Green Growth Brands Inc (OTCMKTS:GGBXF) and its subsidiaries have been granted an extension of stay order in the ongoing insolvency proceedings. The company announced this in an update on the insolvency proceedings. The company filed for insolvency protection and was granted protection by the Ontario Superior Court of Justice under the Companies’ Creditors Arrangement Act.
Green Growth financing agreement with All Js Greenspace LLC
The stay order was issued to allow the company complete a sale and investment process and increase the amount of the court-ordered charge over its property. The property in question are connected to its debtor-in-possession financing agreement that was signed with All Js Greenspace LLC. Green Growth Brands is also seeking to approve a stalking-horse agreement with All Js and Capital Transfer Agency.
Green Growth Brands acts as a debenture holder trustee of the $45.5 million aggregate principal amount of 15.00% secured convertible debentures, which is expected to mature on May 17, 2020. The company is also a trustee of $23.7 million aggregate principal amount of 5.00% secured convertible debentures, which is expected to mature in 2024. Green Growth will release more updates on the CCAA proceedings as well as SISP process when there are more developments.
Green Growth Brands HAS Minimal Chances of Remaining in Business
The continuing operations of Green Growth Brands is depended on its ability to raise more money to drive its operations and maintain profitable margins and also repay its debts that arise from normal business operations. After landing into a severe liquidity crisis, the company filed for insolvency protection largely attributed to material matured and maturing debt. The liability crisis was further worsened by the negative impact of the COVID-19 pandemic. Due to the pandemic, Green Growth Brands was forced to suspend its cannabidiol business indefinitely, which resulted in the company being placed under receivership and to restrict its business operations. The company’s business was also affected by an order issued by Nevada Governor Stephen Sisolak, limiting dispensary operations in the state. After considering all available options, Green Growth Brands’ board of directors concluded that it was in the company’s best interest to seek protection under the CCAA.
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