Date set for ABC District plan of arrangement

EDMONTON – On March 21, the Alberta-British Columbia District received approval from the Court to present its Plan of Arrangement and Compromise to creditors. Individual creditors and proxies for groups (corporations and congregations) will hold a meeting in Calgary on May 14 to vote on the plan. The Court Appointed Monitor, Deloitte Restructuring Inc., was to send an information package on the vote to all creditors by April 8. The Monitor will also be participating in several additional information meetings in April.

The plan as presented to creditors would include the following (all bullet points are taken verbatim from “The Basics and What You Need to Do” handouts provided by Deloitte to creditors).

• “The lesser of $5,000 or the total amount of their claim (the ‘Convenience Payment(s)’), which will be paid upon the date that the District Plan takes effect. The Convenience Payments will be made net of any amounts that have been paid to you pursuant to the emergency fund, which was approved by the Court as part of the Initial Order granted on January 23, 2015 (‘the Emergency Fund’).”
• “A further cash distribution from the liquidation of the assets (the ‘Non-Core Assets’) held by the District, outside of the Prince of Peace Properties (as defined below). The Monitor currently estimates that Eligible Affected Creditors who are not paid in full by the Convenience Payments will receive cash distributions of between approximately 15% and 20% of their remaining proven claims, after deducting the Convenience Payments, from the sale of the Non-Core Assets. These cash distributions will be made net of any amounts that have previously been paid to you pursuant to the Emergency Fund.”
• “A distribution in the form of shares (the ‘NewCo Shares’) in a new company (‘Newco’) into which will be transferred the Harbour and Manor seniors’ care facilities, the surrounding development and expansion lands and the Prince of Peace church and school (the ‘Prince of Peace Properties’). In addition to the Prince of Peace Properties, assets held by ECHS and EMSS, including working capital, computer hardware, furniture and fixtures, a water treatment plant, medical equipment and a vehicle will be transferred into NewCo (the ‘ECHS and EMSS Assets’). The Prince of Peace Properties and the ECHS and EMSS Assets will collectively be referred to as the ‘NewCo Assets’. Based on the value of the Newco Assets, the NewCo Shares are currently anticipated to be valued at between 53% and 60% of each Eligible Affected Creditors’ remaining proven claim, after deducting the Convenience Payments.”

The document goes on to explain what NewCo is: “NewCo will be formed as a private Alberta corporation immediately after the District Plan takes effect. As described above, the NewCo Assets will be transferred to NewCo and NewCo will continue to operate the Harbour and Manor seniors’ care facilities. Eligible Affected Creditors (with the exception of those Eligible Affected Creditors who reside outside of Canada) who are not paid in full by the Convenience Payments will receive 100% of the NewCo Shares on a pro-rata basis based on the amount of their remaining proven claims after deducting the Convenience Payments. For greater clarity, this means that Eligible Affected Creditors will become owners of NewCo (the ‘NewCo Shareholders’) with the NewCo Shares representing that ownership interest.”

The Court Appointed Monitor writes that it is “supportive of the District Plan and is of the opinion that the District Plan is fair and reasonable and appears to be in the general best interest of all parties.”

Voting on the District’s Plan of Arrangement and Compromise follows on an earlier vote January 23, 2016 by depositors of District Investments Ltd. on their Plan of Arrangement. The court appointed Monitor reports that 472 of DIL’s depositors voted on the plan, with 92% in favour of the plan.

The court has determined that approval for the DIL Plan should be decided at the same time as the District Plan.

Additional information on the restructuring process is available from the websites of the Chief Restructuring Officer and the Court Appointed Monitor.

———————

Print this article