An update on the ABC District situation

NOTE: The following is a summary of information on the financial situation taking place in the ABC District, and is derived from news reports, official statements, and other communications

The ABC District has announced that the District, ABC District Investments Limited (DIL), Encharis Community and Housing Services, and Encharis Management and Support Services (collectively referred as the “District Group”) have filed for and received an Initial Order under the Companies’ Creditors Arrangement Act (CCAA) on January 23, 2015. The Order sees the Court appoint an external Monitor—Deloitte Restructuring Inc.—to oversee restructuring efforts by the District.

The Initial Order also grants a stay of proceedings until February 20, during which time investors in the ABC District Church Extension Fund (CEF) or DIL are “restrained from exercising any rights or remedies against the District Group,” Deloitte’s website notes. Investors will be unable to seek redemptions during this period, except for RRIF annual minimum payments and emergency funding for eligible investors in the ABC District CEF or DIL.

“During the stay of proceedings, the District Group will work with the Monitor to assess their options with respect to presenting a formal plan of arrangement to their creditors, which could enable them to restructure their affairs, compromise their debt and continue their operations,” Deloitte’s website explains. The Court-appointed Monitor is responsible for monitoring the District Group’s operations during CCAA proceedings, reporting to the Court on the District Group’s restructuring efforts, advising the Court and creditors on the reasonableness and fairness of any way forward proposed by the District, and overseeing any claims process that is established in the future.

All publicly available documents related to the CCAA process are being posted online at: www.insolvencies.deloitte.ca/en-ca/Pages/lutheran_church_canada_the_alberta_british_columbia_district_et_al.aspx.

The latest news highlights potential problems with District Investments Ltd. Earlier communications had suggested DIL was operating normally, but new documents filed by the ABC District indicate there has been a spike in requests for transfers from DIL in recent weeks, resulting in a “run on the bank.”

On Tuesday, CBC News published a story on the ABC District’s move to CCAA protection. On January 23, the Friday before, CBC News published a follow-up story on the District’s financial situation, in which they interview ABC District President Don Schiemann at length. President Schiemann had released a pastoral letter regarding the current CEF situation to members of the ABC District at large on January 19.

A few days earlier on January 16, The Canadian Lutheran published a summary of then-available information, derived from news reports, official statements, and other communications. Prior to that, Lutheran Church–Canada in Winnipeg released a statement on the ABC District’s financial situation on January 7 and answers to a series of frequently asked questions on January 14.

Yesterday, Lutheran Church–Canada released a statement reassuring professional church workers that LCC’s Pension Plan is unaffected by the current financial situation facing the ABC District.

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