October 19, 2022

CannTrust Holdings Inc. Makes Proposal under the Bankruptcy and Insolvency Act

CannTrust Holdings Inc. Makes Proposal under the Bankruptcy and Insolvency Act

 

Oct 19, 2022

VAUGHAN, ONOct. 19, 2022 /CNW/ – CannTrust Holdings Inc. (the “Company” or “CTH”), a minority investor in Phoena Holdings Inc. (“Phoena”, formerly CannTrust Equity Inc.) today announced that it has made a Division I Proposal pursuant to the Bankruptcy and Insolvency Act (Canada) (the “Proposal”).  Phoena’s operations are not impacted by the restructuring of CTH.

Further to its press release dated July 7, 2022, CTH had intended to hold its annual general meeting on or before November 30, 2022. However, in order to hold such annual meeting, CTH would be required to, among other things, prepare audited financial statements. CTH has determined that it is not feasible to complete the audit and other work necessary to hold an annual general meeting before November 30, 2022. In these circumstances, CTH believes it is in the best interests of its stakeholders to make a proposal to its creditors under the BIA.

The Proposal is being funded by Phoena, with the support of Phoena’s largest shareholder, Marshall Fields Holdings, a wholly-owned subsidiary of Kenzoll B.V., a Netherlands based private-equity company.  Phoena’s operations are not impacted by the restructuring of CTH. The Proposal is also being supported by CTH’s lenders.

Subject to satisfying certain conditions, including approval from creditors and obtaining an approval order for the Proposal from the Court, CTH intends to address its remaining liabilities, dispose of its residual assets, distribute its shares in Phoena and dissolve in advance of November 30, 2022 or as soon as practicable after that date.

CTH intends to distribute the shares it holds in Phoena to its existing shareholders, provided that, (i) shareholders are required to hold at least 10,000 common shares of CTH in order to qualify for a distribution of Phoena common shares; and (ii) any distribution of Phoena shares to a holder of CTH shares who is a person that is not Canadian or a U.S. person will be subject to CTH obtaining an opinion from qualified and independent securities counsel that such distribution is exempt from any requirement to prepare, file or deliver a prospectus or similar document. The Company is limiting the distribution of its Phoena Holdings shares to holders or owners of at least 10,000 CTH common shares so that the costs of distribution will not significantly exceed the value of the Phoena shares being distributed. When Phoena completed its private placement with Marshall Fields Holdings and the other strategic investors in March, 2022, they were issued common shares at a price of approximate $0.009 per share, implying that 10,000 shares had a value of $90.

Only those creditors to CTH with proven claims (after submitting a proof of claim in accordance with the claims procedure) shall be entitled to attend the creditors meeting, vote on the resolution to approve the Proposal and participate in any distributions contemplated by the Proposal. To obtain further details about the claims procedure, the time and place of the creditors meeting and/or to get a proof of claims form and copy of the claims package, please visit the Proposal Trustee’s website at http://www.ey.com/ca/canntrust. The Proposal Trustee will post additional relevant information and documentation related to these proceedings on its website as they become available.

The hearing date for court approval of the Proposal will be scheduled after the creditors meeting, if the Proposal is approved by the creditors at the creditors meeting. Details on the hearing date will be posted to the Proposal Trustee’s website once available. Any person wishing to support or oppose the relief sought at the approval hearing may serve court materials on the service list setting out their basis for their support or opposition and/or attend the hearing. After considering the court materials filed by the Proposal Trustee, CTH and any other person, and hearing the submissions of those present at the hearing, the Court may approve the Proposal and other relief sought by CTH. If approved by the Court, CTH would then proceed to implement the Proposal.

Phoena continues to explore strategic options to generate liquidity for its shareholders.  The Board’s deliberations are ongoing and progressing but there can be no assurance that Phoena will ultimately be successful.

About CannTrust Holdings Inc.

It is a holding company and its primary asset is comprised of an approximate 10% equity interest in Phoena. Although CannTrust is a reporting issuer under the laws of each of the Canadian provinces except for Quebec, it remains subject to the CTO and its common shares have been delisted by the Toronto Stock Exchange and the New York Stock Exchange.

About Phoena

Phoena is an award-winning, federally regulated licensed cannabis producer, with locations in Vaughan and Fenwick, Ontario. Phoena operates a portfolio of brands, including estora, Liiv, SYNR.G and Xscape.

Phoena is committed to providing exceptional consumer experience, quality & consistent products. Phoena’s greenhouse produces Grade A cannabis flower, which is sold in a variety of dried flower and extract formats.

Phoena creates cannabis products that meet the diverse needs of patients and consumers, promoting positivity, supporting creativity, and inspiring confidence.

Phoena, empowering you every day.

Learn more at Phoena.com

Forward-Looking Statements

This press release contains “forward-looking information” within the meaning of Canadian securities laws and “forward-looking statements” within the meaning of the United States Private Securities Litigation Reform Act of 1995 and other applicable United States safe harbor laws, and such statements are based upon CannTrust’s current internal expectations, estimates, projections, assumptions and beliefs and views of future events.

Forward-looking information and forward-looking statements can be identified by the use of forward-looking terminology such as “believes”, “expect”, “likely”, “may”, “will”, “should”, “intend”, “anticipate”, “potential”, “proposed”, “estimate” and other similar words, including negative and grammatical variations thereof, or statements that certain events or conditions “may”, “would” or “will” happen, or by discussions of strategy.

The forward-looking information and statements in this news release include statements relating to CTH’s efforts to implement a Proposal under the BIA and Phoena’s exploration of strategic options to generate liquidity for its shareholders. Forward-looking information and statements necessarily involve known and unknown risks, including, without limitation: the risk that, if Phoena requires additional equity, the Company’s investment in Phoena could be diluted further; the risk that Phoena or its affiliates could default under its credit facilities from Cortland Credit Lending Corporation or Marshall Fields International B.V., which are secured against substantially all of Phoena and the Company’s assets; the risk that the Company will not be able to obtain a Proposal Approval Order from the Court or complete the contemplated restructuring; the impact of any regulatory and other investigations or proceedings; the risks associated with general economic conditions and/or adverse industry events; the risk of loss of markets; the risk of future legislative and regulatory developments in Canadathe United States and elsewhere; the state of the cannabis industry in Canada generally; the ability of Phoena to attract and retain suitable directors, officers and employees; the risks that Phoena will not be able to satisfy the requirements of a stock exchange to obtain a listing or complete a strategic transaction; and the ability of Phoena to successfully implement its business strategies.

Any forward-looking information and statements speak only as of the date on which they are made, and, except as required by law, neither the Company nor Phoena undertake any obligation to update or revise any forward-looking information or statements, whether as a result of new information, future events or otherwise. New factors emerge from time to time, and it is not possible for the Company or Phoena to predict all such factors. When considering these forward-looking information and statements, readers should keep in mind the risk factors and other cautionary statements in the Company’s Annual Information Form dated March 28, 2019 (the “AIF“) and filed with the applicable Canadian securities regulatory authorities on SEDAR at www.sedar.com and filed as an exhibit the Company’s Form 40-F annual report under the United States Securities Exchange Act of 1934, as amended, with the United States Securities and Exchange Commission on EDGAR at www.sec.gov (the “March 2019 Form 40-F”). The risk factors and other factors noted in the AIF could cause actual events or results to differ materially from those described in any forward-looking information or statements. Readers are also reminded that the Company remains in default of its periodic disclosure requirements under applicable securities laws and stock exchange requirements, that its most recent AIF, Form 40-F and other disclosures do not reflect all risk factors that currently face the Company, and that the Company has not completed or filed the restatements of the financial statements included in the AIF or the March 2019 Form 40-F or otherwise filed an amendment to such Form 40-F, and that the Company was permitted by the Initial Order of the Superior Court of Justice to not to correct its prior filings or make any further filings in respect of periodic disclosure requirements under applicable securities laws and stock exchange requirements. None of the Company’s securities is listed for trading on any stock exchange in any jurisdiction and, in Canada, trading in the Company’s securities is subject to a cease-trade order issued on April 13, 2020 by the Ontario Securities Commission for CannTrust’s failure to comply with its disclosure obligations under applicable securities laws.

SOURCE CannTrust Holdings Inc.

 

For further information:

Media Relations: media@phoena.com

Investor Relations: investor@phoena.com

 

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Contact us

DAN HOGAN

Dan Hogan is a seasoned executive with over 40 years of experience in consumer products companies. Hogan has strong operations, finance and executive leadership skills, as well as extensive experience in restructuring, remediation, continuous improvement, and strategic development.

Hogan is the former Head of Strategic Priorities at Phoena. His career spans multiple senior roles, including CEO of eBags Inc., COO and CFO of the Coleman Company, as well as senior international roles at Georgia-Pacific and World Kitchen.

GREG GUYATT

Greg Guyatt has more than 20 years of experience leading high-performing teams across the cannabis, CPG, retail, pharmaceutical and private equity sectors.

Guyatt is the current CEO of Phoena, following roles as our CFO, CFO of GreenSpace Brands Inc. and increasingly senior roles at Sears Canada.

Guyatt has extensive knowledge across governance, strategic planning, risk management, financial reporting and treasury, as well as a wealth of M&A and capital markets expertise, having begun his career at Deloitte, before spending several years as an investment banker with UBS in the United Kingdom.

DAVID BLAIR, CPA, CA

Chief Financial Officer

David Blair is the Chief Financial Officer of Phoena. Mr. Blair joined the business in October 2019 as the VP of Finance and leads all areas of the company’s financial planning, risk management, record-keeping, and reporting.

An accomplished executive, Mr. Blair has extensive public company controllership, operational and financial strategy experience. Prior to Phoena, Mr. Blair spent 18 years at Wajax, a Canadian distributor of equipment, power systems and industrial machinery, as a corporate controller, following 7 years as a financial analyst with companies including JD Edwards, Apple Inc. and Marion Merrell Dow.

Mr. Blair has a Bachelors in Mathematics from the University of Waterloo and also holds a CPA, CA designation.

SHAWNA PAGE

Director

Ms. Page brings years of experience in both the capital markets, as well as the consumer retail markets.

Ms. Page spent 10 years working at Merrill Lynch Canada, followed by 10 years at TD Securities where she was Managing Director and Chief of Staff.

In 2007, Shawna launched a unique mass-channel brand of gender-specific and condition-specific products into the highly regulated nutraceutical industry across Canada, and later in various international markets, which she successfully exited in November 2016.

MARK DAWBER, FCPA, FCA

Director

Mr. Dawber is a FCPA with significant public accounting experience having been an Audit Partner at Moore Stephens Hyde Houghton from 1971 until 1998 and BDO Canada LLP from 1999 to 2000.

He has extensive public company experience having served on public company boards for many years as an independent director, chair of audit committees and as a member of governance and compensation committees.

He has conducted numerous assignments for the Institute of Chartered Accountants of Ontario’s Professional Conduct Committee.

MITCHELL SANDERS

Director

Senior Partner at Goldman, Spring, Kichler & Sanders LLP, an established boutique commercial law firm in Toronto.

Specializes in corporate finance, mergers and acquisitions, and securities law to mid-market clients in Canada and the US.

Serves on the board of numerous companies and not-for-profit entities.

Former member of the Small Business Advisory Committee to the Ontario Securities Commission and TEC, an international organization of CEO’s.

ROBERT MARCOVITCH

Chairman of the Board

Mr. Marcovitch is a seasoned chief executive with substantial business experience, managing companies with in excess of $1 billion dollars in revenue.

Until recently, he was the President and CEO of K2 Sports, an international developer, manufacturer, marketer and distributor of winter sports equipment (and was previously with K2 from 1999 to 2011). His responsibilities included managing factories in Europe, the USA and Asia.

He was previously the Chief Executive Officer at The Coleman Outdoor Company from 2011 until 2015, and prior to that, was Chief Executive Officer and President of Ride, Inc. from 1994 to 1999, which prior to its acquisition by K2 was a large publicly traded company.

ANNA JAKOBSMEIER

Senior Director, Production

Anna Jakobsmeier is the Senior Director of Production, leading Phoena’s Vaughan Manufacturing Facility.

She began her tenure with Phoena in 2016, overseeing the extraction department and was responsible for launching our award-winning cannabis oils and capsules. In her time with the business, Anna has taken on increasingly more senior roles within the business and currently manages all production and manufacturing projects in our Vaughan facility. Anna has simultaneously led a number of special projects for the business, notably leading the redesign and renovation of Phoena’s GPP facility, while successfully maintaining operations.

Ms. Jakobsmeier brings significant international experience to the Phoena team having worked in numerous Countries in the beverage alcohol and agriculture industries, across operations and logistics roles.

When she isn’t travelling or exploring music and arts festivals, Anna enjoys spending time at home with her puppy Ralphie.

DAVID HAMBY

Chief Operating Officer

As an experienced farmer, David Hamby oversees the growing operation at Phoena’s greenhouse facility in Pelham, ON. Prior to joining the business, David was the President of Operations at the Cambridge Towel Companies where he was responsible for the oversight of manufacturing operations in Ontario, North Carolina and South Carolina.

He is also an inventor and holds the US and Canadian patent for an institutional towel format.

David obtained the rank of Sergeant First Class in the US Armed Forces and a Vietnam veteran, having spent five years in active duty and eight years in the Reserve.

CHARL VAN RENSBURG

VP, Sales and Business Development

Charl van Rensburg is the Vice President of Sales and Business Development. In his role, he will be responsible for managing all recreational, medical, and international sales, as well as driving existing and new product growth. He is a passionate and collaborative senior sales leader with 20+ years of international sales and business development experience in various sectors and regulated industries – including Consumer Packaged Goods and Beverage Alcohol.

Prior to joining Phoena, Charl gained vast experience working his way up in multinational organizations (including British American Tobacco, MolsonCoors Canada and Brown – Foreman) where he contributed strategically, operational and tactically to help drive and achieve corporate objectives. Brands he has managed include Jack Daniel’s, Heineken, Miller, Corona, Coors Light, Molson Canadian as well as du Maurier, Dunhill, Marlboro, Lucky Strike and Vogue.

Charl’s educational background lies in Business Administration and Marketing Management.

ROB SCHENKEL, MBA

SVP & Chief Information Officer

Rob Schenkel is the Chief Information Officer at CannTrust where he is responsible for CannTrust’s technology strategy, vision, and roadmap for applications, infrastructure, architecture, service delivery, and information security. He started with CannTrust in October 2018 as VP, Information Technology.

Prior to CannTrust, Rob served as the Chief Technology Officer of Tulkita Technologies Inc., a boutique management consulting where he led organizations towards IT optimization by applying innovative solutions to a global workforce.

Rob’s 20-year career of providing senior leadership to startups has been instrumental for CannTrust as it continues its rapid growth. He began his career as a founder of Acpana Systems Inc., where he helped create Data Box, an early entrant in the cloud computing and remote digital data storage sector. There, he was part of the team that expanded the business and eventually took the company public.

Rob received an Honours degree in Computing and Computer Electronics from Wilfred Laurier University and later earned his Executive MBA from the Ivey Business School at Western University.

JEFFERY ZIETLOW, MBA

SVP & Chief Commercial Officer

Jeffrey Zietlow is the Chief Commercial Officer at Phoena where he leads the company’s marketing, sales, and innovation strategy. He began his tenure with Phoena as the Vice President of Marketing during which the company was recognized at the 2018 Licensed Producer of the Year.

Jeffery’s has vast experience as a senior marketing executive with broad operational expertise in corporate strategy, business development, supply chain and operations. Prior to joining Phoena, Jeffery provided executive leadership at Mill Street Brewery as the Vice President of Marketing. Prior to that, Jeffery was the Director of Marketing at Mother Parkers Tea and Coffee where he developed the vision, led the creation and launch of the new single serve beverage business, RealCup™, compatible with Keurig brewing systems, which grew exponentially over the first 24 months. It was during this time he developed a talent for building cross-functional teams and lead new product innovations.

His career began at Kraft Foods Canada where he excelled through a variety of positions in manufacturing, supply chain, strategy and growth before taking the reigns as director of marketing where he led strategy and business leadership of Premium and Super Premium Coffee Categories, including Nabob, Starbucks and Tassimo.

Jeffery earned his undergraduate degree in engineering from McGill University and later went on to earn his MBA from the Rotman school of Management at the University of Toronto.

DR. ILANA PLATT, PhD

SVP & Chief Regulatory Officer - RP & A/QAP

Dr. Ilana Platt is the Chief Regulatory Officer at Phoena.

She began her tenure with Phoena in 2013, overseeing all aspects of Regulatory Affairs, Quality Assurance, Analytical Sciences, and R&D.  Dr. Platt was instrumental in obtaining numerous key licenses for the company including the original licenses to grow, manufacture, and sell dried cannabis; to manufacture and sell cannabis oil; and the rarely issued Controlled Drugs and Substances licence, which permitted the company to conduct research on cannabis at a time when research activities were not permitted under the governing cannabis regulations.

Dr. Platt’s illustrious career includes more than 12 years as a regulatory science, regulatory affairs and quality assurance professional.  Her 18 years of research experience is vast, and covers clinical, animal, cell research and R&D.

Dr. Platt earned her BSc. At McMaster University in biochemistry and her PhD at the University of Toronto in medical sciences.  Following her PhD studies, Dr. Platt completed a Fellowship at Harvard Schools of Medicine and Dental Medicine.  Dr. Platt is the recipient of 13 national and international awards, including a post-graduate scholarship from the Natural Sciences and Engineering Research Council of Canada.

GREG GUYATT, CPA, CA

Chief Executive Officer

Greg Guyatt is the Chief Executive Officer of Phoena. He joined the business in February 2019 as Chief Financial Officer. Previously, he served as the CFO of GreenSpace Brands. Inc., a Canadian-based premium natural food product company, and brings more than 20 years of experience leading high-performing finance teams from the CPG, pharmaceutical and private equity sectors.

From 2009 through 2016, he held increasingly senior finance roles at Sears Canada, and prior to that spent seven years in the pharmaceutical industry. In these roles, he had responsibility for a broad portfolio of financial operations including governance, audit and risk management, financial reporting, treasury and strategic planning, and has a wealth of M&A and capital markets expertise.

He began his career at Deloitte, followed by several years as an investment banker with UBS in the United Kingdom. Mr. Guyatt holds a B.Comm from Mount Allison University, and a CPA, CA designation.