Adam Christie Maerov

The applicant, VBI Vaccines Inc., sought court approval for a sale transaction structured as a reverse vesting order (RVO) to its secured lender, K2 HealthVentures, as part of its CCAA insolvency proceedings.

The motion also sought collateral relief, including releases for various parties and the ability to sell residual assets up to $5 million without further court approval.

The court granted the motion, finding that the RVO was necessary and met the stringent Harte Gold factors, as well as the traditional Sound Air factors.

The RVO was deemed essential due to the debtor's highly regulated industry and the non-assignability of its intellectual property and government licenses, making it the only viable option to maximize value compared to a bankruptcy scenario.

The court also approved the releases and the limited authority to sell residual assets, noting the Monitor's support and the lack of opposition from stakeholders.

This endorsement concerns a motion brought by Pride Group Holdings Inc. and its affiliates (the Applicants) under the Companies' Creditors Arrangement Act (CCAA) for approval of a going concern transaction for Pride Group Logistics (PGL), a distinct business line.

The proposed purchasers included principals of the Applicants, leading the Court-appointed Monitor to undertake negotiations and carriage of the motion.

The Monitor, supported by the Applicants, their directors, employees, and some financiers (Daimler, Mitsubishi, Finloc, National Bank), recommended approval, arguing it offered a higher recovery than liquidation, preserved approximately 500 jobs, and avoided significant wind-down costs for the broader Pride Entities.

The transaction was opposed by certain secured lenders, including The Bank of Nova Scotia, The Lending Syndicate, TD Equipment Finance Canada, and RBC entities, who preferred a wind-down.

The court applied the factors under CCAA s. 36(3) and the Soundair Principles, finding the sale process reasonable, fair, and transparent.

The court concluded that the transaction was the only viable going concern option, superior to a wind-down, and consistent with the CCAA's purpose of avoiding social and economic losses from liquidation.

The PGL Going Concern Transaction was approved.