what do people make of the Desjardins suitAt first glance it looks like the company maybe did an end run around the deal Desjardins couldn't quite put together. Does Desjardins have a case?
On May 25, 2023, the Company received a Statement of Claim from Desjardins Securities Inc. ("Desjardins") alleging damages (of approximately $1 million) for breach of contract claiming that they were not paid for work they did relating to the potential acquisition of The Flowr Corporation or its affiliates ("Flowr Corp"). Desjardins was engaged on a success-based fee structure by Avant on March 15, 2022 for a potential transaction where Avant would acquire Flowr in an all-share transaction (prior to its restructuring process). Avant and Flowr Corp could not come to agreeable terms and negotiations were terminated on April 23, 2022 (the "Failed Transaction"). The engagement with Desjardins had a 6-month tail-period which would have expired on October 23, 2022.
Subsequently, in February 2023, a 50% owned joint venture of the Company, Avant K1, acquired Flowr in connection with the proceedings under the Companies' Creditors Arrangement Act ("CCAA") for Flowr. Subsequent to that, in March 2023, nearly a full year following the Company's engagement of Desjardins in connection with the Failed Transaction, the Company acquired the remaining outstanding shares of Avant K1. Desjardins did minimal work in connection with the Failed Transaction and had absolutely no involvement in the eventual acquisition of Flowr by Avant K1 in connection with the CCAA proceedings or the Company's subsequent acquisition of Avant K1. Avant denies the baseless claims made by Desjardins and intends to defend itself vigorously.