The Applicants, Fresh City Farms Inc. and Mama Earth Organics Inc., sought approval for a reverse vesting order related to a share subscription agreement with their DIP Lender, who was also the proposed purchaser.
This transaction aimed to preserve the business as a going concern, including non-transferable assets like tax losses and licenses, after an unsuccessful Sale and Investor Solicitation Process (SISP).
The motion also sought third-party releases, an extension of the stay period, approval of the Monitor's reports and fees, and an order compelling Stripe Payments Canada, Ltd. to remit withheld funds.
The court granted all requested relief, finding the transaction fair and reasonable, the reverse vesting structure appropriate given the circumstances (highly regulated environment, non-transferable assets), and the releases justified.
The court also found Stripe's withholding of funds to be in breach of the initial order and critical to the applicants' cash flow, ordering their remittance.
