CannTrust facing closure
CannTrust Holdings Inc. plans to change its name after exiting creditor protection, with its subsidiary receiving $17 million in financing from a group of investors led by a Netherlands-based private equity investment company.
The beleaguered Ontario-based cannabis company has yet to unveil its new moniker but plans to convene a meeting of its shareholders within the next four months.
Marshall Fields International B.V., a subsidiary of Kenzoll B.V., has invested $11.2 million to acquire a 90 per cent equity interest in CannTrust Equity and provided a $5.5 million secured credit facility.
CannTrust retains the remaining 10 per cent of the common shares of CannTrust Equity.
The company has therefore now emerged from court-supervised proceedings under the Companies’ Creditors Arrangement Act.
It intends to either apply to the Ontario Securities Commission for an order revoking the OSC's "failure-to-file" cease-trade order dated April 13, 2020 or take steps to obtain a stock exchange listing for the common shares of CannTrust Equity.
"This marks the end of one long journey and the beginning of a new, exciting era for CannTrust. Today we can take our first step forward, focusing our attention on the bright future that lies ahead, with our new partners, Kenzoll," stated CannTrust CEO Greg Guyatt in a news release.
Founded in 2013, CannTrust faced class-action lawsuits from investors who said they lost millions of dollars after the company allegedly made misrepresentations about having necessary licences for growing cannabis.
Securities charges against three former executives — former chief executive Peter Aceto, former vice-chairman Mark Litwin, and former chairman Eric Paul — are set to be reviewed in Ontario court Sept. 20.
Aceto, Paul and Litwin each face charges of fraud, making false or misleading statements and authorizing, permitting or acquiescing in the commission of an offence. Litwin and Paul are also facing insider trading charges and Litwin and Aceto are charged with making a false prospectus and false preliminary prospectus.
The quasi-criminal charges were announced in June by the Ontario Securities Commission, roughly three years after CannTrust was found to be growing thousands of kilograms of cannabis in unlicensed rooms.