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Creditloans Canada Financing Inc. and Creditloans Canada Capital Inc.

THIS PAGE IS ONLY WITH RESPECT TO THE CCAA PROCEEDINGS OF THE COMPANY ABOVE. IF YOU ARE A CUSTOMER OF CREDITLOANS OR HAVE A LOAN WITH THEM, PLEASE REACH OUT TO THE COMPANY DIRECTLY AT 1 855-723-5626

On September 30, 2020, an Order (the “CCAA Initial Order”) was granted by the Honourable Madam Justice Shelly Fitzpatrick of the Supreme Court of British Columbia (the “Court”) pursuant to the Companies' Creditors Arrangement Act (the “CCAA”) granting Creditloans Canada Financing Inc. (“Financing Inc.”) and Creditloans Canada Capital Inc. (“Capital Inc”) (together with Financing Inc., “Creditloans” or the “Companies”) various relief including, but not limited to, the imposition of an initial Stay of Proceedings against the Company and its assets through to October 9, 2020. The Court appointed BDO Canada Limited as the monitor of the Company (the “Monitor”).

On October 2, 2020, the Court granted an Amended and Restated CCAA Initial Order (the “ARIO”) confirming the Initial Order and granting the Companies further relief including, but not limited to, the approval of Interim Financing.

Pursuant to the CCAA Initial Order, the Companies are to continue to carry on operations in a manner consistent with the commercially reasonable preservation of its business while it considers and pursues restructuring alternatives. On October 9, 2020, the Court granted an Extended ARIO extending the Stay of Proceedings to December 4, 2020.

The CCAA Initial Order provides that claims against Creditloans in relation to obligations arising prior to September 30, 2020, including for goods and services supplied to the Company prior to that date, are suspended, and creditors are prohibited from continuing or taking any actions or exercising any rights against Creditloans except with leave of the Court.

On November 6, 2020, by way of further application, the Companies sought and the Court granted an Order approving a proposed claims process to identify and quantify creditor claims (the “Claims Process Order”).

On November 16, 2020, by way of further application, the Companies sought and the Court granted an order (the “Meeting Order”) that, among other things: the Plan of Compromise, Arrangement and Reorganization dated November 16, 2020 (the “Plan”), be accepted for filing and that the Companies be authorized to present the Plan at a meeting of creditors; and that the Stay be extended to December 14, 2020.

On December 2, 2020, an application was made on behalf of one bondholder to adjourn the meeting of creditors scheduled for December 3^rd, 2020. The Court dismissed that application and ordered that the meeting proceed in accordance with the Meeting Order.

Please refer to the Monitor's Fifth Report linked below with respect to the Monitor's recommendations for the meeting.

RESULTS OF THE MEETING OF CREDITORS ON DECEMBER 3, 2020 AND SANCTION ORDER APPLICATION ON DECEMBER 11, 2020. At the December 3^rd, 2020 meeting of creditors, both the Bondholder Class and the Unsecured Creditor Class unanimously approved the Plan as filed by the Companies. The Companies brought an application for an Order (“Sanction Order”) to approve and sanction the Plan on December 11, 2020, (the “Sanction Order Application”), and the Court granted the Sanction Order and extended the Stay to April 21, 2021.

At the meeting, prior to voting, the Companies tabled a further amended Plan dated December 3, 2020 (the “Further Amended Plan”). The Further Amended Plan is available below. Also provided is a blackline version of the Further Amended Plan, comparing it with the Plan dated November 18, 2020, so that changes can be seen. Creditors should note that the changes are of a technical nature with respect to the return to the Bondholder Class, and do not change the expected returns to the Unsecured Creditor Class.

The Companies have provided a summary of key changes made in the Further Amended Plan as per below:

Changes to reflect that Bondholders who do not elect to receive the 35% cash option will receive Amended Bonds, rather than a Bondholder Note. The Companies advise that the change was made in order to address Bondholder concerns with respect to retaining the registered status of Bonds being held in registered accounts (i.e. RRIF, RRSP, TFSA).
The Amended Bonds are Bondholders' existing Bonds but some of the terms of those bonds will be changed:
- The payment terms of all Bonds will be changed to match the five year payment schedule contemplated in all versions of the Plan, i.e.:
  - Maturity Date will be 5 years from the Effective Date under the Plan, which is expected to in early January 2021 (so the Amended Bonds will mature in early January 2026);
  - quarterly payments such that each year after the Distribution Date (which is 90 days after Effective Date) the cumulative percentage of the face value paid shall equal: (a) Year 1: 8.85%; (b) Year 2: 21.40%; (b) Year 3: 39.28%; (c) Year 4: 64.38%; and (d) Year 5: 100%
- The language in the 2014 Bondholder Agreement with respect to a minimum asset coverage ratio will be removed in order to make that agreement consistent with the 2017 Bondholder Agreement. This is to ensure that all Bondholders are treated equally under the Plan, no matter which series of bonds they own. Both the 2014 Bondholder Agreement and the 2017 Bondholder Agreement will continue to exist.
- The reporting requirements under both the 2014 Bondholder Agreement and the 2017 Bondholder Agreement will be changed so that:
  - Capital Inc. will have 120 days after the end of each financial year to provide financial statements, instead of 90 days. This change brings the reporting timeframe in line with statutory reporting requirements.
  - Capital Inc. will no longer be required Financing Inc. to provide reports on the performance of Financing Inc.'s loan portfolio. This change reflects the fact that Financing Inc. will be closely held (single shareholder) private company once the Plan is implemented. The companies confirm that Capital has to make the payments under the Amended Bonds regardless of how the loan portfolio performs.

Plan Implementation and Finalization

On March 8, 2021, the Monitor filed the Monitor's Certificate (linked under Court Filings below) with the Court certifying that: (a) the Purchaser had paid the Cash Payment (as defined in the Acquisition Agreement) to the Monitor; and (b) all conditions precedent to the Acquisition Agreement had been satisfied or waived.

On March 12, 2021, the Monitor filed the Monitor's Implementation Certificate (linked under Court Filings below) confirming that: (a) the Plan Transactions and Acquisition Transactions (as defined in the Further Amended Plan) had been completed; and (b) the Further Amended Plan had been fully implemented in accordance therewith and the Sanction Order.

The Monitor brought an application (the “Fee Approval & Discharge Application”) on April 21, 2021 at 9:30 AM (Pacific) ( for an order (the “Fee Approval & Discharge Order”) that, among other things: (a) the fees of the Monitor and legal counsel to the Monitor (i.e. Fasken) be approved; and (b) the Monitor be discharged upon the filing of a case completion certificate. That Order was granted, and the Monitor was to file the above-mentioned case completion certificate in due course upon completion of the administration of these proceedings.

On May 12, 2021 the Case Completion Certificate was filed, and these CCAA proceedings were completed.

Court Filings

Affidavits

Court Orders

Creditor Notices

Monitor's Reports

Claims Process

Please note that the Claims Process is completed.

In accordance with the Claims Process Order (linked above under Court Orders), documents are posted below in relation to the Claims Process. Bondholders should refer to the Bondholders Instructions Letter, whereas all other creditors should refer to the Claims Process Instruction Letter. Creditors should note that any Proofs of Claim must be received by the Monitor no later than 5:00 PM (Pacific) on November 26, 2020 (“Claims Bar Date”).

Bondholders should note that they only need to file a proof of claim if they disagree with the information in the Notice of Bondholder Claim that they receive from the Monitor. Any Bondholders that do not receive an e-mail containing the Notice of Bondholder Claim from the Monitor by end of day on November 10, 2020 should contact the Monitor at the contact information at the bottom of this page.

Meeting Process

Please note that the Meeting Process is completed.

In accordance with the Meeting Order, be advised that a Meeting of Affected Creditors will be held on December 3, 2020 at 10:00 am Pacific via Microsoft Teams (the “Meeting”). Please review the documents posted below carefully and take note of the deadlines as outlined within those documents.

The Plan and Notice of Meeting posted below have been slightly updated from previous versions to clarify that for the Plan to be approved at the Meeting, at least a majority in number of the Affected Creditors validly voting in each Class whose Proven Claims represent at least two-thirds in value of the Affected Claims, who actually vote at the Meeting, in person (virtually) or by proxy, must vote in favour of the Resolution. The Plan must also be sanctioned by a final Order of the Court under the CCAA.

The Plan – November 18, 2020
Notice of Meeting– updated November 18, 2020
Proxy
Bondholder Election (Bondholders should seek independent legal and tax advice regarding the Bondholder Election)
Electronic Meeting Protocol
With Respect to Bondholders wishing to elect to take the 35% cash out option contemplated in the Plan, they had until December 8, 2020 at 5pm (pacific) to submit that election to the Monitor at imargulis@bdo.ca. If you previously submitted a Bondholder Election, and would prefer the 5 year amended bond contemplated within the Plan, you may likewise withdraw your previously submitted Bondholder Election by emailing the Monitor at imargulis@bdo.ca by no later than December 8, 2020 at 5pm (pacific). That deadline has now passed.

Service List

Contact Us

# 1100-1055 W Georgia St
Vancouver, British Columbia V6E 3P3
Ilya Margulis – imargulis@bdo.ca
Phone: 604-646-4395
Fax: 1-888-387-0427
(Note: Electronic communication is preferred in light of delays caused by the current Pandemic)