It appears that Canntrust Holdings (TSX: TRST) isn’t the only firm that has announced it has sought creditor protection this week. This morning, James E Wagner Cultivation (TSXV: JWCA) announced that it will be seeking creditor protection under the Companies’ Credito Arrangement Act (CCAA), with Trichome Financial (CSE: TFC) assisting in the process
James Wagner has agreed to a consensual restructuring with that of Trichome Financial given that Trichome is one of the first largest lenders. The restructure was negotiated and recommended by Wagner’s board of directors, and was approved by the board March 31.
The initial order for creditor protection is anticipated to be granted by the Ontario Superior Court of Justice.
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Under the restructuring plan entered into with Trichome, Trichome will provide James Wagner with a debtor-in-possession (DIP) facility for up to $4 million in interim financing. The result is that day-to-day obligations to employees and vendors will continue to bet met throughout the process.
In addition to the DIP facility, Trichome will also make an offer to purchase the assets of JWCA that contemplates to whats known as a “stalking-horse” agreement in finance. Essentially, the offer for all of James Wagner’s assets that will be made by Trichome is intended to set the baseline for offers from other firms in the sales and investor solicitation process.
KSV Kofman has been appointed as monitor for the CCAA proceedings.
James E. Wagner last traded at $0.12. As a result of filing for creditor protection, it is unknown if the company will resume trading.
Information for this analysis was found via Sedar, and James Wagner Cultivation. The author has no securities related to this organization. James Wagner Cultivation was previously a client of CanaCom Group, the parent company of The Deep Dive. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security.
