Adam Jackson
Fire & Flower Holdings Corp. and its subsidiaries were granted creditor protection by the Ontario Superior Court of Justice, the company announced Thursday.
Fire & Flower (TSX: FAF) (OTCQX: FFLWF) and its associated companies — 13318184 Canada Inc., 11180703 Canada Inc., 10926671 Canada Ltd., Friendly Stranger Holdings Corp., Pineapple Express Delivery Inc., and Hifyre Inc. — on June 5 were issued an initial order for Canadian creditor protection under Companies’ Creditors Arrangement Act (CCAA).
The court-approved initial order incorporated several features, including a stay of proceedings favoring Fire & Flower and the appointment of FTI Consulting Canada Inc. as the group’s monitor.
Additionally, Circle K gas stations owner and affiliate Alimentation Couche-Tard Inc. is stepping in to provide a bankruptcy financing loan of C$9.8 million to fund the CCAA proceedings and meet the company’s short-term working capital needs. As both companies are connected, the loan is considered a related-party transaction under Canadian securities rule, bypassing the requirement for a formal value check and minority shareholder approval.
The court has now revised the initial order with some new caveats.
Key changes in the updated order include an extension of the stay period until Sept. 1, approval of a key employee retention plan, and an increased amount of the court-ordered charge over the Fire & Flower cohort’s assets. The order also allows an extension of the time limit to hold the company’s annual June 22 general shareholders meeting until the conclusion of the CCAA proceedings.
In line with the updated order, the company’s annual shareholders’ meeting originally slated for June 22 has been postponed until the completion of the CCAA proceedings. The Toronto Stock Exchange (TSX) has also informed Fire & Flower that it intends to delist the company’s common shares on July 14 after the markets close.
At the same time, the company announced the resignation of Suzanne Poirier from her position as a director of the company. In a statement, the board expressed its gratitude to Poirier for her contributions to the company.
Fire & Flower had been actively pursuing additional financing to raise capital to fund its operations, and on May 26, 2023, engaged a financial advisor to assist it with reviewing strategic options, including financing options. Following the review, the directors of the Company decided that it was is in the best interests of the company to file for bankruptcy.
