Court File Number: 32-1896275 Estate Number: 32-1896275 Estate Number: 32-1896278 ONTARIO

Court File Number: 32-1896275
Estate Number: 32-1896275
Estate Number: 32-1896278
ONTARIO
SUPERIOR COURT OF JUSTICE
COMMERCIAL LIST
IN THE CONSOLIDATED MATTERS OF THE NOTICE OF INTENTION TO MAKE A
PROPOSAL UNDER THE BANKRUPTCY AND INSOLVENCY ACT,
R.S.C. 1985, c. B-3, AS
AMENDED OF
XS CARGO LIMITED PARTNERSHIP
&
XS CARGO GP INC.
MOTION RECORD
(Motion for an Order Extending the Stay of Proceedings)
(Returnable on October 7, 2014)
STIKEMAN ELLIOTT LLP
40th Floor
1155 Rene Levesque Blvd. West
Montreal, Canada H3B 3V2
Guy P. Martel
Tel: (514) 397-3163
Fax: (514) 397-3222
5300 Commerce Court
199 Bay St.
Toronto, Canada M5L 1B9
Maria Konyukhova LSUC#: 52880V
Tel: (416) 869-5230
Fax: (416) 869-0445
Counsels to the Applicants
#11145671
Court File Number: 32-1896275
Estate Number: 32-1896275
Estate Number: 32-1896278
ONTARIO
SUPERIOR COURT OF JUSTICE
COMMERCIAL LIST
IN THE CONSOLIDATED MATTERS OF THE NOTICE OF INTENTION TO MAKE A
PROPOSAL UNDER THE BANKRUPTCY AND INSOLVENCY ACT,
R.S.C. 1985, c. B-3, AS
AMENDED OF
XS CARGO LIMITED PARTNERSHIP
XS CARGO GP INC.
SERVICE LIST
GENERAL
STIKEIVIAN ELLIOTT LLP
1155 Rene-Levesque Ouest
40th Floor
Montreal, QC H3B 3V2
Guy P. Martel
Tel:
(514) 397-3163
Fax:
(514) 397-3493
Email:
[email protected]
Danny Duy Vu
Tel:
(514) 397-6495
Fax:
(514) 397-5428
Email:
[email protected]
5300 Commerce Court West
199 Bay Street
Toronto, ON M5L 1B9
Lawyers for XS Cargo GP Inc. and XS Cargo
Limited Partnership
#11145671
Maria Konyukhova
Tel:
(416) 869-5230
Fax:
(416) 869-0445
Email:
[email protected]
3
XS CARGO LIMITED PARTNERSHIP
7400 Bramalea Road
Unit A
Mississauga, ON L5S 1X1
Neville Lewis
Tel:
(905) 362-0657
Fax:
(780) 413-4297
Email:
[email protected]
PRICEWATERHOUSECOOPERS INC.
1250 Rene-Levesque Blvd. West
Suite 2800
Montreal, QC H3B 2G4
Philippe Jordan
Tel:
(514) 205-5232
Email:
[email protected]
PwC Tower
18 York Street, Suite 2600
Toronto, Ontario
M5J 0B2
Gregory Prince
Tel:
(416) 814-5752
Email:
[email protected]
Trustee
Tracey Weaver
Email:
[email protected]
FASKEN MARTINEAU DUMOULIN LLP
333 Bay Street,
Suite 2400
Toronto, Ontario M5H 2T6
Stuart Brotman
Tel:
(416) 865-5419
Fax:
(416) 364-7813
Email:
[email protected]
Counsel to the Trustee
AIRD & BERLIS LLP
Brookfield Place, 181 Bay Street
Suite 1800, Box 754
Toronto, ON M5J 2T9
Ken R. Rosenstein
Tel:
(416) 865-3427
Fax:
(416) 863-1515
Email:
[email protected]
Lawyers for the Canadian Imperial Bank of
Commerce
Sam Babe
Tel:
(416) 865-7718
Fax:
(416) 863-1515
Email:
[email protected]
KPMG INC.
333 Bay Street, Suite 4600
Bay Adelaide Centre
Toronto, Ontario
M5H 2S5
Financial advisor to the Canadian Imperial Bank
of Commerce
#11145671
Nicholas Brearton
Tel:
(416) 777-3768
Fax:
(416) 777-3364
Email:
[email protected]
4
GARDINER ROBERTS LLP
Scotia Plaza, 40 King West
Suite 3100
Toronto, ON M5H 3Y2
Jonathan H. Wigley
Tel:
Fax:
Email:
(416) 865-6655
(416) 865-6636
[email protected]
Lawyers for the
OSLER, HOSKIN & HARCOURT LLP
100 King Street West
1 First Canadian Place
Suite 6200, P.O. Box 50
Toronto, ON M5X 1B8
Tracy Sandler
Tel:
Fax:
Email:
(416) 862-5890
(416) 862-6666
[email protected]
John Valley
Lawyers for the
Tel:
Fax:
Email:
(416) 862-5671
(416) 862-6666
[email protected]
PPSA CREDITORS (OTHER THAN CIBC)
"Mezzanine Lenders":
William Gray
Tel:
fax:
Email:
(403) 266-7639
(403) 263-6840
[email protected]
FAMOUS BRANDS INC.
926 5th avenue SW
Suite 900
Calgary AB T2P ON7
Mike McKenna
Email:
[email protected]
KARPREILLY CAPITAL PARTNERS, L.P.
KARPREILLY GP, LLC
KARPREILLY DIRECT, LLC
William Logan
104 Field Point Road,
Greenwich CT 06830
Email:
[email protected]
Chris Reilly
Email:
[email protected]
SUTLER, MARK L.,
1701 Newille Road,
Carlisle Pennsylvania 17013
Mark L. Butler
BACHYNSKI, GERRY
Gerry Bachynski
Email:
[email protected]
1030 Skyvalley Crescent
Oakville ON L6M 3L2
BRITAIN, SEAN
30 West 63rd Street
New York, NY 10023
#11145671
Email:
[email protected]
Sean Britain
Email:
[email protected]
5
CBSC Capital Inc.
100-1235 North Sevice Road
Oakville, ON L6M 2W2
Tel:
Fax:
Email:
011ie's Bargain Outlet, Inc.
6295 Allentown Boulevard,
Suite 1,
Harrisburg PA 17112
Howard Freedman
Tel:
(717) 657-2300
Fax:
(717) 901-3064
Email: [email protected]
Integrated Distribution Systems LP o/a Wajax
Equipment
26313 Township Road, 531A
Acheson AB T7X 5A3
Mike Belaire
Tel:
(780) 948-5497
Fax:
Email:
[email protected]
De Lage Landen Financial Services Canada Inc.
3450 Superior Court,
Unit 1
Oakville ON L6L 0C4
Faseeh Ahmad
Tel:
(905) 901-6534
Fax:
(877) 901-6460
Email: [email protected]
Leggat National Leasing
2207 Fairview St.,
Burlington ON 17R 3Y3
JD Hooper
Tel:
(905) 333-3700
Fax:
(905) 333-0102
Email: [email protected]
Xerox Canada Ltd.
33 Bloor St. East,
3rd Floor,
Toronto ON M4W 3H1
Jasdeep Girn
Tel:
(416) 972-7011
Fax:
Email: [email protected]
C. Keay Investments Ltd.
(dba Ocean Trailers)
9076 River Road
Delta, B.C. V4G 1B5
Marianna de Ader
Email:
[email protected]
(877) 523-5515
(877) 500-5360
[email protected]
GOVERNMENT AGENCIES
CANADA REVENUE AGENCY
C/O DEPARTMENT OF JUSTICE
The Exchange Tower
130 King Street West, Suite 3400
Toronto, ON M5X 1K6
Diane Winters
Tel:
(416) 973-3172
Fax:
(416) 973-0809
Email:
[email protected]
Attorney General of Canada
MINISTRY OF FINANCE (ONTARIO)
Legal Services Branch
6th Floor, 33 King Street West
Oshawa, ON L1H 8H5
#11145671
Kevin O'Hara
Tel:
(905) 436-4510
Fax:
(866) 888-3850
Email:
[email protected]
6
MINISTRY OF FINANCE (BRITISH COLUMBIA)
C/O MINISTRY OF JUSTICE - LEGAL SERVICES
BRANCH
4th Floor, 1675 Douglas Street
PO Box 9289 Stn Prov Govt
Victoria, BC V8W 9J7
David Hatter
Email:
[email protected]
MINISTRY OF FINANCE (ALBERTA)
TREASURY BOARD AND FINANCE
TAX AND REVENUE ADMINISTRATION DIVISION
2nd Fl. Sir Frederick W. Haultain Building
9811-109 Street
Edmonton, AB
T5k 2L5
Ian Ayton
Tel:
(780) 427-9403
Fax:
(780) 422-0899
Email:
[email protected]
MINISTRY OF FINANCE (SASKATCHEWAN)
PROVINCIAL SALES TAX BRANCH
2350 Albert St, Regina,
SK S4P 4A6
Nancy Perras
Tel:
(306) 787-7785
Fax:
(306) 798-4035
Email:
[email protected]
NEWFOUNDLAND DEPARTMENT OF FINANCE
P.O. Box 8700
Main Floor, East Block Confederation Building
St. John's, NL A1B 4J6
Donna Brewer
Tel:
(709) 729-2946
Email:
dbrewer@gov .nlca
CANADA REVENUE AGENCY
C/O DEPARTMENT OF JUSTICE
The Exchange Tower
130 King Street West, Suite 3400
Toronto, ON M5X 1K6
Diane Winters
Tel:
(416) 973-3172
Fax:
(416) 973-0809
Email:
[email protected]
Heather Wellman
Email:
[email protected]
Attorney General of Canada
MINISTRY OF FINANCE
Legal Services Branch
6th Floor, 33 King Street West
Oshawa, ON L1H 8H5
MINISTRY OF THE ATTORNEY GENERAL (ONTARIO)
McMurtry-Scott Building
720 Bay Street, 8th Floor
Toronto, ON M7A 289
#11145671
Kevin O'Hara
Tel:
(905) 436-4510
Fax:
(866) 888-3850
Email:
[email protected]
7
OTHERS
BLANEY MCMURTRY LLP
1500 - 2 Queen Street East
Toronto, ON M5C 3G5
John C. Wolf
Tel:
(416) 593-2994
Fax:
(416) 596-2044
Email:
[email protected]
Lawyers for the Ambassador Centre Inc. and
Ambassador Centre (2) Inc.
Bradley Philipps
Tel:
(416) 593-3940
Fax:
Email:
[email protected]
OFFICE OF THE SUPERINTENDENT OF BANKRUPTCY
OF CANADA
Melissa Govy
Tel:
Fax:
Email:
[email protected]
#11145671
8
Court File Number: 32-1896275
Estate Number: 32-1896275
Estate Number: 32-1896278
ONTARIO
SUPERIOR COURT OF JUSTICE
COMMERCIAL LIST
IN THE CONSOLIDATED MATTERS OF THE NOTICE OF INTENTION TO MAKE A
PROPOSAL UNDER THE BANKRUPTCY AND INSOLVENCY ACT,
R.S.C. 1985, c. B-3, AS
AMENDED OF
XS CARGO LIMITED PARTNERSHIP
&
XS CARGO GP INC.
INDEX
TAB
Document
1.
Notice of Motion of XS Cargo Limited Partnership and of XS Cargo GP Inc.,
returnable on October 7, 2014
2.
Affidavit of Duncan Reith, sworn October 3, 2014
3
A
Exhibit "A" - Order of Justice Penny of the Ontario Superior Court of justice
(Commercial List) rendered on August 6, 2014
B
Exhibit "B" - Order of Justice Pattillo of the Ontario Superior Court of Justice
(Commercial List) rendered on August 29, 2014
C
Exhibit "C" - Order of Justice Penny of the Ontario Superior Court of Justice
(Commercial List) rendered on September 19, 2014
Draft Order
#11145671
TAB 1
Court File Number: 32-1896275
Estate Number: 32-1896275
Estate Number: 32-1896278
ONTARIO
SUPERIOR COURT OF JUSTICE
COMMERCIAL LIST
IN THE CONSOLIDATED MATTERS OF THE NOTICE OF INTENTION TO MAKE A
PROPOSAL UNDER THE BANKRUPTCY AND INSOLVENCY ACT,
R.S.C. 1985, c. B-3, AS
AMENDED OF
XS CARGO LIMITED PARTNERSHIP
XS CARGO GP INC.
NOTICE OF MOTION
(Motion for an Order Extending the Stay of Proceedings)
(Returnable October 7, 2014)
XS Cargo Limited Partnership ("XS LP") and XS Cargo GP Inc. ("XS GP" and together
with XS LP, "XS Cargo" or the "Applicants") will make a motion to the Court, on October 7,
2014, at 10 am or as soon after that time as the motion can be heard, at 330 University
Avenue, Toronto, Ontario.
PROPOSED METHOD OF HEARING: The motion is to be heard orally.
THE MOTION IS FOR:
1.
An Order (the "Second Extension Order"), substantially in the form attached to the
Motion Record:
(a)
abridging the time for delivery of this Notice of Motion and the Motion
Record herein and declaring that the motion is properly returnable on the
date it is heard by this Honourable Court; and
#11145673
2-
(b)
extending the time period for each of the Applicants to file a proposal under
the Bankruptcy and Insolvency Act, R.S.C. 1985, c. B-3, as amended (the "BIA")
until October 31, 2014.
2.
Such further and other relief as the Applicants may request and this Honourable
Court deems just and appropriate.
THE GROUNDS FOR THE MOTION ARE:
3.
XS Cargo is a Canadian discount retailer that operates through XS LP, a limited
partnership formed between XS GP and XSC Canada Holdings Inc. XS Cargo offers a
wide variety of goods, from furniture, to electronics, to housewares and kitchenware.
4.
On July 30, 2014, XS LP and its general partner, XS GP, each filed a Notice of Intention
to Make a Proposal (collectively, the "NOIs") under section 50.4(1) of the BIA.
PricewaterhouseCoopers Inc. was appointed as trustee to the proposal proceedings of
each of XS LP and XS GP ("PwC" or the "Trustee").
5.
The filing of the NOIs were made in a context where XS LP and, de facto, its general
partner, XS GP, had each become insolvent, and XS LP's senior lender, the Canadian
Imperial Bank of Commerce ("CIBC"), had advised them that it was no longer willing
to continue to finance their operations except in the context of a court-supervised
sale, refinancing and investment solicitation process (the "SISP").
6.
Since XS Cargo had not been able at that time to secure agreements for a refinancing
of its indebtedness toward CIBC, on July 30, 2014, prior to filing the NOIs, XS Cargo
entered into an Accommodation Agreement (the "Accommodation Agreement'') with
#11145673
-3-
CIBC pursuant to which XS Cargo agreed to file the NOIs with a view of conducting
a SISP.
7.
On September 15, 2014, after having received several offers in respect of its business
and/or assets in the context of the SISP, XS Cargo accepted a hybrid offer and entered
into the following agreements, both of which were subject to court approval:
(a)
an Agency Agreement (the "Agency Agreement") with Tiger Capital Group,
LLC ("Tiger" or the "Agent") pursuant to which the Agent agreed to act as XS
Cargo's exclusive agent in the present proceedings for the limited purpose of
liquidating XS Cargo's assets related to its 50 stores (the "Liquidation"),
subject to the option granted to the Purchaser (as defined below) under the
APA (as defined below); and
(b)
an Asset Purchase Agreement (the "APA") with 9014454 Canada Inc. (the
"Purchaser") pursuant to which the Purchaser was granted an option to
purchase, as a going concern, certain assets relating to up to 29 Stores, as
further described in the APA. Such option was to be exercised by no later than
October 1, 2014.
8.
On September 19, 2014, the Honourable Justice Penny of the Ontario Superior Court
of Justice (Commercial List) granted an order (the "Approval and Vesting Order")
approving, inter alia, the transactions contemplated under Agency Agreement and the
APA.
9.
On September 26, 2014, XS Cargo was, however, advised by the Purchaser that due to
its inability to secure necessary financing, it would not go forward with the
#11145673
-4-
transaction contemplated under the APA. As a result, the Agent would pursue the
Liquidation of all 50 stores of XS Cargo, in accordance with the terms and conditions
set forth under the Agency Agreement.
10.
The Agency Agreement provides that the Liquidation shall be completed on or before
November 30, 2014, following which XS Cargo and the Agent shall, within a period
of thirty days thereafter, jointly prepare a final reconciliation of, inter cilia, all proceeds
received and expenses incurred in the context of the Liquidation.
11.
XS Cargo requires that the stay of proceedings resulting from the filing of the NOIs
be extended until October 31, 2014, in order to allow (i) the continuation of the
orderly liquidation of XS Cargo's assets in accordance with the Agency Agreement
and (ii) the preparation of a proposal to be submitted to XS Cargo's creditors.
12.
XS Cargo believes that, under the circumstances, the extension of the Stay is
necessary to maximize the value of its assets for the benefit of its stakeholders.
13.
XS Cargo has been acting and continue to act in good faith and with due diligence
during these proceedings.
14.
No creditor of XS Cargo will be materially prejudiced by the granting of the Second
Extension Order as XS Cargo has sufficient liquidities to continue operating during
the proposed stay extension period.
15.
It is just and convenient and in the interest of XS Cargo and its stakeholders that the
Second Extension Order sought herein be granted.
#11145673
-5-
OTHER GROUNDS
16.
Section 50.4(9) of the BIA, and the inherent and equitable jurisdiction of this
Honourable Court;
17.
Rules 1.04, 1.05, 2.03, 3.02 and 37 of the Rules of Civil Procedure, R.R.O. 1990 Reg.
194, as amended; and
18.
Such further grounds as counsel may advise and this Honourable Court may permit.
THE FOLLOWING DOCUMENTARY EVIDENCE will be used at the hearing of the
motion:
1.
The Affidavit of Duncan Reith sworn October 3, 2014 and the Exhibits referred to
therein;
2.
The Fourth Report of the Trustee; and
3.
Such further and other material as counsel may advise and this Court may permit.
#11145673
-6-
October 3, 2014
STIKEMAN ELLIOTT LLP
Barristers & Solicitors
40th Floor
1155 Rene Levesque Blvd. West
Montreal, Canada H3B 3V2
Guy P. Martel
Tel: (514) 397-3163
Fax: (514) 397-3222
5300 Commerce Court West
199 Bay Street
Toronto, Canada M5L 1B9
Maria Konyukhova LSUC#: 52880V
Tel: (416) 869-5230
Fax: (416) 869-0445
Lawyers for the Applicants
TO:
THE SERVICE LIST
W 1145673
IN THE MATTER OF THE NOTICE OF INTENTION TO MAKE A PROPOSAL UNDER THE BANKRUPTCY AND
INSOLVENCY ACT, R.S.C. 1985, c. B-3 OF XS CARGO LIMITED PARTNERSHIP AND OF XS CARGO GP INC.
Court File No. 32-1896275
MOTION OF XS CARGO LIMITED PARTNERSHIP AND OF XS CARGO GP INC. UNDER THE BANKRUPTCY AND
INSOLVENCY ACT, R.S.C. 1985, c. B-3
ONTARIO
SUPERIOR COURT OF JUSTICE
Proceeding commenced at Toronto
NOTICE OF MOTION
(Motion for an Order Extending the Stay of
Proceedings)
(Returnable on October 7, 2014)
STIKEMAN ELLIOTT LLP
Barristers & Solicitors
40th Floor
1155 Rene-Levesque Blvd. West
Montreal, QC H3B 3V2
Guy P. Martel
Tel: (514) 397-3163
Fax: (514) 397-3222
5300 Commerce Court West
199 Bay Street
Toronto, ON M5L 1B9
Maria Konyukhova LSUC#: 52880V
Tel: (416) 869-5230
Fax: (416) 869-0445
Counsels for the Applicants
#11145673
TAB 2
-1Court File Number: 32-1896275
Estate Number: 32-1896275
Estate Number: 32-1896278
ONTARIO
SUPERIOR COURT OF JUSTICE
COMMERCIAL LIST
IN THE CONSOLIDATED MATTERS OF THE NOTICE OF INTENTION TO MAKE A
PROPOSAL UNDER THE BANKRUPTCY AND INSOLVENCY ACT,
R.S.C. 1985, c. B-3, AS
AMENDED OF
XS CARGO LIMITED PARTNERSHIP
XS CARGO GP INC.
AFFIDAVIT OF DUNCAN REITH
(sworn October 3, 2014)
I, DUNCAN REITH, of the City of Toronto, in the Province of Ontario, MAKE OATH
AND SAY:
1.
I am the Chief Executive Officer of XS Cargo Limited Partnership ("XS LP"), and have
been employed in this capacity since January 9, 2012. As such, I am familiar with the business
and affairs of XS LP and of its general partner, XS Cargo GP Inc. ("XS GP", together with XS LP,
"XS Cargo" or the "Applicants").
2.
Except as otherwise indicated herein, the facts set forth in this Affidavit are based upon
my personal knowledge, my review of relevant documents and information provided to me by
employees working under my supervision, or my opinion based upon my experience,
knowledge and information concerning the operations of XS Cargo and the industry in which it
#11145682
-2operates its business. Where I do not possess such personal knowledge, I have stated the source
of my information and, in all such cases, do believe it to be true.
BACKGROUND
3.
XS Cargo is a Canadian discount retailer that operates through XS LP, a limited
partnership formed between XS GP and XSC Canada Holdings Inc. XS Cargo offers a wide
variety of goods, from furniture, to electronics, to housewares and kitchenware.
4.
As at the date of the filing of the NOIs (as defined below), XS Cargo operated and leased
50 stores (collectively, the "Stores") located in several Canadian provinces, namely in British
Columbia, Alberta, Saskatchewan, Manitoba, Ontario, New Brunswick, Nova Scotia and
Newfoundland, and employed approximately 650 employees, both full-time and part-time.
5.
On July 30, 2014, as a result of a liquidity crisis, XS LP and XS GP each filed a Notice of
Intention to Make a Proposal (collectively, the "NOIs") pursuant to section 50.4 of the
Bankruptcy and Insolvency Act (the "BIA"). PricewaterhouseCoopers Inc. was appointed as
trustee to the NOIs ("PwC" or the "Trustee").
6.
The filing of the NOIs were made in a context where XS LP and, de facto, its general
partner, XS GP, had become insolvent, and its senior secured lender, the Canadian Imperial
Bank of Commerce ("CIBC"), had advised it that it was no longer willing to continue to finance
its operations except in the context of a court-supervised sale, refinancing and investment
solicitation process in respect of its assets (the "SISP").
7.
Since XS Cargo had not been able at that time to secure agreements for a refinancing of
its indebtedness toward CIBC, on July 30, 2014, prior to filing the NOIs, XS Cargo entered into
#11145682
-3an Accommodation Agreement (the ''Accommodation Agreement") with CIBC pursuant to which
XS Cargo agreed to file the NOIs with a view of conducting a SISP.
8.
On August 6, 2014, the Honourable Justice Penny of the Ontario Superior Court of
Justice (Commercial List) heard and granted a motion by XS LP for, inter alia:
(a)
approving an administrative/procedural consolidation of the proposal
proceedings of XS LP and of XS GP;
(b)
approving the Accommodation Agreement and ratifying the execution thereof;
(c)
approving the SISP, as well as the specific milestones contemplated under the
Accommodation Agreement; and
(d)
approving a directors' and officers' charge, an administrative charge as well as a
charge in favour of certain key employees of XS Cargo.
A copy of the order rendered by Justice Penny, as issued and entered by the Court, is attached
as Exhibit A hereto.
THE SISP
9.
On August 21, 2014, after having canvassed the market in search of offers, the Trustee
and XS Cargo received, in the context of the SISP, offers (collectively, the "Offers") from ten
different parties (collectively, the "Offerors") interested in a transaction involving XS Cargo.
The Offers included the following:
(a)
one hybrid offer contemplating both the purchase of certain selected assets of XS
Cargo, as a going concern, and the liquidation of the remaining assets of XS
Cargo (the "Hybrid Offer");
#11145682
-4-
10.
(b)
three offers providing for a bridge financing in favour of XS Cargo; and
(c)
six pure liquidation offers.
On August 29, 2013, given the upcoming expiry of the stay of proceedings resulting
from the filing of the NOIs (the "Stay"), the Honourable Justice Pattillo of the Ontario Superior
Court of Justice (Commercial List) rendered an order extending the Stay until October 10, 2014,
allowing, inter alia, the Trustee and XS Cargo to properly review the Offers, pursue any
discussions or negotiations, as deemed necessary or desirable with certain Offerors and the
CIBC, and, ultimately, enter into a definitive and binding agreement in respect of its assets
and/or business. A copy of the order rendered by Justice Pattillo, as issued and entered by the
Court, is attached as Exhibit B hereto.
11.
On September 15, 2014, after lengthy negotiations with two of the above Offerors, due
consideration and consultation with the Trustee, XS Cargo determined that the Hybrid Offer
constituted the best offer under the circumstances. Accordingly, on the same date, XS Cargo
accepted the Hybrid Offer and entered into the following agreements, both of which were
subject to court approval:
(a) an Agency Agreement (the "Agency Agreement") with a Tiger Capital Group, LLC
("Tiger" or the "Agent") pursuant to which the Agent agreed to act as XS Cargo's
exclusive agent in the present proceedings for the limited purpose of liquidating
all of XS Cargo's assets related to its 50 Stores (the "Liquidation"), subject to the
option granted to the Purchaser (as defined below) under the APA (as defined
below); and
#11145682
-5(b) an Asset Purchase Agreement (the "APA") with 9014454 Canada Inc. (the
"Purchaser") pursuant to which the Purchaser was granted an option to
purchase, as a going concern, certain assets relating to up to 29 Stores, as further
described in the APA. Such option was to be exercised by no later than October
1, 2014.
12.
On September 19, 2014, the Honourable Justice Penny of the Ontario Superior Court of
Justice (Commercial List) granted an order (the "Approval and Vesting Order") approving,
inter alia, the transactions contemplated under Agency Agreement and the APA. A copy of the
order rendered by Justice Penny (along with his endorsement), as issued and entered by the
Court, is attached as Exhibit C hereto.
13.
On September 26, 2014, XS Cargo was, however, advised by the Purchaser that due to its
inability to secure necessary financing, it would not go forward with the transaction
contemplated under the APA. As a result, the Agent would pursue the Liquidation of all 50
Stores of XS Cargo, in accordance with the terms and conditions set forth under the Agency
Agreement.
14.
The Agency Agreement provides that the Liquidation shall be completed on or before
November 30, 2014, following which XS Cargo and the Agent shall, within a period of thirty
days thereafter, jointly prepare a final reconciliation of, inter alia, all proceeds received and
expenses incurred in the context of the Liquidation.
EXTENTION OF THE STAY
15.
XS Cargo requires that the stay of proceedings resulting from the filing of the NOIs be
extended until October 31, 2014, in order to allow (i) the continuation of the orderly liquidation
#11145682
-6of XS Cargo's assets in accordance with the Agency Agreement and (ii) the preparation of a
proposal to be submitted to XS Cargo's creditors.
16.
At this stage, although no proposal has yet been finalized, XS Cargo is nonetheless in the
process of determining what the terms of a viable proposal would be.
17.
Under the circumstances, I believe that the extension of the Stay is necessary, as it would
potentially allow the maximization of the value of XS Cargo's assets for the benefit of its
stakeholders.
18.
The Applicants have been acting and continue to act in good faith and with due
diligence during these proceedings.
19.
I believe that no creditor of XS Cargo will be materially prejudiced by the granting of the
Second Extension Order as XS Cargo has sufficient liquidities to continue operating during the
period covered by the proposed stay extension period.
CONCLUSIONS
20.
For the reasons set forth above, I believe it is both appropriate and necessary that the
relief being sought be granted. With such relief, XS Cargo will be able to continue the
Liquidation in an orderly fashion, and, if circumstances permit, submit to its creditors a
proposal within the next stay extension period.
#11145682
-7-
21.
This Affidavit is sworn in support of a Motion for an Order Extending the Stay of
Proceedings, and for no other or improper purpose.
SWORN before me in the city of
Tar-on 4o on this
day of
2014.
)
OC.E760;
)
)
)
)
L:j.st•°— P/64)1 /4•SU
) DUNCAN REITH
)
Adebola Momtake Adenban, a CcdmnIsatffirselb.,
Province of Ontario. while a Student-at taw.
Expires April 10, 2016
#11145682
IN THE CONSOLIDATED MATTERS OF THE NOTICE OF INTENTION TO MAKE A PROPOSAL UNDER
THE BANKRUPTCY AND INSOLVENCY ACT, R.S.C. 1985, c. B-3 OF XS CARGO LIMITED PARTNERSHIP
AND OF XS CARGO GP INC.
Court File No. 32-1896275
MOTION OF XS CARGO LIMITED PARTNERSHIP AND OF XS CARGO GP INC. UNDER THE BANKRUPTCY
AND INSOLVENCY ACT, R.S.C. 1985, c. B-3
ONTARIO
SUPERIOR COURT OF JUSTICE
COMMERCIAL LIST
Proceedings commenced at Toronto
AFFIDAVIT OF DUNCAN REITH
(SWORN ON OCTOBER 3, 2014)
STIKEMAN ELLIOTT LLP
40th Floor
1155 Rene Levesque Blvd. West
Montreal, Canada H313 3V2
Guy P. Martel
Tel: (514) 397-3163
Fax: (514) 397-3222
5300 Commerce Court
199 Bay St.
Toronto, Canada M5L 1B9
Maria Konyukhova LSUC#: 52880V
Tel: (416) 869-6820
Fax: (416) 947-0866
Counsels for the Applicants
#11145682
TAB 2A
This is Exhibit "A"
to the affidavit of Duncan Reith,
sworn before me on the 3rd day
of October, 2014
Commissioner for Taking Affidavits
Adebota Morolake Adeniran, a Commissioner, etc..
Province of Ontario, while a Student-at-taw•
Wires April 10, 2018
Court File No. 32-1896275
ONTARIO
SUPERIOR COURT OF JUSTICE
COMMERCIAL LIST
THE HONOURABLE h1/411%.,
WEDNESDAY, THE 6th
JUSTICE
DAY OF AUGUST, 2014
IN THE MATTER OF THE BANKRUPTCY AND INSOLVENCY ACT,
AS AMENDED
R.S.C. 1985, c. B-3,
IN THE MA'T'ER OF THE NOTICE OF INTENTION TO MAKE A PROPOSAL OF XS
CARGO LIMITED PARTNERSHIP
ORDER
THIS MOTION, made by XS Cargo Limited Partnership ("XS LP"), pursuant to, inter
alia, sections 64.1, 64.2 and 183 of the Bankruptcy and Insolvency Act, R.S.C. 1985, c. B-3, as
amended (the "BIA") was heard this day at 330 University Avenue, Toronto, Ontario.
ON READING the affidavit of Duncan Reith sworn August 1, 2014 and the exhibits
thereto (the "Reith Affidavit"), and on hearing the submissions of counsel for XS LP and XS
Cargo GP Inc. ("XS GP, together with XS LP, "XS Cargo"), counsel for the Canadian Imperial
Bank of Commerce ("CIBC") and of PricewaterhouseCoopers Inc., in its capacity as trustee to
the Notices of Intention to Make a Proposal (collectively, the "NOIs") of each of XS LP and
XS GP (the "Trustee"), and on being advised that the secured creditors who are likely to be
affected by the charges created herein were given notice:
11114865 v9
-2-
SERVICE
1.
THIS COURT ORDERS that the time for service of the Notice of Motion and the
Motion Record is hereby abridged and validated so that this Motion is properly returnable
today and hereby dispenses with further service thereof.
ADMINISTRATIVE CONSOLIDATION
2.
THIS COURT ORDERS that the proposal proceedings of XS LP (estate number: 32-
1896275) and XS GP (estate number 32-1896278) (collectively, the "Proposal Proceedings")
are hereby administratively consolidated and the Proposal Proceedings are hereby
authorized and directed to continue under the following joint title of proceedings:
Estate Number: 32-1896275
Court File Number: 32-1896275
IN THE MATTER OF THE NOTICE OF INTENTION TO MAKE A PROPOSAL OF XS
CARGO LIMITED PARTNERSHIP
Estate Number: 32-1896278
Court File Number: 32-1896278
IN THE MAI I ER OF THE NOTICE OF INTENTION TO MAKE A PROPOSAL OF XS
CARGO GP INC.
3.
THIS COURT ORDERS that all further materials in the Proposal Proceedings shall
be filed with the Commercial List Office only in the XS LP estate and court file, estate
number 32-1896275 and court file number 32-1896275.
APPROVAL OF SISP
4.
THIS COURT ORDERS that the sale, refinancing and investment solicitation process
in respect of XS Cargo's assets (the "SISP"), as set out in the Reith Affidavit, be and is hereby
11114865 v9
-3-
approved and that the Trustee is hereby authorized and empowered to take such steps as are
necessary or desirable to carry out the SISP, provided that any definitive agreement to be
executed by XS Cargo in respect of the sale of all or part of the Property (as defined below)
shall require further approval of this Court.
ACCOMMODATION AGREEMENT
5.
THIS COURT ORDERS that the Accommodation Agreement (Exhibit B to the Reith
Affidavit) (the "Accommodation Agreement"), is hereby approved, the execution thereof is
hereby ratified and that XS Cargo is hereby authorized and empowered to perform its
obligation thereunder.
CASH MANAGEMENT
6.
THIS COURT ORDERS that all cash management and banking arrangements
presently in existence between XS LP and CIBC shall be maintained during these
proceedings.
DIRECTORS' AND OFFICERS' INDEMNIFICATION AND CHARGE
7.
THIS COURT ORDERS that XS Cargo shall indemnify its directors and officers
(collectively, the "D&Os") against obligations and liabilities that they may incur as directors
or officers of XS Cargo after the filing of the NOIs, except to the extent that, with respect to
any of the D&Os, the obligation or liability was incurred as a result of the such D&O's gross
negligence or wilful misconduct.
8.
THIS COURT ORDERS that the D&Os of XS Cargo shall be entitled to the benefit of
and are hereby granted a charge (the "D&O Charge") on all of XS Cargo's current and future
11114865 v9
-4-
assets, undertakings and properties of every nature and kind whatsoever, and wherever
situate including all proceed thereof (the "Property"), which charge shall not exceed an
aggregate amount of $1,571,000, as security for all claims relating to any obligations or
liabilities the D&Os may incur after the filing of the NOIs in relation to their respective
capacities as directors or officers for: (a) goods and services tax and all other amounts
payable under Part IX the Excise Tax Act (Canada) (the "ETA") or any similar legislation in
any other jurisdiction of Canada, including the Quebec sales tax imposed pursuant to an Act
Respecting the Quebec Sales Tax and any amount payable as harmonized sales tax in any
applicable province under the ETA, (b) all other provincial taxes payable under any
provincial jurisdiction of Canada, (c) wages and vacation pay not already covered by Section
81.3 of the 81A, and (d) for severance obligations for XS LP's current employees in the
Province of Saskatchewan up to a maximum of $41,397, except where such obligations or
liabilities were incurred as a result of such directors' or officers' gross negligence, willful
misconduct or gross or intentional fault. The D&O Charge shall have the priority set out in
paragraphs 15 and 17 herein.
9.
THIS COURT ORDERS that, notwithstanding any language in any applicable
insurance policy to the contrary, (a) no insurer shall be entitled to be subrogated to or claim
the benefit of the D&O Charge, and (b) the D&Os shall only be entitled to the benefit of the
D&O Charge to the extent that they do not have coverage under any directors' and officers'
insurance policy, or to the extent that such coverage is insufficient to pay amounts
indemnified in accordance with paragraph 8 of this Order.
11114865 v9
-5-
ADMINISTRATION CHARGE
10.
THIS COURT ORDERS that the Trustee, counsel to the Trustee and counsel to XS
Cargo shall be paid their reasonable fees and disbursements, in each case at their standard
rates and charges, by XS Cargo as part of the costs of these proceedings. XS Cargo is hereby
authorized and directed to pay the accounts of the Trustee, counsel for the Trustee and
counsel for XS Cargo as such accounts are rendered.
11.
THIS COURT ORDERS that the Trustee and its legal counsel shall pass their
accounts from time to time, and for this purpose the accounts of the Trustee and its legal
counsel are hereby referred to a judge of the Commercial List of the Ontario Superior Court
of Justice.
12.
THIS COURT ORDERS that the Trustee, counsel to the Trustee and counsel to XS
Cargo shall be entitled to the benefit of and are hereby granted a charge (the
"Administration Charge'") on the Property, which charge shall not exceed $260,000, as
security for their professional fees and disbursements incurred at the standard rates and
charges of the Trustee and such counsels, after the filing of the NOIs in respect of these
proceedings. The Administration Charge shall have the priority set out in paragraphs 15 and
17 herein.
KERP CHARGE
13.
THIS COURT ORDERS that the Key Employee Retention Plans (the "KERP") filed
with the Court are hereby ratified and that XS Cargo is hereby authorized and empowered to
perform its obligation thereunder and to make the payments in accordance with the terms
set out in said KERP.
11114865 v9 •
-6-
14.
THIS COURT ORDERS that the employees eligible under the KERP shall be entitled
to the benefit of and are hereby granted a charge (the "KERP Charge") on the Property,
which charge shall not exceed $380,000, as security for payment of the obligations set forth
under the KERP. The KERP Charge shall have the priority set out in paragraphs 15 and 17
herein.
VALIDITY AND PRIORITY OF CHARGES CREATED BY THIS ORDER
15.
THIS COURT ORDERS that the priorities of the D&O Charge, the Administration
Charge, the KERP Charge, as among them, shall be as follows:
First - Administration Charge (to the maximum amount of $260,000);
Second - D&O Charge (to the maximum amount of $1,571,000); and
Third - KERP Charge (to the maximum amount of $380,000).
16.
THIS COURT ORDERS that the filing, registration or perfection of the D&O Charge,
the Administration Charge or the KERP Charge (collectively, the "Charges") shall not be
required, and that the Charges shall be valid and enforceable for all purposes, including as
against any right, title or interest filed, registered, recorded or perfected subsequent to the
Charges coming into existence, notwithstanding any such failure to file, register, record or
perfect.
17.
THIS COURT ORDERS that the Charges shall constitute a charge on the Property
and such Charges shall rank ahead in priority to all other security interests, trusts, liens,
charges and encumbrances, claims of secured creditors, statutory or otherwise (collectively,
"Encumbrances") in favour of any person, except for the Encumbrances in favour of those
11114865 v9
-7-
that have not been served with notice of this application. XS Cargo and the beneficiaries of
the Charges shall be entitled, if necessary, to seek priority ahead of any Encumbrances in
favour of any person that have not been served with notice of this application and that are
likely to be affected by such priority.
18.
THIS COURT ORDERS that except as otherwise expressly provided for herein, or as
may be approved by this Court, XS Cargo shall not grant any Encumbrances over any
Property that rank in priority to, or
pari passu with, any of the Charges, unless XS Cargo also
obtains the prior written consent of the Trustee, the beneficiaries of the Charges, or further
Order of this Court.
19.
THIS COURT ORDERS that the Charges shall not be rendered invalid or
unenforceable and the rights and remedies of the chargees entitled to the benefit of the
Charges (collectively, the "Chargees") thereunder shall not otherwise be limited or impaired
in any way by (a) the pendency of these proceedings and the declarations of insolvency
(expressly or impliedly) made herein; (b) any motion(s) for bankruptcy order(s) issued
pursuant to BIA, or any bankruptcy order made pursuant to such motion(s); (c) any
assignments for the general benefit of creditors made or deemed to have been made
pursuant to the BIA; (d) the provisions of any federal or provincial statutes; or (e) any
negative covenants, prohibitions or other similar provisions with respect to borrowings,
incurring debt or the creation of Encumbrances, contained in any existing loan documents,
lease, sublease, offer to lease or other agreement (collectively, an "Agreement") which binds
XS Cargo, and notwithstanding any provision to the contrary in any Agreement
-8-
(a)
neither the creation of the Charges nor the payments made in accordance with the
KERP shall create or be deemed to constitute a breach by XS Cargo of any
Agreement to which it is a party;
(b)
none of the Key Employees (as defined in the Motion) or Chargees shall have any
liability to any Person whatsoever as a result of any breach of any Agreement
caused by or resulting from XS Cargo making payments in accordance with the
KERP, the creation of the Charges, or the execution, delivery or performance of
any related documents; and
(c)
the payments made by XS Cargo pursuant to this Order, and the granting of the
Charges, do not and will not constitute preferences, fraudulent conveyances,
transfers at undervalue, oppressive conduct, or other challengeable or voidable
transactions under any applicable law.
20.
THIS COURT ORDERS that any Charge creat e d by this Order over leases of real
property in Canada shall only be a Charge in XS Cargo's interest in such real property leases.
CONFIDENTIALITY
21.
THIS COURT ORDERS that XS Cargo' financial statements (Exhibit C to the Reith
Affidavit) and the unredacted versions of the KERP filed with the Court shall be kept
confidential and under seal with the Court until, as the case may be, further order of this
Court.
11114865 v9
-9-
SERVICE AND NOTICE
22.
THIS COURT ORDERS that the E-Service Protocol of the Commercial List (the
"Protocol") is approved and adopted by reference herein and, in this proceeding, the service
of documents made in accordance with the Protocol (which can be found on the Commercial
List website at http://www.ontariocourts.ca/scypractice/practice-directions/toronto/eservice-protocol!) shall be valid and effective service. Subject to Rule 17.05 this Order shall
constitute an order for substituted service pursuant to Rule 16.04 of the Rules of Civil
Procedure. Subject to Rule 3.01(d) of the Rules of Civil Procedure and paragraph 21 of the
Protocol, service of documents in accordance with the Protocol will be effective on
transmission. This Court further orders that a Case Website shall be established in
accordance with the Protocol with the following URL
23.
`www.pwc.com/ car-xscargo'.
THIS COURT ORDERS that if the service or distribution of documents in
accordance with the Protocol is not practicable, the Receiver is at liberty to serve or distribute
this Order, any other materials and orders in these proceedings, any notices or other
correspondence, by forwarding true copies thereof by prepaid ordinary mail, courier,
personal delivery or facsimile transmission to XS Cargo's creditors or other interested parties
at their respective addresses as last shown on the records of XS Cargo and that any such
service or distribution by courier, personal delivery or facsimile transmission shall be
deemed to be received on the next business day following the date of forwarding thereof, or
if sent by ordinary mail, on the third business day after mailing.
11114865 v9
- 10 -
GENERAL
24.
THIS COURT ORDERS that the Trustee shall not take possession of the Property
and shall take no part whatsoever in management or supervision of the management of the
business of XS Cargo and shall not, in carrying out the SISP or otherwise fulfilling its
obligations hereunder or under the BIA, be deemed to have taken possession or control of
the Business or Property, or any part thereof.
25.
THIS COURT ORDERS that, in addition to the rights and protections afforded the
Trustee under the BIA or as an officer of this Court, the Trustee shall incur no liability or
obligation as a result of its appointment or the carrying out of the SISP or the provisions of
this Order, save and except for any gross negligence or wilful misconduct on its part.
Nothing in this Order shall derogate from the protections afforded the Trustee by the BIA or
any applicable legislation.
26.
THIS COURT HEREBY REQUESTS the aid and recognition of any court, tribunal,
regulatory or administrative body having jurisdiction in Canada or in the United States, to
give effect to this Order and to assist XS Cargo, the Trustee and their respective agents in
carrying out the terms of this Order. All courts, tribunals, regulatory and administrative
bodies are hereby respectfully requested to make such orders and to provide such assistance
to XS Cargo and to the Trustee, as an officer of this Court, as may be necessary or desirable to
give effect to this Order, to grant representative status to the Trustee in any foreign
proceeding, or to assist XS Cargo and the Trustee and their respective agents in carrying out
the terms of this Order.
11114865 v9
27.
THIS COURT ORDERS that each of XS Cargo and the Trustee be at liberty and is
hereby authorized and empowered to apply to any court, tribunal, regulatory or
administrative body, whereby located, for the recognition of this Order and for assistance in
carrying out the terms of this Order, including the enforcement of any Charge established
hereby.
28.
THIS COURT ORDERS that any interested party (including XS Cargo and the
Trustee) may apply to this court to vary or amend this Order on not less than seven (7) days
notice to any other party or parties likely to be affected by the order sought or upon such
other notice, if any as this court may order.
I 1:51 ‘ fir
Court File Number ; Z
Superior Court of Justice
Commercial List
FILE/DIRECTION/ORDER
VA.: X s
CaA-645.
CI At
Li
Plaintiff(s)
AND
Defendant(s)
Case Management 0 Yes ❑ No by Judge:
Telephone No:
Counsel
Facsimile No:
0 Direction for Registrar (No format order need be taken out)
❑ Order
0 Above action transferred to the Commercial List at Toronto (No formal order need be taken out)
❑ Adjourned to:
❑ Time Table approved (as follows):
e!.u... g.4
2.).sc
A.A.
1 %0Ift
Usti. ccist ."
►
V2harVZSI;ru"-1
... .
Ca
al(
%.,...ITG...:
"?L tt
c-LaP._
it--9..,
tb-4■9-44. 41■Imak» iC
A-L-cu.....A--44 ka
.-----1:U.
0*%-01.-
a''V" ""-4
':et
'6•■ •%rt‘ta..) /
1
:is•.4-0.Adtc
.
.1.,-11"4.-s."44- .
&I.44.-.9-0
Date
'1%•
--'4r
s ,,
:r.
Judge's Signatctfe
0 Additional Pages
Ir .
S.% )..&
TAB 2B
This is Exhibit "B"
to the affidavit of Duncan Reith,
sworn before me on the 3rd day
of October, 2014
Commissioner for Taking Affidavits
Adebola Morolake Adenkan, a CorrenIsskreg, et0.,
Province of Ontario, While
Expires April 10, 2016
a Stuflantakaa.
Court File No. 32-1896275
ONTARIO
SUPERIOR COURT OF JUSTICE
COMMERCIAL LIST
THE HONOURABLE
FRIDAY, THE 29th
JUSTICE PA I-1 ILLO
DAY OF AUGUST, 2014
IN THE CONSOLIDATED MATTERS OF THE NOTICE OF INTENTION TO MAKE A
PROPOSAL UNDER THE BANKRUPTCY AND TNSOL'VENCY ACT ACT,
R.S.C. 1985, c. B3, AS AMENDED OF
XS CARGO LIMITED PARTNERSHIP
XS CARGO GP INC.
ORDER
THIS MOTION, made by XS Cargo Limited Partnership ("XS LP") and XS Cargo GP
Inc. ("XS GP", collectively with XS LP, "XS Cargo" or the "Applicants"), pursuant to, inter
alia, section 50.4(9) of the Bankruptcy and Insolvency Act, R.S.C. 1985, c. B-3, as amended (the
"BIA") was heard this day at 330 University Avenue, Toronto, Ontario.
ON READING the Notice of Motion of the Applicants, the affidavit of Duncan Reith
sworn August 25, 2014 and the Second Report of PricewaterhouseCoopers Inc., in its
capacity as proposal trustee of each of the Applicants (the "Trustee") and on hearing from
counsel for the Applicants and the Trustee and such other counsel as were present, no one
else appearing although duly served as appear from the affidavit of service, filed.
#11131640
-2-
1.
THIS COURT ORDERS that the time for service of the Notice of Motion and the
Motion Record is hereby abridged and validated so that this Motion is properly returnable
today and hereby dispenses with further service thereof.
2.
THIS COURT ORDERS that the time for the filing of a proposal by the Applicants is
hereby extended in accordance with section 50.4(9) of the I31A until October 10, 2014.
3.
THIS COURT ORDERS that the Confidential Bid Summary and the Backstop
Cashflow (both as defined in the Trustee's Second Report to the Court dated August 27,
2014) filed with the Court shall be kept confidential and under seal until further order from
this Court.
#11131640
TAB 2C
This is Exhibit "C"
to the affidavit of Duncan Reith,
sworn before me on the 3rd day
of October, 2014
Commissioner for Taking Affidavits
Adebola Moro lake Adenkan. a COMMSSIMPEC, etc„
Province of Ontario, while a Matt-014am
Expires PO 10. 2018
Court File No. 32-1896275
ONTARIO
SUPERIOR COURT OF JUSTICE
COMMERCIAL LIST
THE HONOURABLE V1/4141. .
JUSTICE P640 N
FRIDAY, THE 19th
y
DAY OF SEPTEMBER, 2014
SOLIDATED MATTERS OF THE NOTICE OF INTENTION TO MAKE A
DER THE BANKRUPTCY AND INSOLVENCY ACT,
R.S.C. 1985, c. B-3, AS
AMENDED OF
XS CARGO LIMITED PARTNERSHIP
XS CARGO GP INC.
APPROVAL AND VESTING ORDER
THIS MOTION, made by XS Cargo Limited Partnership ("XS LP") and XS Cargo GP
Inc. ("XS GP", collectively with XS LP, "XS Cargo" or the "Applicants"), pursuant to sections
65.13(4) of the Bankruptcy and Insolvency Act, R.S.C. 1985, c. B-3, as amended (the "BIA") and
section 137(2) of the Courts of Justice Act, R.S.O. 1990, Ch. C-43 (Ontario) for an order, inter
alia:
a) approving the transactions contemplated under an Agency Agreement
entered into
between the Applicants and Tiger Capital Group, LLC ("Tiger" or the "Agent'') on
September 15, 2014, as referred to in the Affidavit of Duncan Reith sworn on
September 15, 2014 (the "Reith Affidavit"), which agreement has been amended and
restated on September 19, 2014 (as amended and restated, the "Agency Agreement"),
#11137346
. ,014
-2-
as referred to in the Supplemental Affidavit of Duncan Reith sworn on September 19,
2014 (the "Supplemental Reith Affidavit"), as well as the granting of the Agent's
Charge (as defined below);
b) approving the transactions contemplated under an
Asset Purchase Agreement (the
"APA") entered into between the Applicants and 9014454 Canada Inc. (the
"Purchaser") on September 15, 2014, as referred to in the Reith Affidavit;
c) vesting in and to the Purchaser all of the Applicants' right, title and interest in and to
the assets designated in the APA (collectively, the "Purchased Assets") upon closing
of the APA;
d) authorizing and directing the Applicants, in accordance with the terms of the Agency
Agreement, to make (i) an interim distribution to the Canadian Imperial Bank of
Commerce ("CIBC") of an amount equal to $5,000,000 out the portion of Guaranteed
Amount (as defined in the Agency Agreement) payable by the Agent upon issuance
of this Order (referred to in the Agency Agreement as the "Initial Guaranty
Payment"), as well as (ii) subsequent distribution(s) to CIBC for any amounts
remaining owing to CIBC, out of the balance of the Guaranteed Amount payable by
the Agent and/or of the Primary Amount payable under the APA on or after the
Remaining Guaranty Payment Date; and
e) sealing the unredacted copies of the Agency Agreement, the APA and of the
Applicants' revised cash-flow forecast, including the schedules thereto;
was heard this day at 330 University Avenue, Toronto, Ontario.
#11137346
-3-
ON READING the Notice of Motion of the Applicants, the Reith Affidavit, the
Supplemental Reith Affidavit and the Third Report to the Court of PricewaterhouseCoopers
Inc., in its capacity as trustee under the Notices of Intentions to Make a Proposal
(collectively, the "NOIs") filed by of each of the Applicants (the "Trustee"), and on hearing
the submissions from respective counsel for the Applicants, the Trustee, the Agent, the
Purchaser and CIBC, and such other counsel as were present, no one else appearing although
duly served as appear from the affidavit of service, filed:
SERVICE AND DEFINITIONS
1.
THIS COURT ORDERS that the time for service of the Notice of Motion and the
Motion Record is hereby abridged and validated so that this Motion is properly returnable
today and hereby dispenses with further service thereof.
2.
THIS COURT ORDERS that unless otherwise defined herein, all capitalized terms
shall have the meaning attributed to them in the Agency Agreement.
APPROVAL OF THE AGENCY AGREEMENT
3.
THIS COURT ORDERS AND DECLARES that the transactions contemplated under
the Agency Agreement are hereby approved, and that the execution of the Agency
Agreement is hereby authorized, approved and ratified, with such minor amendments as the
Applicants (with the consent of the Trustee) and the Agent may agree to in writing. The
Applicants are authorized and directed to take such additional steps or actions and execute
such additional documents, as may be necessary or desirable for the completion of the
transactions contemplated under the Agency Agreement.
#11137345
-4-
4.
THIS COURT ORDERS AND DECLARES that the Applicants and the Agent shall
be authorized to conduct the sale and liquidation contemplated under the Agency
Agreement (the "Liquidation") in accordance terms thereof and the Sales Guidelines annexed
to the Agency Agreement as Exhibit 8.1 (the "Guidelines"). In this context, the Applicants
and the Agent shall be authorized to:
a) advertise, post signs and otherwise promote the Liquidation without further consent
of any person (other than the Applicants and the Purchaser as provided under the
Agency Agreement) in accordance with the Agency Agreement and the Guidelines;
and
b) use the stores identified in the Agency Agreement (collectively, the "Closing Stores")
and all related store services, furniture, fixtures, equipment and other assets of the
Applicants as designated under the Agency Agreement for the purpose of conducting
the Liquidation, free of any interference from any landlord, entity or person, the
whole subject to the terms of the Agency Agreement, including those relating to the
Closing Stores identified in Exhibit 1B of the Agency Agreement (collectively, the
"APA Closing Stores").
5.
THIS COURT ORDERS AND DECLARES that, notwithstanding the sale of the
Applicants' intellectual property under the APA, the Applicants and the Agent shall be
authorized to use, until November 30, 2014, or such other date on which the Applicants and
the Agent agree in writing that the Liquidation is completed, all of the Applicants'
intellectual property, including, without limitation, the Applicants' trade names, logos,
domain names, internet websites, social media sites, customer and marketing lists (including
C1137346
-5-
all email and other electronic addresses), relating to and used in connection with the
Applicants' business and operations, solely for the purpose of advertising, promoting and
conducting the Liquidation in accordance with the terms of the Agency Agreement and the
Guidelines.
6.
THIS COURT ORDERS AND DECLARES that, subject to the terms of the Agency
Agreement, including those relating to the APA Closing Stores, upon the closing of the
transactions contemplated by the APA, the Agent shall be entitled to sell all Merchandise
and all furniture, fixtures and equipment (the "FF&E") that is owned by the Applicants
and located in the Closing Stores and the DCs on the first calendar day following the
issuance of this Order, free and clear of any and all Encumbrances (as defined below),
including, without limitation, the charges created by Order of the Honourable Justice
Penny dated August 6, 2014 in the context of these proceedings (collectively, the "NOI
Charges"), with any Encumbrances presently existing over all or any portion of the
Merchandise, the FF&E or the revenues resulting from the sale of Merchandise during
the Sale Term and all service revenue received in the Closing Stores during the Sale
Term (collectively, the "Proceeds") attaching only to the Guaranteed Amount and other
amounts to be received by the Applicants under the Agency Agreement, in the same
order of priority.
7.
THIS COURT ORDERS AND DECLARES that no Encumbrances shall attach to
the portion of the Proceeds which are payable by the Applicants to, or retained by, the
Agent in accordance with the Agency Agreement, or to any amounts that must be
reimbursed by the Applicants to the Agent in the event that Agent over-funds any
amounts due to the Applicants, and the Applicants will pay such amounts to the Agent,
#11137346
-6-
or the Agent will retain them, free and clear of all Encumbrances notwithstanding any
enforcement, all in accordance with the Agency Agreement
8.
THIS COURT ORDERS AND DECLARES that the Agent shall act solely as an
agent of the Applicants and that it shall not be liable for any claims against the Applicants
other than as expressly provided in the Agency Agreement. More specifically:
a) the Agent shall not be deemed to be in possession or control of the Closing Stores, of
the assets located therein or associated therewith or of the Applicants' employees
located at the Closing Stores or any other property of the Applicants;
b) the Agent shall not be deemed to be a successor employer or a related or common
employer or payor within the meaning of any legislation governing employment or
labour standards or pension benefits or health and safety or other statute, regulation
or rule of law or equity for any purpose whatsoever, and shall not incur any
successorship liabilities whatsoever;
c) the Applicants shall bear all responsibility for any liability whatsoever (including
without limitation losses, costs, damages fines, damages or awards) relating to claims
of customers, employees and any other persons arising from events occurring at the
Closing Stores and at the Applicants distribution centers located in Mississauga and
Edmonton (collectively, the ''DCs") during and after the term of the Agency
Agreement, or otherwise in connection with the Liquidation, except in accordance
with the Agency Agreement to the extent any such claim arises directly from the
wilful misconduct or gross negligence of the Agent, or its supervisors, agents,
independent contractors or employees located at the Closing Stores.
#11137346
-7-
9.
THIS COURT ORDERS AND DECLARES that the claims of the Agent pursuant to
the Agency Agreement (collectively, the "Agent's Claims") shall not be compromised or
arranged pursuant to any proposal to be filed by the Applicants pursuant to the BIA, that the
Agent shall be treated, with regards to such Agent's Claims, as an unaffected creditor in the
context of the present proceedings and in any such proposal and that, in accordance with
section 69.4 of the BIA, the Agent shall not be affected by the stay of proceedings resulting
from the filing of the Applicants respective NOIs and shall be entitled to exercise its
remedies under the Agency Agreement.
10.
THIS COURT ORDERS AND DECLARES that, subject to paragraph 11 hereof, the
Agent shall be entitled to the benefit of and is hereby granted a charge (the "Agent's
Charge") on all of the Merchandise and the Proceeds thereof (including all proceeds from the
sale of FF&E), as security for the payment of the Agent's Claims. The Agent's Charge shall
constitute a charge on the Merchandise, the Proceeds and all proceeds from the sale of FF&E
and shall rank ahead in priority to all Encumbrances (as defined below) in favour of any
person, including the NOI Charges. The Applicants shall not grant any Encumbrances over
the Merchandise, the Proceeds or the proceeds from the sale of FF&E that rank in priority to
or pan passu with the Agent's Charge.
11.
THIS COURT ORDERS AND DECLARES that, notwithstanding any order
contained herein, following the weekly reconciliation of Expenses pursuant to section 8.7 of
the Agency Agreement and reimbursement of such Expenses thereunder, the Expenses as
reimbursed to the Applicants by the Agent in accordance with the Agency Agreement shall
not be subject to the Agent's Charge. Reimbursement of Expenses by the Agent to the
#11137346
-8-
Applicants shall be deposited, free of the Agent's Charge, into an account designated by the
Applicants and CIBC which shall not be a Designated Deposit Account.
12.
THIS COURT ORDERS AND DECLARES that the filing, registration or perfection
of the Agent's Charge shall not be required, and the Agent's Charge shall be valid and
enforceable for all purposes, including as against any right, title or interest filed, registered,
recorded or perfected subsequent to the Agent's Charge coming into existence,
notwithstanding any such failure to file, register, record or perfect.
13.
THIS COURT ORDERS AND DECLARES that notwithstanding the terms of any
order issued by this Court in the context of the present proceedings or the terms of the BIA,
the Applicants shall not be entitled to disclaim or resiliate the Agency Agreement or any the
agreements, contracts or arrangement in relation thereto entered into with the Agent.
14.
THIS COURT ORDERS that cash or cash equivalents placed on deposit by the
Applicants or the Agent with any person during the period between the date of this Order
and five Business Days following the Final Reconciliation Date, whether in an operating
account or otherwise for itself or for another entity, including in any Designated Deposit
Accounts under the Agency Agreement, shall not be applied by such person in reduction or
repayment of amounts owing to such person as of the date of this Order, or due on or before
the Final Reconciliation Date, or in satisfaction of any interest or charges accruing in respect
thereof; however, this provision shall not prevent any financial institution from: (i)
reimbursing itself for the amount of any cheques drawn by the Applicants and properly
honoured by such institution, or (ii) holding the amount of any cheques or other instruments
#1 1137346
-9-
deposited into the Applicants' account until those cheques or other instruments have been
honoured by the financial institution on which they have been drawn;
15.
THIS COURT ORDERS that the Applicants are authorized and directed to make:
) an interim distribution to CIBC of an amount equal to $5,000,000 out of the Initial
Guaranty Payment, forthwith after receipt thereof by the Applicants; and
b) subsequent distribution(s) to CIBC for any amounts remaining owing to CIBC out
of the balance of the Guaranteed Amount and/or of the Primary Amount (as
defined in the APA) payable by the Agent or the Purchaser to the Applicants in
accordance with the Agency Agreement or the APA, respectively. Such
distribution(s) shall be made forthwith upon receipt by the Applicants of the
balance of the Guaranteed Amount and/or of the Primary Amount on or after the
Remaining Guaranty Payment Date.
APPROVAL OF THE ASSET PURCHASE AGREEMENT
16.
THIS COURT ORDERS AND DECLARES that the transactions contemplated under
the APA are hereby approved, and that the execution of the APA is hereby authorized,
approved and ratified, with such minor amendments as the Applicants (with the consent of
the Trustee) and the Purchaser may agree to in writing. The Applicants are authorized and
directed to take such additional steps or actions and execute such additional documents, as
may be necessary or desirable for the completion of the transactions contemplated under the
APA and the conveyance of the Purchased Assets to the Purchaser.
#11137346
-
17.
10-
THIS COURT ORDERS AND DECLARES that the transactions con templated under
the APA shall be exempt from the application of any applicable provincial Bulk Sales Act and
any other equivalent federal or provincial legislation.
18.
THIS COURT ORDERS AND DECLARES that the Applicants are authorized,
following the completion of the transactions contemplated under the APA, to execute,
deliver and file any document, including without limitation, any articles of amendment or
the filing of an updated dedaration of limited partnership, required in order to effect a
change of the Applicants' corporate or limited partnership name, as the case may be, and this
Court waives any third party requirement or required consent pursuant to any Canadian
federal or provincial legislation relating to same.
19.
THIS COURT ORDERS that, in accordance with the APA, the Applicants are
authorized and directed to:
a) direct the payment of that portion of the Primary Amount to be paid by the
Purchaser at the Closing (as defined and as contemplated in the APA) to the
Agent;
b) direct that the Newco Acquisition Shares (as defined in the APA) be issued and
registered in the name of the parties identified in the APA (the "Beneficiaries"),
and that such Newco Acquisition Shares be delivered to and held in trust by the
Trustee until: (i) any and all amounts owing to CIBC have been repaid in full, (ii)
the Trustee has received a satisfactory opinion from counsel confirming the
validity and enforceability of the security interests of the Beneficiaries in the
property of the Applicants, and (iii) the Trustee has delivered to the Service List a
#11137346
notice confirming having received such opinion, following which the Trustee
shall, after five Business Days following delivery of the foregoing notice, release
the Newco Acquisition Shares to the Beneficiaries to the extent they have
outstanding claims against the Applicants, unless, within such time period, an
order is obtained by an interested party challenging the release of the Newco
Acquisition Shares on notice to the Applicants, the Beneficiaries and the Trustee,
provided however that until such release, the Beneficiaries shall be entitled to
exercise all voting and other similar rights in respect of such Newco Acquisition
Shares;
c) pay all amounts required to remedy any monetary defaults, or in connection with
any consent, transfer or other similar fee (whether or not such fee specifically
contemplated in the applicable contract or governmental authorization) in respect
of all Material Contracts (as that term is defined in the APA) of the Applicants;
and
d) enter into an agreement (the "Transition Services Agreement") pursuant to which
the Applicants may provide or receive certain transition services to and from the
Purchaser following the completion of the transactions contemplated by the APA,
in either case on a cost-recovery basis only and to make such cost-recovery
payments (if any) if and to the extent required to be made by the terms and
conditions of the Transition Services Agreement.
20.
THIS COURT ORDERS AND DECLARES that in the event that the transactions
contemplated under the APA do not close on or before October 1, 2014, the Agency
#11137346
- 12 -
Agreement shall continue to apply in respect of the APA Closing Stores and the Agent shall
continue to sell the Merchandise and the FF&E located in the APA Closing Stores in
accordance with the terms of the Agency Agreement.
VESTING ORDER
21. THIS COURT ORDERS AND DECLARES that upon the delivery of a certificate by
the Trustee to the Purchaser substantially in the form attached as Schedule A hereto (the
"Trustee's Certificate"), all of the Applicants' right, title and interest in and to the Purchased
Assets shall vest absolutely in the Purchaser, free and clear of and from any and all security
interests (whether contractual, statutory, or otherwise), hypothecs, mortgages, trusts or
deemed trusts (whether contractual, statutory, or otherwise), judgments, liens, executions,
levies, charges, or other financial or monetary claims, rights of first refusal or other preemptive rights, restrictions on transfer of title, priorities, assignments, whether or not they
have attached or been perfected, registered or filed and whether secured, unsecured or
otherwise (collectively, the "Claims") including, without limiting the generality of the
foregoing, the NOI Charges, the Agent's Charge and all other charges, security interests or
claims evidenced by registrations pursuant to any applicable provincial Personal Property
Security Act (or other similar legislation) or any other personal property registry system, in
favour of any person (all of which are collectively referred to as "Encumbrances", which shall
not include the permitted encumbrances, easements and restrictive covenants listed on
Schedule B hereto, which are referred to as the "Permitted Encumbrances") and, for greater
certainty, this Court orders that all of the Encumbrances affecting or relating to the
Purchased Assets are hereby expunged and discharged as against the Purchased Assets.
#11137346
- 13 -
22.
THIS COURT ORDERS that for the purposes of determining the nature and priority
of the Claims and Encumbrances, the net proceeds from the sale of the Purchased Assets, less
any amount directed to be paid to the Agent at closing pursuant to the APA, and for greater
certainty excluding the Newco Acquisition Shares following release of such shares by the
Trustee in accordance with paragraph 19b) hereof, shall stand in the place and stead of the
Purchased Assets, and that from and after the delivery of the Trustee's Certificate, all Claims
and Encumbrances shall attach to such proceeds from the sale of the Purchased Assets with
the same priority as they had with respect to the Purchased Assets immediately prior to the
sale, as if the Purchased Assets had not been sold and remained in the possession or control
of the person having that possession or control immediately prior to the sale.
23.
THIS COURT ORDERS AND DIRECTS the Trustee to file with the Court a copy of
the Trustee's Certificate forthwith after delivery thereof.
24.
THIS COURT ORDERS that pursuant to clause 7(3)(c) of the Canada Personal
Information Protection and Electronic Documents Act, the Applicants are authorized and
permitted to disclose and transfer to the Purchaser all human resources and payroll
information in the Applicants' records pertaining to the Applicants' past and current
employees. The Purchaser shall maintain and protect the privacy of such information and
shall be entitled to use the personal information provided to it in a manner which is in all
material respects identical to the prior use of such information by the Applicants.
25.
THIS COURT ORDERS that, notwithstanding:
a) the pendency of these proceedings;
#11137346
- 14 -
b) any application for a bankruptcy order now or hereafter issued pursuant to the
BIA in respect of any of the Applicants and any bankruptcy order issued
pursuant to any such applications; and
c) any assignment in bankruptcy made in respect of any of the Applicants;
the vesting of the Purchased Assets in the Purchaser pursuant to this Order shall be binding
on any trustee in bankruptcy that may be appointed in respect of any of the Applicants and
shall not be void or voidable by creditors of the Applicants, nor shall it constitute nor be
deemed to be a fraudulent preference, assignment, fraudulent conveyance, transfer at
undervalue, or other reviewable transaction under the BIA or any other applicable federal or
provincial legislation, nor shall it constitute oppressive or unfairly prejudicial conduct
pursuant to any applicable federal or provincial legislation.
GENERAL
26.
THIS COURT ORDERS that until further order from this Court, the unredacted
copies of the Agency Agreement and of the APA, as well as the Applicants' revised cashflow forecast shall remain confidential, sealed and subject to a protective order of this Court
and shall not form part of the permanent Court record.
27.
THIS COURT HEREBY REQUESTS the aid and recognition of any court, tribunal,
regulatory or administrative body having jurisdiction in Canada or in the United States, to
give effect to this Order and to assist the Applicants, the Trustee and their respective agents
in carrying out the terms of this Order. All courts, tribunals, regulatory and administrative
bodies are hereby respectfully requested to make such orders and to provide such assistance
#11137346
- 15 -
to the Applicants and the Trustee, as an officer of this Court, as may be necessary or
desirable to give effect to this Order or to assist them in carrying the terms of this Order.
ENTERED AT tNSCRIT A TORONTO
ON SOOK NO:
LE I DANS LE REGISTRE N
SEP 1 it 1014
#11137346
- 16 -
SCHEDULE A
Form of Trustee's Certificate
Court File No. 32-1896275
ONTARIO
SUPERIOR COURT OF JUSTICE
COMMERCIAL LIST
IN THE CONSOLIDATED MATTERS OF THE NOTICE OF INTENTION TO MAKE A
PROPOSAL UNDER THE BANKRUPTCY AND INSOUVENCY ACT,
R.S.C. 1985, c. B-3, AS
AMENDED OF
XS CARGO LIMITED PARTNERSHIP
XS CARGO GP INC.
TRUSTEE'S CERTIFICATE
RECITALS
A.
On July 30, 2014, XS Cargo Limited Partnership ("XS LP") and its general partner, XS
Cargo GP Inc. ("XS GP") together with XS LP, "XS Cargo"), each filed a Notice of
Intention to Make a Proposal (collectively, the "NOIs") under section 50.4(1) of the
BIA. PricewaterhouseCoopers was appointed as trustee to Notices of Intention to
Make a Proposal filed by each of XS LP and XS GP ("PwC" or the "Trustee").
B.
Pursuant to an order of the Ontario Superior Court of Justice (the "Court") dated
September 19, 2014 (the "September 19, 2014 Order"), the Court approved the terms
of an Asset Purchase Agreement (the "APA") made as of September 15, 2014 between
Cargo and 9014454 Canada Inc. (the "Purchaser") and the vesting in the Purchaser of
XS Cargo's right, title and interest in and to the assets purchased under the APA (the
#11137346
- 17-
"Purchased Assets"), which vesting is to be effective with respect to the Purchased
Assets upon the delivery by the Trustee to the Purchaser of a certificate confirming (i)
the payment by the Purchaser of the Purchase Price for the Purchased Assets; (ii) that
the conditions to Closing as set out in the APA have been satisfied or waived by XS
Cargo and/or the Purchaser (as applicable); and (iii) the transaction contemplated by
the APA (the "Sale Transaction") has been completed to the satisfaction of the
Trustee.
C.
Unless otherwise indicated herein, terms with initial capitals have the meaning set
out in the APA.
THE TRUSTEE CERTIFIES the following:
1. The conditions to Closing as set out in the APA have been satisfied or waived by XS
Cargo (with the consent of the Trustee) and/or the Purchaser, as applicable; and
2. The Sale Transaction has been completed to the satisfaction of the Trustee.
3. This Certificate was delivered by the Trustee at
'TIME] on
[DATE].
PRICEWATERHOUSECOOPERS INC.,
in its capacity as proposal trustee to XS
Cargo limited Partnership and XS Cargo
GP Inc., and not in its personal capacity.
Per:
Name:
Title:
#11137346
- 18 -
SCHEDULE B
Permitted Encumbrances
#11137346
? z - LJG
Court File Number
?z
Superior Court of Justice
Commercial List
7-4.--
L
t4i-5 •52 7Er`
FILE/DIRECTION/ORDER
O
Plaintiff(s)
AND
Defendant(s)
Case Management ❑ Yes ❑ No by Judge:
Telephone No:
• Counsel
Facsimile No:
0 Direction for Registrar (No formal order need be taken out)
❑ Order
Above action transferred to the Commercial List at Toronto (No formal order need be taken out)
❑ Adjourned to:
❑ Time Table approved (as follows):
it-4- cu-e--rt.P-u,A-
--
°K.-
CAPA)
6'
IL
4...in
2, ---
tl,
*
arA...4.-
..4.4.4_
LAZ.V.:4‘..
cl.c..4_ 4
rt.*.
t
Q.,T,_
ia.
0....,.....„
ca...._ r- cA-1 Ilk.A.J.J........
4
Qii.A.A.--
ik"-t'
ot-A ■s..
#41-%*L 26-14
S , ,r6
...+ c-
,
G. k-L-4
e 3c... N., ro,.....4.,
1,,,....iit,
----
426"
`•∎•
4:,
Judge's Signature
❑ Additional Pages
4-:/3a1)
‘421..0."-t.
Q-C--4:
e,..___
_g
446..1/4.a.-0
[LAX-, Ce04..-4,*—tmeb-L.,
c.24-0--•
:
■/'%°4°4
Court File Number.
Superior Court of Justice
Commercial List
FILE/DIRECTION/ORDER
Judges Endorsment Continued
ccr•k,-A-- c,..Q.A...._.„.Lx_ct
.....,..,.
rvi-4,-C.-4
v,..,..0-0-1-6--t;,
%
t.s61".•:. t-t.,
<A-
i..J._
,...4
.011.......
cr,-,-v--4-0-Act
.... kb:4c
-tAszo-,
0‘.....,..4
2-5'
3-7.4ya.
1t14Z-11
Csxs.rAL
#-&-*j
t'AAr(21,
4...1:1w.:-.(2
tt.-7
c
L%-.P.,.
ite—
---
Ce, -.
ts-,...-4
ce....._ .....),_....--eA,...
4
R‘-m--
t-es
117Z-4!ZA.)...
lo CL)
ak._
Ksb-k.2-ik.. es)...-c-._L-sii•
tits
4-*-- LI-.
.
le
L
Page
t,.,-..
c2,..A._.
?_
c.—szipi..c.-.0e4_ 4b..4....4.-- 0........
of
Judges Initials
%,..
Court File Number:
Superior Court of Justice
Commercial List
FILUDIRECTIONI0FiDER
Judges Endorsment Continued
LAz
';
tkm-c■xu,1/4,:_.
I4_,,
s.h.sLb-LA
Rz.
ks.,.. LA,
c----1, - c(0-4,-st
4,.„,..S2_th-iL7
C
IL:i c.(crv-- 3
.
fr., ‹..6
O-'
Sli,-;...„. iLia. Ift_et 9.)).„,=
urrA-c-• ""-4.--t
G /(7:4,(.,
;sz .---4 C1/4.-
L.N..
0—
SZ-,
k
r+cr..N.. o.L--,
.
t.J.....0.„_21.
q..J,,,4___
C .AF,c. 1"01,4,4 as_ c,....
C) c. ,,, t, r/.. +1/4.
cA.9-z-rg-ti
Page
7
of
L
*
-?-4--(-
iLic., - •
”
--
1,,,M:
-lix.,....."._
f
iasa
cir
Judges Initials
..- .
—ti.L....
cb
.
IN THE CONSOLIDATED MATTERS OF THE NOTICE OF INTENTION TO MAKE A PROPOSAL UNDER
THE BANKRUPTCY AND INSOLVENCY ACT, R.S.C. 1985, c. B-3 OF XS CARGO LIMITED PARTNERSHIP
AND OF XS CARGO GP INC.
Court File No. 32-1896275
MOTION OF XS CARGO LIMI i ED PARTNERSHIP AND OF XS CARGO GP INC. UNDER THE BANKRUPTCY
AND INSOLVENCY ACT, R.S.C. 1985, c. B-3
ONTARIO
SUPERIOR COURT OF JUSTICE
COMMERCIAL LIST
Proceedings commenced at Toronto
AFFIDAVIT OF DUNCAN REITH
(SWORN ON OCTOBER 3, 2014)
STIKEmAN ELLIOTT' LLP
40th Floor
1155 Rene Levesque Blvd. West
Montreal, Canada H3B 3V2
Guy P. Martel
Tel: (514) 397-3163
Fax: (514) 397-3222
5300 Commerce Court
199 Bay St.
Toronto, Canada M51, 1B9
Maria Konyukhova LSUC#: 52880V
Tel: (416) 869-6820
Fax: (416) 947-0866
Counsels for the Applicants
#11145682
TAB 3
Court File Number: 32-1896275
ONTARIO
SUPERIOR COURT OF JUSTICE
COMMERCIAL LIST
THE HONOURABLE
)
TUESDAY, THE 7th
)
JUSTICE
DAY OF OCTOBER, 2014
)
IN THE CONSOLIDATED MAI 1 ERS OF THE NOTICE OF INTENTION TO MAKE A
PROPOSAL UNDER THE BANKRUPTCY AND INSOLVENCY ACT,
R.S.C. 1985, c. B-3, AS
AMENDED OF
XS CARGO LIMITED PARTNERSHIP
&
XS CARGO GP INC.
ORDER
THIS MOTION, made by XS Cargo Limited Partnership ("XS LP") and XS Cargo GP
Inc. ("XS GP", collectively with XS LP, "XS Cargo" or the "Applicants"), pursuant to, inter
alia, section 50.4(9) and 183 of the Bankruptcy and Insolvency Act, R.S.C. 1985, c. B-3, as
amended (the "BIA") was heard this day at 330 University Avenue, Toronto, Ontario.
ON READING the Notice of Motion of the Applicants, the affidavit of Duncan Reith
sworn October 3, 2014 and the Fourth Report of PricewaterhouseCoopers Inc., in its capacity
as proposal trustee of each of the Applicants (the "Trustee") and on hearing from counsel for
411145684
-2-
the Applicants and the Trustee and such other counsel as were present, no one else
appearing although duly served as appear from the affidavit of service, filed.
1.
THIS COURT ORDERS that the time for service of the Notice of Motion and the
Motion Record is hereby abridged and validated so that this Motion is properly returnable
today and hereby dispenses with further service thereof.
2.
THIS COURT ORDERS that the time for the filing of a proposal by each of the
Applicants is hereby extended in accordance with section 50.4(9) of the BIA until October 31,
2014.
#11145684
IN THE CONSOLIDATED MATTERS OF THE NOTICE OF INTENTION TO MAKE A PROPOSAL UNDER THE
BANKRUPTCY AND INSOLVENCY ACT, R.S.C. 1985, c. B-3 OF XS CARGO LIMITED PARTNERSHIP AND XS
CARGO GP INC.
Court File No: 32-1896Z
MOTION OF XS CARGO LIMITED PARTNERSHIP AND XS CARGO GP INC. UNDER SECTION 50.4(9) OF THE
BANKRUPTCY AND INSOLVENCY ACT, R.S.C. 1985, c. B-3
ONTARIO
SUPERIOR COURT OF JUSTICE
COMMERCIAL LIST
Proceeding commenced at Toronto
ORDER
STIKEMAN ELLIOTT LLP
40th Floor
1155 Rene Levesque Blvd. West
Montreal, Canada H3B 3V2
Guy P. Martel
Tel: (514) 397-3163
Fax: (514) 397-3222
5300 Commerce Court
199 Bay St.
Toronto, Canada M5L 1B9
Maria Konyukhova LSUC#: 52880V
Tel: (416) 869-6820
Fax: (416) 947-0866
Counsels for the Applicants
#11145684
Court File No. 32-1896275
IN THE CONSOLIDATED MATTERS OF THE NOTICE OF INTENTION TO MAKE A
PROPOSAL UNDER THE BANKRUPTCY AND INSOLVENCY ACT,
R.S.C. 1985, c. B-3 OF XS
CARGO LIMITED PARTNERSHIP AND OF XS CARGO GP INC.
MOTION OF XS CARGO Limn ED PARTNERSHIP AND OF XS CARGO GP INC. UNDER
SECTION 50.4 OF THE BANKRUPTCY AND INSOLVENCY ACT,
R.S.C. 1985, c. B-3
ONTARIO
SUPERIOR COURT OF JUSTICE
COMMERCIAL LIST
Proceedings commenced at Toronto
MOTION RECORD
(Motion for an Order Extending the Stay of
Proceedings)
(Returnable on October 7, 2014)
STIKEMAN ELLIOTT LLP
40th Floor
1155 Rene-Levesque Blvd. West
Montreal, QC H3B 3V2
Guy P. Martel
Tel.: (514) 397-3163
Fax: (514) 397-3222
5300 Commerce Court
199 Bay Street
Toronto, ON M5L 1B9
Maria Konyukhova LSUC#: 52880V
Tel: (416) 869-5230
Fax: (416) 869-0445
Counsels to the Applicants
#11145671