Canntrust Holdings (TSX: TRST) (NYSE: CTST) this morning announced that it has entered into creditor protection as a means of protecting the firm while it engages in correcting several issues with its operation, including the completion of its remediation plans. Further, the company expects to be delisted from the New York Stock Exchange and Toronto Stock Exchange due to the decision to not complete required financial documents.
The order granted under the Companies’ Creditor Arrange Act was granted by the Ontario Superior Court of Justice, with a stay on proceedings having been granted for a period of 10 days, subject to extension. The stay of proceeds is expected to allow Canntrust to continue its remediation work at its Vaughn, Ontario facility, as well as work towards reinstatement of its licenses for the Vaughn and Niagara facilities.
The protection is also expected to allow Canntrust to explore a CCAA plan of compromise or arrangement as a means of addressing the numerous class action lawsuits that have been filed against the firm as a means of resolving them collectively. The company then expects to complete the ongoing review of strategic alternatives which may include a potential sale.
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As a result of the time and money spent pursuing the reinstatement of licenses, the company is not planning on spending any further time or effort on correcting its outstanding public disclosure defaults. As a result of this, and filing for creditor protection, the company anticipates that it will be delisted from both the TSX and the NYSE, and that further trading in the equity will be halted.
Canntrust reported a cash position of $145 million as of March 20, 2020.
Information for this briefing was found via Sedar and CannTrust Holdings Inc. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
