Final Bell Claims That BZAM’s Creditor Protection Filing Is A Scheme To ‘Evade Creditors, Defraud Shareholders’ To Go Private

Final Bell Holdings International Ltd. has announced its decision to oppose the application for creditor protection filed by BZAM Ltd. (CSE: BZAM) under Canada’s Companies’ Creditors Arrangement Act (CCAA). 

This decision comes shortly after BZAM initiated CCAA Proceedings less than two months after BZAM acquired Final Bell Canada. The acquisition, which was finalized on January 5, 2024, made Final Bell BZAM’s second-largest shareholder, its most significant unsecured lender, and a primary supplier of hardware and packaging. 

Final Bell claims that it conducted thorough due diligence before the acquisition, relying on extensive material provided by BZAM, including public filings and management representations. These assurances were crucial in convincing Final Bell and its senior secured lender to proceed with the transaction, leading to the release of a comprehensive security package over FB Canada.

The company, which said that it is prepared to pursue all available legal avenues to challenge the CCAA proceedings, contends that BZAM’s move to seek creditor protection is a strategic attempt to sidestep its financial obligations and manipulate its ownership structure at a discounted value, circumventing standard transaction approval processes involving shareholders and creditors. 

“The Company believes that BZAM’s initiation of CCAA Proceedings constitutes an improper use of creditor protection legislation to evade its creditors, defraud shareholders, and facilitate a related party going private transaction at an unjustified discounted value in order to circumvent a customary going private transaction requiring shareholder and creditor approval,” Final Bell said in a statement.

“The end result would not only prejudice BZAM’s public shareholders and stakeholders, but also constitutes an attempt by BZAM to evade its agreements and commitments relating to its acquisition of FB Canada in order to acquire it for no valuable consideration. Contrary to BZAM’s assertions in its announcement today, the Company rejects BZAM’s claim that its board of directors carefully considered any available alternatives prior to proceeding with the CCAA Proceedings.”

BZAM meanwhile is facing challenges not just related to its creditor protection, but its licensing as a whole.

Information for this story was found via the sources and companies mentioned. The author has no securities or affiliations related to the organizations discussed. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

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