RE:Whats Up GGB?
Looks like it's all over but the crying! This explains why no-one was returning calls. The credits grab the assets, we get nothing but a bad memory! Green Growth Brands Obtains Initial Order Under Companies' Creditors Arrangement Act C.GGB | 12 minutes ago COLUMBUS, Ohio, May 20, 2020 (GLOBE NEWSWIRE) -- Green Growth Brands Inc. (CSE: GGB) (OTCQB: GGBXF) announced today that it and certain of its direct and indirect wholly owned subsidiaries (collectively "GGB", the "Company" or the Applicants) have filed for insolvency protection under the Companies Creditors Arrangement Act (Canada) ("CCAA") and obtained an order (the Initial Order) from the Ontario Superior Court of Justice (the Court) granting the Applicants protection under the CCAA. Ernst & Young Inc. (E&Y) has consented to act as the Court-appointed monitor (the Monitor) of the Applicants. The Court has granted CCAA protection for an initial 10 day period (the Initial Period), subject to extension thereafter as the Court deems appropriate, which expires on May 29, 2020. While under CCAA protection, creditors and others are stayed from enforcing any rights against the Applicants. As previously disclosed, the continuing operations of the Company are dependent upon its ability to continue to raise adequate financing, to commence profitable operations, and to repay its liabilities arising from normal business operations as they become due. The CCAA filing was necessitated due to a severe liquidity crisis in the face of material matured and maturing debt, which liquidity crisis was further exacerbated by the negative impact of the COVID-19 pandemic. The pandemic has forced the Company to indefinitely suspend its cannabidiol business, ultimately resulting in the appointment of a receiver for that business and to restrict operations at the Company's The+Source dispensaries in the Las Vegas, Nevada region as a result of Nevada Governor Stephen Sisolak's March 20, 2020 order limiting dispensary operations in the state. After careful consideration of all other available alternatives, GGBs board of directors determined that it is in the best interests of the Company and all its stakeholders to seek protection under the CCAA. All Js Greenspace LLC (All Js or the Lender), one of GGBs existing secured lenders, has agreed to fund the CCAA proceedings through a debtor-in-possession loan facility (the DIP Agreement) in the initial amount (the Initial Amount) of up to US$1 million. An additional $US6.2 million will be made available for borrowing under the DIP Agreement following the Initial Period upon Court approval (such approval, the Amended and Restated Initial Order) at a subsequent hearing (the Comeback Hearing) that would (i) extend the stay period; (ii) increase the amount of the DIP Lenders Charge (as defined below); (iii) approve a sale and investment solicitation process (the SISP); and (iv) approve a stalking-horse agreement (the Stalking Horse Agreement) among the Company, All Js and Capital Transfer Agency in its capacity as the debentureholder trustee of the Companys (A) US$45,500,000 aggregate principal amount of 15.00% secured convertible debentures that matured May 17, 2020 and (B) US$23,717,000 aggregate principal amount of 5.00% secured convertible debentures maturing in 2024 (the Backstop Debentures) (All Js and Capital Transfer Agency in its said capacity are collectively referred to as the Secured Credit Bidders) pursuant to which the Secured Credit Bidders would act as stalking-horse bidders under the SISP. The Company intends to return to the Court within 10 days for the Comeback Hearing to seek the Amended and Restated Initial Order. During the CCAA proceedings, it is expected that ordinary course obligations to employees and key suppliers of goods and services subsequent to the filing date will continue to be met. Management of the Company will remain responsible for the day-to-day operations under the general oversight of the Monitor. A copy of the Initial Order and other Court materials and information related to the Company's CCAA proceedings, all as may be updated or amended from time to time, are available on the website maintained by E&Y at www.ey.com/ca/ggbi. The Company intends to provide further updates on the CCAA proceedings when there are significant developments. The Company also announced today that its Florida-based subsidiaries entities (GGB Florida LLC, GGB Green Holdings LLC and Spring Oaks Greenhouses, Inc. (collectively, the GGB Florida Subsidiaries)) have entered into a forbearance agreement (the Forbearance Agreement) in respect of certain events of default under, among other things, the amended and restated security agreement (the Florida Security Agreement) dated as of April 29, 2020, among the GGB Florida Subsidiaries, the Company and Green Ops Group LLC ( Green Ops) as the secured creditor thereunder and certain loan documents originally entered in favour of Stanley W. Harris, as the representative of each seller under that certain share purchase agreement dated as of June 3, 2019, pursuant to which the Company acquired its Florida-based cannabis business. Pursuant to the terms of the Forbearance Agreement, Green Ops has agreed, among other things, not to commence a foreclosure sale of the collateral (Collateral) under the Florida Security Agreement or accelerate amounts due under the related loan documents (the Forbearance Covenant) until June 15, 2020 (the Forbearance Period) as such period may be extended in accordance with the terms of the Forbearance Agreement. In addition, Green Ops has agreed to advance US$500,000 to the GGB Florida Subsidiaries, representing the balance payable under a US$1 million principal amount 15% secured note dated April 29, 2020. In consideration of the Forbearance Covenant, the Company and Florida Subsidiaries have agreed to conduct a sales process in respect of the business, assets and undertaking of the Florida Subsidiaries with the intention of entering into a binding agreement of purchase and sale prior to the expiry of the Forbearance Period. The Company and the GGB Florida Subsidiaries have agreed that, upon expiry of the Forbearance Period, the Forbearance Covenant shall terminate and Green Ops shall be entitled to exercise any and all of its rights under the applicable loan documents and applicable law against the Collateral, and the Company and the GGB Florida Subsidiaries will not contest any such enforcement action pursuant to the terms of a Voluntary Surrender of Collateral in Satisfaction of Debt and Release Agreement among the parties.