, paras. 2, 5–6.

Everything now converges on September 18. The stay of proceedings, which was to expire August 31, is extended to that date, per Ancillary Order, Aug. 27, 2026, para. 17. The DIP lender has agreed to move the DIP maturity from August 31 to the same day, which is also the APA's outside date, and the cash flow forecast shows the applicants can operate until then without drawing more, per Fifth Report, Aug. 21, 2026, paras. 7.0.3, 8.0.2(f). Closing happens when the Monitor delivers its certificate — which it may not do until, among other things, Sandton confirms in writing that the new credit agreement has been signed, per Approval and Vesting Order, Aug. 27, 2026, Schedule "A".

After that, management resigns, and the Monitor takes over what remains under enhanced powers granted by the Ancillary Order — corporate governance, disposal of residual property, dealings with any creditor, all without needing approval from officers or directors who will no longer be there, per Fifth Report, Aug. 21, 2026, paras. 9.0.2–9.0.3 and Ancillary Order, Aug. 27, 2026, para. 3. Justice Dunphy put the reason plainly: the debtors "will effectively be left rudderless and empty by completion of this transaction," per Endorsement of Justice Dunphy, Aug. 27, 2026, para. 9.

The companies that filed in June will spend September shedding their names while the business — the customers, the contracts, the employees, the brands — continues in London under the same two men, financed by the same lender, as Paystone Corp. What the sixty-four days between refusal and approval bought was the demonstration, at market, that nobody else would do better: fourteen prospects, nine data-room visitors, three bids, and one that could close. Justice Dunphy ended his endorsement by congratulating the parties on a thorough and well-run process conducted in difficult circumstances, per Endorsement of Justice Dunphy, Aug. 27, 2026, para. 10.