GrowthWorks Canadian Fund Ltd. Provides Further Update on CCAA Proceedings and Proposed Winding-Up and Dissolution of the Fund

TORONTO, Dec. 11, 2024 /CNW/ - GrowthWorks Canadian Fund Ltd. (the "Fund") today provided a further update on its proceedings under the Companies' Creditors Arrangement Act (the "CCAA") and the proposed winding-up and dissolution of the Fund (the "Dissolution"), including certain proposed amendments to the Distribution, Termination and Discharge Order (the "Distribution Order") previously obtained by the Fund from the Ontario Superior Court of Justice (the "Court") under the CCAA.

At a hearing scheduled for December 18, 2024, the Fund will request the Court to amend the Distribution Order to, among other things, extend the Stay Period (as defined below).

The Fund is continuing with its efforts to liquidate the remainder of its investment portfolio. The Fund currently expects to cease those efforts and make a final cash distribution to eligible Class A shareholders of the Fund and the holder of the Fund's Class B shares, respectively, in connection with the Dissolution by March 31, 2025.

Background; Dissolution Date

In October 2013, the Fund sought protection from its creditors pursuant to proceedings (the "CCAA Proceedings") commenced under the CCAA and obtained an order of the Court granting a stay of proceedings against the Fund for a specified period of time (which is known as the "Stay Period"). The current Stay Period will expire on December 31, 2024, unless further extended by the Court. FTI Consulting Canada Inc. (the "Monitor") has been appointed by the Court as monitor for the CCAA Proceedings.

Since the commencement of the CCAA Proceedings, the Fund, in consultation with the Monitor and with the assistance of the Fund's investment advisor, Crimson Capital Inc. ("Crimson Capital"), has been primarily engaged in the orderly disposition of the Fund's remaining venture assets and the settlement of the Fund's liabilities and obligations, including significant amounts owing to Roseway Capital S.a.r.l., legal proceedings commenced by the former manager of the Fund and other litigation involving the Fund.

Distribution Order

On January 19, 2023, the Fund obtained the Distribution Order from the Court. Among other things, the Distribution Order:

• extends the Stay Period to December 31, 2024.
• authorizes the Fund to continue to take such steps as it, in consultation with its investment advisor and the Monitor, determines is appropriate to effect an orderly liquidation of its investment portfolio.
• authorizes the Fund to cease those efforts and donate any security that it continues to hold to one or more charities or otherwise deal with it in the manner determined by the Fund, in consultation with the Monitor, if the Fund determines that it would be appropriate to do so, after considering the proceeds likely to be realized, the estimated cost of such efforts and such other factors as the Fund determines relevant in the circumstances.
• authorizes the Fund to make one or more distributions to the holders (the "Class A Shareholders") of its Class A shares (the "Class A Shares") and the holder of its Class B shares in certain circumstances.
• provides that, upon the Fund concluding the liquidation of its investment portfolio, paying all creditor claims, making distributions to shareholders and otherwise completing all matters to be attended to in connection with the CCAA Proceedings to the satisfaction of the Monitor, the Monitor will file with the Court the Monitor's CCAA Completion Certificate, which will designate the "CCAA Termination Time"; and that, as of the CCAA Termination Time:
  • the CCAA Proceedings will be terminated;
  • the Fund will be dissolved without any further act or formality;
  • the Monitor will be discharged and released from its duties, obligations and responsibilities; and
  • the current and former directors, officers and other Representatives (as defined in the Distribution Order) of the Fund, the Monitor and the Monitor's Representatives (as defined in the Distribution Order), will be released from all claims arising in connection with Fund or the CCAA Proceedings (except claims that cannot be compromised pursuant to the provisions of the CCAA).

A copy of the Distribution Order is available on the website of the Monitor at: http://cfcanada.fticonsulting.com/GCFL/.

Proposed Amendments to the Distribution Order

The Fund has filed a motion with the Court for certain amendments to the Distribution Order. The Court will consider the Fund's application at a hearing to be held virtually at 12:00 p.m. (Eastern Time) on December 18, 2024. Persons wishing to attend the Court hearing should contact the Monitor by telephone at 416-649-8087 / 1-855-431-3185 or by e-mail at [email protected]. 

If granted, the amendments to the Distribution Order would provide the following relief, among other things:

• the Stay Period would be extended until the CCAA Termination Time, during which time the Fund would be authorized to continue to take such steps as it, in consultation with its investment advisor and the Monitor as appropriate, determines is appropriate to effect an orderly liquidation of its investment portfolio after December 31, 2024.
• the term of the Second Amended and Restated Investment Advisor Agreement between the Fund and Crimson Capital would be extended until the CCAA Termination Time.

The Fund would continue its efforts to liquidate its investment portfolio until such time as the Fund, in consultation with the Monitor, determines that it would be appropriate to cease those efforts, after considering the proceeds likely to be realized, the estimated cost of such efforts and such other factors as the Fund determines relevant in the circumstances. Upon making that determination, the Fund would be authorized to donate any security that it continues to hold to one or more charities or otherwise deal with it in the manner determined by the Fund. At this time, it is the Fund's intention to cease its portfolio liquidation efforts and make a final cash distribution to eligible shareholders of the Fund in connection with the Dissolution by March 31, 2025. Since the Fund's remaining non-cash assets consist of equity and debt venture investments in private enterprises or restricted securities, this means that the Fund would surrender any such remaining investments for no consideration notwithstanding the potential long-term value of the investments, which may be material, and proceed with the Distribution in connection with the Dissolution, as described below.

Copies of the court material filed by the Fund and the Monitor, together with details relating to the CCAA Proceeding and general information relating to the status of the remaining investments, are available on the Monitor's website at http://cfcanada.fticonsulting.com/gcfl/.

Dissolution Date; Distribution to Class A Shareholders

The Distribution Order authorizes the Fund to make distributions to eligible Class A Shareholders out of the available cash and cash equivalents of the Fund, net of any amount due and owing to the Fund's creditors, the estimated costs to make the distribution and certain other amounts. As noted above, the Fund currently expects to make a final cash distribution (the "Distribution") to eligible Class A Shareholders and the holder of the Fund's Class B shares, respectively, in connection with the Dissolution. Eligible Class A Shareholders would be expected to share rateably in the distribution proceeds according to the net asset value of the applicable series of Class A Share, share for share, in the distribution proceeds, less any applicable withholding taxes and subject to the terms of the Distribution Order.

The amount and timing of any such Distribution has not yet been determined; however, the Fund presently expects this to occur by March 31, 2025. Delivery of cheques representing any such Distribution may be adversely affected by the current postal strike in Canada if it is not resolved prior to any Distribution. The Fund intends to provide a further update as to the details of the Dissolution and any Distribution in the coming weeks, including the approximate amount of cash that will be available for the Distribution.

Updates to Shareholder Registration Details Prior to the Dissolution

Since the commencement of the CCAA Proceedings, it is possible that changes in the registration details of a Class A Shareholder may have occurred without those changes being reflected on the Fund's register of Class A Shareholders, including as a result of Class A Shares having devolved as a consequence of the death of a Class A Shareholder. 

In order to ensure that any notice or distribution by the Fund to Class A Shareholders in connection with the Dissolution is properly given or made, Class A Shareholders are reminded to submit any changes in registration details since October 1, 2013 to the Fund's transfer agent, The Investment Administration Solution Inc. ("IAS"), by utilizing the following website administered by IAS on behalf the Fund:

https://www.autonomousinvest.com/gwcf

Additional Questions

Additional questions regarding the proposed Dissolution may be directed to the Fund via the website set out above and to the Monitor via the following:

Phone: [phone]
Email: [email protected] 

Forward-Looking Information

This press release contains forward looking statements, including statements with respect to the Fund's proceedings under the CCAA. These forward-looking statements reflect the Fund's current views and are based on certain assumptions, including, but not limited to, assumptions as to future operating conditions and courses of action, general economic and market conditions and other factors the Fund believes are appropriate. Such forward looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those contained in these statements, including, but not limited to, the risk that dispositions of the Fund's remaining portfolio investments, together with the Fund's cash resources, will not yield proceeds sufficient to satisfy in full claims of the Fund's creditors or any distribution to the Fund's shareholders; the risk that claims by third parties against the Fund may adversely affect the Fund's ability to wind up its affairs and make distributions to its stakeholders and may involve substantial expense and, in either case, could require the Fund to pay substantial amounts if those claims are successful, thereby reducing or depleting entirely the Fund's liquidity and amounts available for distribution to its creditors or shareholders or both; and those risks and uncertainties disclosed in the Fund's regulatory filings posted on SEDAR+ at www.sedarplus.ca. These risks and uncertainties may cause actual results, events or developments to be materially different from those expressed or implied by such forward-looking statements. Unless required by law, the Fund does not assume any obligation to update any forward-looking statements, whether as a result of new information, future events or results or other factors.

SOURCE GrowthWorks Canadian Fund Ltd.