Marble, columns and stairs
May 1, 2020

McMillan acted for All Js Greenspace LLC (“All Js”) in its capacity as the DIP Lender and stalking-horse bidder in Green Growth Brands Inc.’s (“GGB”) proceedings under the Companies’ Creditors Arrangement Act (the “CCAA”). GGB is a U.S. Multi-State Operator that, like many other U.S. cannabis companies, went public on a Canadian exchange due to the status of cannabis as a Schedule I drug in the U.S.

At the end of 2019 and into 2020, GGB experienced substantial liquidity issues and subsequently defaulted on over US$100 Million of secured debt. All Js funded a DIP loan to support a Sale and Investor Solicitation Process (“SISP”) based on its stalking-horse bid in the form of a credit bid by All Js and the Indenture Trustee acting on behalf of the holders of certain of the secured debt (collectively, the “Purchaser”). The stalking-horse bid contemplated that the Purchaser would credit bid the entirety of the indebtedness held by certain debentureholders and assume or pay prior ranking claims. A dissenting debentureholder challenged the approval of the DIP loan and the SISP on various grounds.

The CCAA court ultimately approved the stalking-horse bid submitted by All Js and the Indenture Trustee (acting on behalf of the debentureholders).

This case is important for two reasons: (i) it confirmed that the trust indentures at issue permitted the special majority of holders (did not require unanimous consent) of the two series of debentures to reach a compromise and settlement as between themselves for the purposes of submitting the stalking horse bid and approving the DIP financing under their respective trust indentures; and (ii) since a dispute between two or more debentureholders under the trust indentures did not involve the CCAA debtor, such issues were inter-creditor disputes to be addressed in a different forum.

The McMillan team was led by Wael Rostom and included Stephen Brown-Okruhlik and Bruce Chapple.

McMillan’s Restructuring & Insolvency Group is one of Canada’s leading business insolvency groups. Our highly skilled team includes top-ranked lawyers known for their expertise and creative problem-solving, allowing McMillan to deliver the highest standards of transactional and structuring leadership, and commercial advocacy. We have advised on the restructuring, purchase and sale of businesses in a variety of industries. We regularly work with financially challenged companies, boards of directors, Canadian and US financial institutions, lending syndicates, bondholders, investors, ad hoc and official creditors’ committees, court-appointed officers and major customers and suppliers of insolvent companies. We provide our clients with successful outcomes and comprehensive solutions to the most challenging problems.