Nova Scotia court approves creditor protection for SaltWire Network, appoints monitor
HALIFAX –
A Nova Scotia decide accredited an utility Wednesday to guard Atlantic Canada’s largest newspaper firm from its collectors as SaltWire Network Inc. tries to emerge from insolvency with a restructuring plan.
Nova Scotia Supreme Court Judge John Keith additionally appointed a monitor to supervise the method underneath the Companies’ Creditors Arrangement Act, which permits corporations with greater than $5 million in debt to keep away from chapter whereas drafting a plan that ensures collectors obtain some cost for what they’re owed.
The emergency courtroom listening to in Halifax was beset by authorized wrangling as a result of SaltWire wished a special monitor than the one advised by the non-public fairness agency Fiera Private Debt, which has claimed in courtroom it’s owed $32.7 million, plus virtually $600,000 of accrued curiosity.
SaltWire publishes 4 every day newspapers: the Chronicle Herald in Halifax; the Cape Breton Post in Sydney, N.S.; the Guardian in Charlottetown and the Telegram in St. John’s, N.L. — in addition to 14 weekly publications in each Atlantic province besides New Brunswick.
On Monday, Fiera filed courtroom paperwork saying it lent cash to SaltWire to assist pay its 2017 acquisition of greater than two dozen newspapers in Atlantic Canada from Transcontinental Inc. SaltWire has mentioned debt from the acquisition and different monetary pressures positioned “an unsupportable strain” on the corporate.
In its filings, Fiera has mentioned SaltWire and its affiliated corporations have been in default for greater than 5 years, throughout which era they’ve made little progress in repaying their money owed — and so they haven’t any plan to take action. Fiera additionally mentioned it supplied “significant concessions” to the debtors by means of a number of forbearance agreements, which SaltWire has ignored.
On Wednesday, SaltWire Lawyer Maurice Chiasson advised the courtroom that Fiera’s suggestion for a monitor — Toronto-based KSV Restructuring Inc. — could be a foul alternative as a result of the corporate has acted as Fiera’s monetary adviser since October and has no presence in Atlantic Canada.
Chiasson requested the decide to nominate a monitor from Grant Thornton’s Halifax workplace, however Keith rejected that request, deciding KSV would lead the restructuring as a result of SaltWire had earlier entered right into a contractual settlement with Fiera relating to the method.
As nicely, the decide dismissed SaltWire’s declare that KSV had been troublesome to work with as Fiera’s monetary adviser, saying that pressure was pure and he was assured KSV may keep its impartiality and independence as a court-appointed monitor.
As the listening to drew to a detailed Wednesday, Keith accredited debtor-in-possession financing for SaltWire, which can permit the financially distressed firm to maintain paying its payments till March 22, when one other courtroom listening to will likely be held in Halifax to debate particulars of the restructuring plan.
KSV president Bobby Kofman confirmed that Fiera will present $500,000 in interim financing.
SaltWire’s Chronicle Herald has confirmed in a printed report that firm president Mark Lever will step down all through the creditor safety course of “as he seeks to pursue the option of securing the company’s assets.” During the Wednesday’s courtroom listening to, Fiera lawyer Jennifer Stam confirmed Lever could be stepping down “to make a bid,” however she didn’t provide particulars.
Outside the courtroom, Lever declined to supply any feedback.
This report by The Canadian Press was first printed March 13, 2024.
