(MENAFN- ACCESSWIRE) Balboa Inc., DSPLN Inc., Happy Gilmore Inc., Interlude Inc., Multiville Inc., The Pink Flamingo Inc., Hometown Housing Inc., The Mulligan Inc., Horses In The Back Inc., Neat Nests Inc. and Joint Captain Real Estate Inc. Commence Proceedings Under the CCAA
TORONTO, ON / ACCESSWIRE / February 7, 2024 / Balboa Inc., DSPLN Inc., Happy Gilmore Inc., Interlude Inc., Multiville Inc., The Pink Flamingo Inc., Hometown Housing Inc., The Mulligan Inc., Horses In The Back Inc., Neat Nests Inc. and Joint Captain Real Estate Inc. (collectively, the "Applicants" or the "Company") announced today that they obtained an order (the "Initial Order") and an amended Initial Order (the "AIO") from the Ontario Superior Court of Justice (Commercial List) (the "Court") on January 23, 2024 and January 31, 2024, respectively, granting protection under Canada's principal restructuring statute, the Companies' Creditors Arrangement Act (the "CCAA"). The Company is not bankrupt and is not intending to liquidate its assets. The intention of the CCAA proceedings (the "CCAA Proceedings") is to complete a refinancing and/or restructuring of the Company's debt obligations.
Among other things, the Initial Order grants a stay of proceedings in favour of the Company, appoints KSV Restructuring Inc. as monitor (the "Monitor") in the CCAA Proceedings, and appoints Chaitons LLP as representative counsel to the Company's lenders in the CCAA Proceedings. The AIO approves a debtor-in-possession financing facility provided by Harbour Mortgage Corp. (the "DIP Facility"), the proceeds of which are to be used to pay property taxes, utilities and the operating costs of the Applicants during the CCAA Proceedings, among other expenses, and extends the stay of proceedings granted under the Initial Order.
The Applicants' decision to commence the CCAA Proceedings was made in consultation with the Company's advisors and after careful consideration of the Company's financial circumstances, strategic options and alternatives and the value destructive effects of a bankruptcy, liquidation or uncoordinated enforcement efforts by its many lenders.
In connection with the commencement of the CCAA Proceedings, the Applicants negotiated and entered into a Financial Advisor Agreement (the "FA Engagement Agreement") to retain Howards Capital Corp. as financial advisor to the Company (the "Financial Advisor"). The Financial Advisor was previously retained by certain of the Applicants in August 2023 to provide various financial advisory services and, as a result, has become familiar with the Company and its business. The Financial Advisor has extensive advisory, turnaround and management experience. The Monitor has worked with the Financial Advisor on multiple occasions in the context of formal insolvency proceedings. The Financial Advisor's principal, Howard Steinberg, is formerly a senior executive of several financial institutions and has been involved in numerous restructurings in that capacity. Mr. Steinberg has led or co-led the acquisition, renovation, financing and sale of approximately 614 residential properties in the State of Florida. The FA Engagement Agreement and the Financial Advisor's retention in the CCAA Proceedings remain subject to Court approval.
With the assistance of the Financial Advisor and the Monitor, and the benefit of the stay of proceedings and the DIP Facility, the Company intends to pursue a comprehensive refinancing and/or restructuring transaction capable of underpinning a plan of compromise or arrangement. The Applicants believe that the CCAA Proceedings and the implementation of a plan of compromise or arrangement therein present the best means of addressing the Company's debt obligations, maximizing value for the Company's stakeholders and enabling the Company to continue to operate and serve its valued tenants on a sustainable financial footing.
Additional Information
The Initial Order, the AIO and other information regarding the CCAA Proceedings are available on the Monitor's website at: .
About the Company
The Applicants, together with certain affiliates and SIDRWC Inc. o/a SID Developments, 2707793 Ontario Inc. o/a SID Renos and SID Management Inc., are part of a group of companies (collectively, the "Corporate Group") specializing in the acquisition, renovation and leasing of distressed residential real estate in undervalued markets throughout Ontario. Since inception, the Corporate Group has acquired, renovated, leased and/or sold over 800 underutilized and strategically located properties in Ontario, that provide in aggregate over 1200 rental units. The Applicants are the principal owners of the Corporate Group's rental units and the residential properties on which they are situated.
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