Court File and Parties

Court File No.: CV-19-00633392-00CL Date: 2020-12-18 Superior Court of Justice – Ontario (Commercial List)

Re: IN THE MATTER OF THE COMPANIES’ CREDITORS ARRANGEMENT ACT, R.S.C. 1985, c. C-36, AS AMENDED And In The Matter Of: A PLAN OF COMPROMISE OR ARRANGEMENT OF LYDIAN INTERNATIONAL LIMITED

Before: Chief Justice G.B. Morawetz

Counsel: Elizabeth Pillon, Sanja Sopic and Nick Avis, for the Applicant Rachel Bengino, for the Monitor, Alvarez & Marsal Canada Inc. David Bish, for Orion Capital Management I. Baykal, S. Bozkaya and S. Yuteri, Shareholders

Heard and Released: December 18, 2020

Endorsement

[1] The Applicant, Lydian International Limited (“Lydian International”), brings this motion for an order that:

(a) extends the stay of proceedings (the “Stay Period”) with respect to Lydian International until the earlier of (i) the filing of the Monitor’s CCAA Termination Certificate and (ii) March 31, 2021; and

(b) approves the Eighth Report of the Monitor, dated December 15, 2020 (the “Eighth Report”), and the activities of the Monitor as set out in the Monitor’s Eighth Report.

[2] The facts with respect to this motion are set out in the Eighth Report. Capitalized terms used herein but not otherwise defined have the meanings ascribed to them in the Eighth Report.

[3] The CCAA Plan was sanctioned on June 29, 2020. The Plan contemplated a Plan Implementation Date of June 30, 2020. No appeal was sought in respect of the Plan Sanction and Implementation Order.

[4] The Plan Implementation Date was delayed to July 6, 2020. On that day, the Monitor served the Plan Implementation Certificate specifying that the Plan Implementation Date had occurred. The Plan Implementation Certificate had the effect of, among other things, terminating the CCAA proceedings as they related to Lydian U.K. and Lydian Canada. Lydian International is the only remaining Applicant in these CCAA proceedings.

[5] The Plan provides that Lydian International is to undergo an orderly wind up in Jersey by means of the J&E Process. Lydian International commenced the process for the J&E Order following the Plan Implementation Date. The Initial Hearing before the Royal Court in Jersey was held on August 14, 2020. The Royal Court granted certain directions and set September 11, 2020 as the date for the Substantive Hearing. Creditors and shareholders of Lydian International were given notice of the Substantive Hearing. Following the Substantive Hearing, the Royal Court issued the J&E Order that, among other things, ordered the winding up of Lydian International.

[6] The J&E Process was anticipated to have concluded well in advance of December 21, 2020; however, the Joint Liquidators advised the Monitor and Lydian International’s Canadian counsel that there are certain remaining steps prior to the competition of the J&E Process. The Joint Liquidators must also arrange for a final hearing before the Royal Court to seek the issuance of an Act of Court concluding the J&E Process.

[7] I am satisfied, having reviewed the Eighth Report, that the parties are working in good faith and with due diligence to complete outstanding matters. I am also satisfied that the Applicant has sufficient financial resources to fund these proceedings through the Stay Period. In my view, and in accordance with s. 11.02(2) and (3) of the CCAA, an extension of the Stay Period for the requested period is warranted and is granted.

[8] Lydian International is also seeking an order approving the Eighth Report and the activities detailed therein. The Monitor has not received any adverse comment to its Report. I am satisfied that the Report and the activities of the Monitor should be approved.

[9] Representations were made by certain shareholders, specifically Mr. Bozkaya. I recognize that shareholders have lost the value of their investment in Lydian International. However, this loss occurred prior to today and the relief being requested on this motion has no impact on the financial or legal position of the shareholders. The relief being sought in this motion does not alter the effect of the Plan Sanction and Implementation Order.

[10] Finally, this court has no jurisdiction to address matters before the Royal Court in Jersey.

[11] In the result, the motion is granted and the order has been signed in the form presented.

Chief Justice G.B. Morawetz Date: December 18, 2020