Court File and Parties

COURT FILE NO.: CV-24-00717340-00CL DATE: 20240409 ONTARIO - SUPERIOR COURT OF JUSTICE – COMMERCIAL LIST

IN THE MATTER OF THE COMPANIES' CREDITORS ARRANGEMENT ACT, R.S.C. 1985, c. C-3, AS AMENDED AND IN THE MATTER OF A PLAN OF COMPROMISE OR ARRANGEMENT OF PRIDE GROUP HOLDINGS INC. and those entities listed in Schedule "A" hereto

RE: Pride Group Holdings Inc., et al., Applicants

BEFORE: Peter J. Osborne J.

COUNSEL: Leanne Williams, Rachel Nicholson and Puya Fesharaki, for the Applicants Raj Sahni, for the Directors and Officers Olivia Mann-Foster, for Paccar Entities Jeffrey Levine, for Roynat Inc. and The Bank of Nova Scotia Stuart Brotman, for The Lending Syndicate Shaun Parsons, for TD Equipment Finance Canada John Salmas, for Bank of Montreal Marc Wasserman, Harvey Chaiton and Blair McRadu, for Mitsubishi HC Capital Brendan Bissell, for Versafinance US Corp. Edmond Lamek, for Triumph Business Capital Rania Hammad and Lee Nicholson, for MOVETRUST and Boat Capital LP Elaine Gray and Kim Gage, for Daimler Truck Financial Services Canada Corporation and Daimler Truck Financial Services USA LLC John MacDonald and Tracy Sandler, for RBC as Financial Service Agent Caroline Descours, for Regions Bank, Regions Equipment Finance Corporation and Regions Commercial Equipment Finance LLC Jamey Gage and Trevor Courtis, for Bennington Financial Corp. Heather Meredith, for National Bank of Canada Pamela Huff, Chris Bur, Daniel Loberto and Kevin Wu, for the Monitor, Ernst & Young Inc.

HEARD: April 5, 2024

Endorsement

[1] This is the comeback hearing directed by Chief Justice Morawetz in the Endorsement and Initial Order of March 27, 2024.

[2] The Applicants seek an amended and restated initial order (the “ARIO”) that, among other things:

a. extends the Stay Period to and including June 30, 2024; b. approves a debtor-in-possession (“DIP”) facility; c. elevates the priority of the Charges as described below; d. confirms that no person shall be entitled to set off amounts that are or may become due to any Pride Entity prior to the date of the Initial Order of March 27, 2024 with any amounts that are or may become due from any of the Pride Entities on or after the date of the Initial Order; and e. approves each of the Governance Protocol, the Real Estate Monetization Plan, and the Intercompany and Unsecured Claims Preservation Protocol.

[3] At the conclusion of the comeback hearing, I advised the parties that, notwithstanding the objections of certain parties discussed below who submitted that a shorter stay extension was appropriate, the requested stay extension to and including June 30, 2024 was granted, effective immediately, and that the DIP facility was approved, subject to one outstanding issue discussed below.

[4] Given the number of parties involved, and the pace at which this matter was proceeding, there were discussions ongoing between the Applicants on the one hand and certain of the Respondents on the other hand (with the assistance of the Court-appointed Monitor) as to other relief sought and/or with respect to the exact wording that the parties were requesting be captured in the ARIO.

[5] Accordingly, I directed the parties to continue those discussions, albeit for a very short period of time, with a view to narrowing or resolving the issues. I directed the Monitor to provide to me, by end of day yesterday, a revised form of draft order that included the additional language that had been agreed by the parties. I further directed that, to the extent that any issues remained outstanding, the Monitor was to identify those issues for me without further submissions from any party and I would determine those issues on the basis of submissions made at the hearing and the materials filed.

[6] Late yesterday, counsel to the Monitor provided to me a revised version of the ARIO reflecting my rulings made at the conclusion of the hearing last Friday (such as the approval of the requested stay extension) as well as additional language reflecting the input of the stakeholders provided over the weekend to which the Applicants agreed, and which the Monitor approved and recommended as being reasonable and appropriate in the circumstances.

[7] Finally, counsel to the Monitor provided to me proposed additional language to be included in the ARIO to which the Applicants and, importantly, the DIP Lender, did not agree, as follows:

a. counsel for Bennington and MOVE Trust proposed, with the support of a number of other securitization funders, an exception to the paramountcy provision in paragraph 53 of the draft ARIO to be captured with the addition of the following language after the words “notwithstanding any other provision of this Order”: except paragraphs 5, 12, 13, 13A and 14 in relation to Securitization Party Assets; and b. counsel to Triumph Business Capital requested that the DIP Charge be expressly subject to a carveout to be captured in paragraph 61 of the draft ARIO in respect of the assets of the Applicant, Arnold Transportation Services, in the amount of USD $3 million in favour of Triumph. Counsel to the Applicants (with the consent of the DIP Lenders and the recommendation of the Monitor) are agreeable to a carveout, but maintain the position advanced at the conclusion of the hearing last Friday following a brief adjournment in order for counsel to the DIP Lender to obtain instructions in this regard (at my request), that such carveout have a maximum of CDN $3 million.

[8] I will address in this Endorsement all of the relief sought by the Applicants.

[9] Defined terms in this Endorsement have the meaning given to them in the Endorsement of Chief Justice Morawetz dated March 27, 2024 or the motion materials, unless otherwise stated.

[10] The Applicants rely on the Affidavit of Randall Benson sworn April 2, 2024 together with Exhibits thereto, the Affidavit of Sulakhan Johal sworn March 26, 2024 together with Exhibits thereto, the Pre-Filing Report of the Monitor dated March 27, 2024, and the First Report of the Monitor dated April 4, 2024.

[11] The background to, and context of, this Application are fully set out in the Endorsement of the Chief Justice. However, additional events have transpired since that first hearing. As noted above, events continue to transpire, given the rapid pace of this proceeding.

[12] Pursuant to the Initial Order, the Applicants obtained creditor protection which included, among other things:

a. a stay of proceedings to and including April 6, 2024 in favour of the Applicants and the limited partnerships set out in Schedule “A” to the Initial Order (collectively, the “Pride Entities”), together with certain related companies and personal guarantors as described in the Initial Order; b. the appointment of Ernst & Young Inc. as the Court-appointed Monitor; c. the appointment of R.C. Benson Consulting Inc. as Chief Restructuring Officer and authorization for the CRO to act as foreign representative of the Pride Entities, including in respect of the proceedings commenced by the Applicants under Chapter 15 of the United States Bankruptcy Code; d. an order that the Pride Entities comply with the Governance Protocol which permitted them to continue selling trucks in the ordinary course of business, subject to the terms of that Governance Protocol; e. an order that service of the Notice of Application on any claimant who has filed a lien under the Repair and Storage Lien Act under the Personal Property Registry in any Canadian jurisdiction against any of the Pride Entities, together with the cover letter with directions to access the website of the Monitor, constituted sufficient service of this Application, and all future motions; and f. approval of the Administration Charge and the Directors’ Charge.

[13] On April 1, 2024, the CRO, in its capacity as foreign representative, filed a voluntary Chapter 15 petition for certain of the Pride Entities in the United States Bankruptcy Court for the District of Delaware seeking recognition of the Initial Order.

[14] For the reasons below, I am satisfied that the relief sought by the Applicants on this comeback hearing should be granted as set out in this Endorsement.

[15] The proposed stay extension to and including June 30, 2024 is necessary and appropriate in the circumstances to provide time for the continued operation of the business of the Pride Entities while the Applicants determine the appropriate next steps to be taken to further the necessary restructuring.

[16] No party opposed a stay extension. However, a number of Respondents submitted that a shorter stay extension, such as 30 days, should be granted. In my view, the requested stay extension is appropriate in the circumstances. I observe that June 30 is approximately six weeks away, with the result that the additional period of time in dispute is relatively modest: two – three weeks.

[17] Moreover, while there has clearly been a period during which there was a lack of transparency and visibility resulting in a corresponding lack of trust or confidence of various stakeholders in the Applicants (which is what underlies the request for a short extension), that period predated the commencement of this proceeding. This Court is now engaged in a supervisory role, and the Monitor will have a very active role as a Court officer, alongside the CRO.

[18] Among the overarching objectives of this proceeding, and those that are specifically sought to be advanced through the Governance Protocol discussed below, are to increase visibility, transparency and fairness. In my view, no party will be materially prejudiced by the extra two – three weeks requested, and the requested time will be necessary for the Applicants, with the assistance of the Monitor and CRO, to determine the sequence and timing of next steps in an efficient manner.

[19] As I observed to all present at the hearing of this motion, and while I intend to ensure the procedural and substantive fairness to all parties, it is imperative to minimize the number of Court attendances requiring the vast number of counsel, as were present at this hearing, in order that costs can be minimized and recoveries can be maximized. Moreover, given the recognition proceedings ongoing in the United States, any order approving a stay extension made by this Court would necessitate a recognition motion in the US proceeding, with associated time and expense required.

[20] I am satisfied that the Applicants and the Pride Entities have acted in good faith and with due diligence and continue to do so. I am also satisfied that, provided that the DIP Facility is approved, the Applicants will have sufficient liquidity to fund operations during the proposed extension period, all as reflected in the projected cash flows appended to the First Report. The Monitor supports the proposed stay extension.

[21] Accordingly, the stay extension is approved pursuant to subsections 11.02(2) and (3) of the CCAA.

[22] The DIP Facility is also approved. It is clear that the Pride Entities require interim financing to provide stability, continue going-concern operations and restructure their business. The DIP Facility has been negotiated by the Applicants, in consultation with the Monitor and the CRO, in the maximum principal amount of $30 million, with the Royal Bank of Canada, on behalf of itself and as Agent to the Syndicate Lenders (the “DIP Agent”), all pursuant to the DIP Term Sheet dated April 1, 2024.

[23] The DIP Term Sheet includes the following material terms, among others:

a. financing will be provided pursuant to a $30 million, non-revolving multiple advance facility, which includes a $6.5 million initial advance; b. the term is until June 30, 2024 as may be extended to September 30, 2024; c. interest is payable at the Canadian prime rate from time to time in effect, plus 250 bps; d. certain amounts are required to be applied to repay the DIP Facility, including all payments received by any of the Pride Entities outside the ordinary course of business, whether disclosed or not in the DIP Budget and which exceed $1 million individually or in the aggregate; and, subject to the Governance Protocol and the ARIO, all proceeds from the sale of Secured Assets which proceeds are not contemplated in the DIP Budget and are not subject to a security interest in favour of a third-party financier ranking in priority to the security interest of the Administrative Agent as of the Filing Date. The DIP Term Sheet also requires that certain amounts be applied as against the Pre-Filing Secured Obligations of the Syndicate Lenders, including amounts paid in respect of Pre-Filing intercompany advances by the Pride Entities and all amounts paid to the Administrative Agent in respect of Pre-Filing Secured Obligations in accordance with the Real Property Monetization Plan and Governance Protocol, in each case, subject to an opinion from counsel to the Monitor confirming entitlement to such amounts; and e. there is a commitment fee of $200,000.

[24] The DIP Facility is to be secured by a Court-ordered charge (the “DIP Lenders’ Charge”), and it requires that an Intercompany Advances Charge also be granted to secure all payments made after the date of the ARIO by one Pride Entity to another in favour of the entity advancing such amount.

[25] I am satisfied that the DIP Facility is necessary to maintain for the time being the business of the Applicants as a going concern, and that the terms are appropriate and competitive in the circumstances. I am also satisfied that the proposed DIP Lenders’ Charge should be approved. It is, not surprisingly, a condition of the DIP Facility.

[26] This Court has jurisdiction pursuant to section 11.2 of the CCAA to approve interim financing and grant a corresponding charge in an amount that the Court considered appropriate.

[27] DIP financing will be ordered where the benefits of financing to all stakeholders outweigh potential prejudice to some creditors. Even where it can be established that a creditor may be prejudiced, this factor is only one factor to be considered in equal measure with the other factors set out in section 11.2(4): Re AbitibiBowater Inc., 2009 QCCS 6453 at paras. 16 and 37; League Assets Corp. (Re), 2013 BCSC 2043 at para. 51; and Pacific Shores Resort & Spa Ltd. (Re), 2011 BCSC 1775 at para. 49 (f).

[28] For all of the above reasons, I am satisfied that the factors set out in section 11.2(4), and the section 11.2(1) factors enumerated by the court in CanWest Publishing Inc., 2010 ONSC 222, have been satisfied here. Clearly, the DIP Facility will enhance the prospects of a viable compromise or arrangement being made. Notice has been given to secured creditors and service has been effected on all known affected parties. The Monitor supports both the DIP Facility and the corresponding DIP Lenders’ Charge.

[29] Finally, the DIP Lenders’ Charge will not prime any valid and enforceable security interest of third-party financiers in specific vehicle and lease collateral or any valid and enforceable mortgage in favour of a third-party mortgagee, which rank in priority to the Syndicate Lenders’ Security.

[30] No viable restructuring is possible without the DIP Facility, and the business of the Pride Entities is already in serious jeopardy. Additional and immediate funding is critical. The quantum of that funding has been calculated in good faith by the Applicants with the active involvement of the Monitor. Given the number of lenders with security interests in assets of the Pride Group, the state of its operations and its books and records (which impair any due diligence by any third party lender), as well as the significant involvement of the Syndicate Lenders in the discussions leading up to the CCAA filing and their willingness to provide interim financing, it is far from clear that there would be any other viable alternatives, let alone any alternatives on commercially competitive terms.

[31] I am satisfied that with the assistance of both the Monitor and the Chief Restructuring Officer (“CRO”) to continue to monitor operations, approval of the DIP Facility and the corresponding DIP Lenders’ Charge is appropriate.

[32] I decline to add the additional language creating an exception to the paramountcy provision proposed by Bennington and MOVE Trust (supported by other securitization funders) referred to above. First, the DIP Agent has confirmed that these proposed changes are not acceptable and, as observed above, there is at least today, no alternative to the proposed DIP Facility which I am satisfied is critical and needs to be approved now. Moreover, the ARIO contains the usual comeback clause permitting any party to seek to vary or amend the terms of the ARIO on seven days’ notice if and as necessary.

[33] With respect to the proposed carve-out sought by Triumph, as noted above, the Applicants and the DIP Lenders have agreed to such a carveout, in principle. I am satisfied that this is appropriate given that, at least on the evidence to date (including but not limited to the very late-breaking affidavit of Mr. Daniel Mourning of Triumph sworn April 5, 2024 and delivered just prior to the comeback hearing), it is not clear that Arnold is a borrower or included in any of the consolidated financial statements of the Pride Entities, and nor is it clear that Arnold requires any intercompany advances or advances under the DIP to continue operations. I am satisfied that the carveout is appropriate.

[34] However, I am also satisfied that the compromise (a significant one) agreed to on very short notice by the DIP Lenders and the Applicants that the carveout have a maximum of CDN $3 million is appropriate. I observe that even the Mourning Affidavit describes the customer receivables purchased by Triumph as having a value of “approximately” USD $3.3 million. The exact amount is not certain in the record, and I am satisfied that the potential prejudice to Triumph, if indeed there is any, that could result from my declining to increase the carveout by the incremental amount representing the difference between CDN $3 million and USD $3 million, is more than outweighed by the potential prejudice of the DIP Facility not being approved today.

[35] I am also satisfied that all four priority charges and their relative priority are appropriate and should be approved and/or continued. At the initial hearing presided over by the Chief Justice, the priority of the Administration Charge and the Directors’ Charge was deferred since that hearing proceeded effectively on an ex parte basis and notice of the charges had not been provided to stakeholders as is required by the CCAA.

[36] The Initial Order of the Chief Justice granted an Administration Charge in the maximum amount of $2 million and a Directors’ Charge in the maximum amount of $4.1 million. The quantum of each was determined in consultation with the Monitor, but related only to the initial 10-day stay period.

[37] I am satisfied that the proposed increase in the maximum amount of the Administration Charge to $3 million and the proposed increase in the maximum amount of the Directors’ Charge to $7.4 million are both appropriate. The increased quantum for each charge was again determined by the Monitor with a view to the proposed extension of the stay of proceedings to June 30, 2024. The Monitor submits that, in its opinion, the increases are reasonable and supports approval thereof. No party today challenges the quantum of the proposed increase of those charges.

[38] In my view, the proposed quantum of each is appropriate. The proposed increase in the quantum of the Administration Charge was foreshadowed in the affidavit of Mr. Johal sworn in support of the Initial Order, so stakeholders have been on notice of this for some time. The increased quantum reflects the estimated financial exposure during the proposed stay extension period as well as the estimated payment cycles of the Pride Entities, and in my view is appropriate, having considered the relevant factors: see CanWest, at para. 54. Pursuant to section 11.52 of the CCAA, it is approved.

[39] I am also satisfied that the Intercompany Advances Charge is appropriate. Pursuant to the proposed Preservation Protocol discussed below, the Pride Entities would be entitled to continue to utilize their centralized cash management system currently in place, and that includes the ability to make intercompany transfers. This in turn includes the authority for one Pride Entity to advance amounts to a recipient Pride Entity, and for such recipient to borrow from the lending Pride Entity the amounts advanced in order to fund its ongoing operations (referred to in the materials as the “Intercompany Advances”).

[40] Moreover, the DIP Facility permits the advance of funds from one DIP Borrower to another, and the requested relief would help to ensure that stakeholders, including but not limited to the DIP Lenders, are not prejudiced by the movement of such funds.

[41] It follows that a corresponding charge in favour of the lending Pride Entity is appropriate. This is consistent with the overarching objective of maintaining the status quo and avoiding, particularly at this early stage, inadvertently altering relative priorities or rights of creditors of different Pride Entities within the group.

[42] Where the operations and expenses of debtor companies are funded in the ordinary course through intercompany advances, CCAA courts have found it to be appropriate to approve the continuation of those arrangements and to grant a corresponding charge: Re Performance Sports Group Ltd., 2016 ONSC 6800 at paras. 33-35 [Performance Sports Group]; and Walter Energy Canada Holdings, Inc., (Re), 2016 BCSC 107 at paras. 62-67 [Walter Energy].

[43] I am further satisfied that the proposed increase in the Directors’ Charge is appropriate as was also previewed in the Initial Affidavit. Established by the Applicants in consultation with the Monitor, it reflects approximately two weeks of payroll, one month of Canadian sales tax obligations, and one month of US state sales and use taxes, income taxes and payroll taxes that attract director and officer liability in the jurisdictions in which those entities operate during the proposed stay extension period, all in addition to the current accrued vacation pay and current unremitted source deductions.

[44] For all of these reasons, I am satisfied that the Directors’ Charge should be approved pursuant to section 11.51 of the CCAA.

[45] The general jurisdiction of the court found in section 11 of the CCAA includes the ability to make orders that it thinks appropriate. The express power to grant a critical supplier’s charge found in section 11.4 does not remove the inherent jurisdiction of the court to grant other critical supplier protections, including provision for the payment of prefiling amounts to suppliers whose services are critical to the post-filing operations of the debtor: CanWest, at para. 50.

[46] A supplier is “critical”, or can be, where the particular goods or services are sufficiently integrated into the operations of the debtor company that it would be materially disruptive to the operations and restructuring of the debtor for the particular supplier to cease providing such services and/or it would be difficult or impossible to secure an alternate supplier: Re Target Canada Co., 2015 ONSC 303 at paras. 62-65; and Re Clover Leaf Holdings Company, 2019 ONSC 6966 at paras. 24-27.

[47] In my view, the particular circumstances of this case justify the proposed authorization for the Pride Entities to pay certain prefiling amounts, including (with the consent of both the Monitor and the CRO), any amounts owing for goods, services or tolls if the payment is necessary to preserve value, together with insurance premiums that were accrued but unpaid as of the date of filing.

[48] The ARIO sought today contemplates the following priorities among charges:

a. first, the Administration Charge; b. second, the Intercompany Advances Charge; c. third, the DIP Lenders’ Charge; and d. fourth, the Directors’ Charge.

[49] The ARIO would further provide that the Directors’ Charge shall, subject to the priorities listed above, rank in priority to all other Encumbrances except for any validly perfected and enforceable security interest of third-party financiers in specific vehicle and lease collateral; and any valid and enforceable mortgage in favour of a third-party mortgagee, in each case, including for greater certainty, such interests in favour of the Administrative Agent and Syndicate Lenders under the Security.

[50] For the reasons set out above, I am satisfied that the proposed priority of the charges is appropriate. It, too, is supported by the Monitor and no party at the hearing seriously contested the proposed relative priorities.

[51] In addition, the proposed ARIO provides that no person shall be entitled to set off amounts that are or may become due to any Pride Entity prior to the date of the Initial Order with any amounts that are or may become due from any of the Pride Entities on or after the date of the Initial Order, or are or may become due from any of the Pride Entities in respect of obligations arising prior to the date of the ARIO with any amounts that are or may become due to any of the Pride Entities in respect of obligations arising on or after the date of the Initial Order without the prior written consent of the applicable Pride Entity, the CRO and the Monitor, or further Order of this Court.

[52] I observe that such accords with the law as it now stands in any event: see ss. 11 and 11.02 of the CCAA and Montréal (City) v. Deloitte Restructuring Inc., 2021 SCC 53 at para. 62. Moreover, any stakeholder ought not to be prejudiced by this language in that they can seek an order lifting the stay of proceedings if and as necessary. I am satisfied, however, that the proposed language should be included in the ARIO given that certain creditors of Pride Entities have suggested, or taken steps in furtherance of, setting off pre-filing obligations against post-filing obligations. It is important that there be clarity in this regard.

[53] I am also satisfied that the Protocols Order is appropriate and should be approved. The Protocols Order provides for Court approval of the Governance Protocol, the Real Estate Monetization Plan, and the Intercompany and unsecured Claims Preservation Protocol. None of these proposed protocols is opposed. The Protocols are fully supported by the Monitor as well as the Syndicate Lenders and the Directors & Officers. In my view, each of them is appropriate. The protocols, and particularly the Governance Protocol, achieve that objective.

[54] The Governance Protocol provides for reasonable controls and oversight over cash proceeds and provides sufficient scrutiny that distributions and remittances are made in accordance with the rights of all stakeholders considered. The overarching objective, as observed above, is to create an environment of visibility, transparency and fairness, and to maintain the status quo particularly in this early phase of this restructuring, where there remain many unknowns.

[55] It is important to observe that the Governance Protocol is not intended to be a final and determinative document describing how revenues of the Pride Group will be dealt with. Rather, it is intended to provide short-term stability, predictability and equality of treatment for lenders.

[56] To this end, I further observe that a number of stakeholders have made submissions to the effect that their consent or lack of opposition to the approval of the Governance Protocol is not to be taken as any agreement as to the appropriateness of its terms, for all time. Approval today of the Governance Protocol is without prejudice to the rights of any stakeholder to make submissions as to proposed amendments or variations at a later date.

[57] The Real Estate Monetization Plan (also referred to in the materials as the Real Estate Protocol) provides for the requirement that the Pride Entities list for sale all of the real property by no later than May 1, 2024 or such later date as the DIP Agent may agree under the direction of the CRO. At my direction, approval of the Monitor is also required.

[58] It appears that one very significant source of potential recoveries will be the realization of net proceeds from the sale of real property. I am satisfied that the Real Estate Monetization Plan provides for the maximization of such recoveries on an accelerated basis, but does so in an orderly way, and subject to appropriate oversight to ensure that it is in the best interests of the stakeholders to sell a particular parcel of real property as opposed to keeping it for going concern operations. Proceeds will be dealt with in accordance with the terms of the DIP Term Sheet, the Preservation Protocol and any relevant orders of this Court.

[59] The Intercompany and Unsecured Claims Preservation Protocol provides that, after repayment of specific property mortgages registered on title to the real properties once sold, any net proceeds of sale are pooled in accordance with the mechanisms described in that Protocol, with the objective of preserving claims in the priority and manner as they would have attached to the real properties, until distributions of such proceeds are made.

[60] I am further satisfied that this is appropriate. Certain mortgage lenders of the Pride Entities have provided financing for several real properties which has been cross collateralized as against other real properties. This Protocol ensures that any inequity that could result from the timing of the sale of such properties are minimized. Such inequities could arise from the timing of the sale of a property since certain properties are subject to intercompany claims and others are not.

[61] This Protocol was designed to implement a mechanism to permit mortgagees to be repaid from proceeds of monetization of properties in their respective Mortgage Pools (as defined in the Preservation Protocol) as and when they are sold, but the distribution of proceeds to claimants of sold properties mimics, to the greatest extent possible in the circumstances, the realization to which they would have been entitled had the properties in each Mortgage Pool not been cross collateralized.

[62] The Pride Entities will seek an order from this Court authorizing any distribution from the net proceeds of sale of any properties to the relevant mortgagee at the same time as they seek an order approving the sale of that property. Remaining net proceeds after such distributions will be held by the Monitor.

[63] Following the sale of all property in a Mortgage Pool, the Pride Entities, in consultation with the Monitor, the CRO and the DIP Agent, will seek approval of any distribution to claimants with the same nature and priority as they had immediately prior to the sale, with respect to those properties that have been sold.

[64] For all of these reasons, the requested relief is approved. ARIO and Protocols Order to go in the form signed by me today. Both orders have immediate effect without the necessity of issuing and entering.

[65] The Monitor will schedule the next hearing, to address any requested revisions to the Governance Protocol, expected in approximately two weeks’ time, through the Commercial List Office.

Osborne J.