Despite the glimmer of hope that shareholders of iAnthus Capital (CSE: IAN) investors had last week, it appears it was all for naught. The company announced this afternoon that the courts have approved of the plan of arrangement, with slight modification to release terms, leaving existing shareholders with just 2.75% of the resulting company.
The approval by the courts of the recapitalization transaction follows amendments that were made in relation to a proposed injunction provision that was removed, in addition to a narrower scope on release claims. Following this, the courts approved the transaction last night.
Commenting on the revised plan in relation to the previous denial, Justice Gomery stated, “The Revised Plan addresses points of concern specifically noted in my earlier decision. In particular, the release no longer bars claims of historical shareholders and no longer comprehensively protects historical shareholders, auditors, and iAnthus’ agents generally.”
While there were objections raised by Walmer Capital, owned by Alistair Crawford whom is a former director of MPX, along with Sean Zaboroski related to the approval, Justice Gomery dismissed this. The main argument was that jurisdiction was not had for approval of the plan given that shareholders have not voted on the revised plan, however it was outlined that the shareholders had approved a prior version with much stricter releases, and as a result, the shareholders are no worse off with relaxed release terms.
It should also be noted that Walmer is currently in the process of making a claim against iAnthus and former CEO Hadley Ford. The concern is that the release wipes out their ability to proceed with the claim due to protections being provided. However, Justice Gomery disagreed with this notion.
And with that, the revised plan was approved, leaving shareholders with just 2.75% of the company, while secured and unsecured debtholders grabbed 97.25% of the company.
iAnthus Capital last traded at $0.09 on the CSE.
Information for this briefing was found via Sedar, BC Courts and iAnthus Capital 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.
As the founder of The Deep Dive, Jay is focused on all aspects of the firm. This includes operations, as well as acting as the primary writer for The Deep Dive’s stock analysis. In addition to The Deep Dive, Jay performs freelance writing for a number of firms and has been published on Stockhouse.com and CannaInvestor Magazine among others.