Barristers & Solicitors BURCHELLS LLP Court Administration APR 2 5 2018 1801 Hollis Street, Suite 1800 Halifax, Nova Scotia Canada B3J 3N4 I. 902.423.6361 f. 902.420.9326 www.burchells.ca D. Bruce Clarke, Q.C. bclarke@burchells.ca Halifax, N.S. File: 11440-1073174 April 25, 2018 DELIVERED BY HAND The Honourable Justice Presiding in Chambers Supreme Court of Nova Scotia The Law Courts 1815 U pper Water Street Halifax. NS B3J 1S7 My Lady/My Lord: Re: Wicker Emporium Limited (the "Applicant"), Hfx No. 475298 Motion for Extension of Initial Order and for Critical Supplier Charge under the Companies' Creditors Arrangement Act ("CCAA") May 3, 2018, at 9:30 a.m. We act for the Applicant, which moves for a 45-day extension of the Initial Order granted April 18, 2018, an amendment to the Administration Charge, and for a Critical Supplier Charge over the certain property of the Applicant. The motion is scheduled to be heard before you at 9:30 a.m. on May 3, 2018. Please accept the following as the pre-hearing brief of the Applicant on the motion. Notice of the Applicant's motion is being provided to all of the secured creditors of the Company (as outlined in the PPSA printout attached to the Affidavit of Mr. Kapahi filed In support of the initial Application). Proof of service will be provided ahead of the May 3rd hearing. Grant of an Extension Extensions of a stay of proceedings under the CCAA are governed by s. 11.02 of that Act Specifically, s. 11.02(3) of that Act [TAB 1] requires an Applicant to satisfy the court that: a) Circumstances exist that make the extension appropriate; and b) The Applicant has acted, and is acting, in good faith and with due diligence. 2034225
Page 2 April 25, 2018 The Initial Order was granted on April 18, 2018. By the time this motion is heard, the Applicant will have had just two weeks of work on which to report. Notwithstanding this short time, the Applicant has worked diligently to move toward a restructuring of its business. We have filed the Affidavit of Raj Kapahi, sworn April 25, 2018, in support of the present motion. As noted in Mr. Kapahi's Affidavit, the company continues to do business in the ordinary course. Its stores continue to operate and it continues to pay its employees. As part of its plan to streamline operations, the Applicant already has disclaimed six leases on stores that have been unprofitable. It currently is reviewing its other leases and cash flows from various stores to determine whether it may wish to disclaim further leases and close additional stores. In the course of closing these stores, the Applicant also will be liquidating the inventory at the stores. This process should be complete by late June or early July, at which time the Applicant expects to be in a position to put forward a plan of arrangement acceptable to its creditors. We therefore submit circumstances exist that make an extension appropriate. We further submit the evidence makes clear the Applicant has acted, and continues to act in good faith and with due diligence. As noted in Mr. Kapahi's affidavit the cooperative with the Monitor and has promptly responded to all requests. Th om^ny continues to work with its suppliers to fulfill outstanding customer orders and inventory at locations it intends to keep open. We therefore submit the granting of a 45-day extension is appropriate in the circumstances. Administration Charge This court granted an interim Administration Charge in the Initial Order. The Applirant will be seeking a full Administration Charge, with a higher quantum and a defined priority. Critical Supplier Charge The granting of a charge over the assets of an Applicant in governed by s. 11.4(1) of the CCAA [TAB 2], which requires an Applicant to satisfy the court that: a) Notice has been given to secured creditors likely to be affected by the security or charge; b) The person in question is a supplier of goods or services to the Applicant, and c) The goods or services supplied by the person are criticai to the continued operation of the Applicant.
Page 3 April 25. 2018 The Applicant, working in conjunction with the Monitor, is negotiating with certain critical suppliers. A supplemental filing will be provided to update the court prior to the hearing. All of which is respectfully submitted. Yours respectfully, BURCH; lice Clarke, Q.C DBC/lst cc. Service List
Companies' Creditors Arrangement Act, R.S.C. 1985, c. C-36, s. 11.02 Canada Federal Statutes Companies' Creditors Arrangement Act Part II Jurisdiction of Courts (ss. 9-18.6) Most Recently Cited m:an'angement relatif a Bloom Lake, 2017 QCCS 5573, 2017 CarswellQue 11157, EYE 2017-287997, 287 A.C.W.S. (3d) 90 I (C.S. Que., Dec 6, 2017) R.S.C. 1985, c. c-36, s. 11.02 S 11.02 Currenc}' 11.02 11.02(l)Stays, etc. initial application A court may, on an initial application in respect of a debtor company, make an order on any terms that it may impose, effective for the period that the court considers necessary, which period may not be more than 30 days, (a) staying, until otherwise ordered by the court, all proceedings taken or that might be taken in respect of the company under the Bankruptcy and Insolvency Act or the Winding-up and Restructuring Act: (b) restraining, until otherwise ordered by the court, further proceedings in any action, suit or proceeding against the company; and (c) prohibiting, until otherwise ordered by the court, the commencement of any action, suit or proceeding against the company. 11.02(2)Stays, etc. other than initial application A court may, on an application in respect of a debtor company other than an initial application, make an order, on any terms that it may impose, (a) staying, until otherwise ordered by the court, for any period that the court considers necessary, all proceedings taken or that might be taken in respect of the company under an Act referred to in paragraph (l)(a); (b) restraining, until otherwise ordered by the court, further proceedings in any action, suit or proceeding against the company; and (c) prohibiting, until otherwise ordered by the court, the commencement of any action, suit or proceeding against the company. 11.02(3)Bur(len of proof on application The court shall not make the order unless (a) the applicant satisfies the court that circumstances exist that make the order appropriate; and (b) in the case of an order under subsection (2), the applicant also satisfies the court that the applicant has acted, and is acting, in good faith and with due diligence. 11.02(4)Restriction Orders doing anything referred to in subsection (1) or (2) may only be made under this section. iv;next. CANADA Copyright Thomsor\ Reuters Canada Limited or its licensors (excluding individual court documents). All rights roseived.
Companies' Creditors Arrangement Act, R.S.C. 1985, c. C-36, s. 11.02 Amendment History 2005, c. 47, s. 128 Currency Federal English Statutes reflect amendments current to March 21, 2018 Federal English Regulations are current to Gazette Vol. 152:6 (March 21, 2018) V.nil ol" Dociimciit Copvriglit I Imtnson Reuters Canada I.iniiled or its licensors (excluding individual court documents)..vil rights Vt^st UwNext. CANADA Copyright^ Thomson Reuters Canada Limited or its licensors (excluding individual court documents}..all rights reserved.
Companies' Creditors Arrangement Act, R.S.C. 1985, c. C-36, s. 11.4 Canada Federal Statutes Companies' Creditors Arrangement Act Part II Jurisdiction of Courts (ss. 9-18.6) Most Recently Cited in:re TOYS "R" US (CANADA) LTD., 2017 ONSC 5571, 2017 CarswellOnt 14645. 283 A.C.W.S. (3d) 4711 (Ont. S.C.J. [Commercial List], Sep 20,2017) R.S.C. 1985, c. c-36, s. 11.4 s 11.4 Currency 11.4 11.4(l)Critical supplier On application by a debtor company and on notice to the secured creditors who are likely to be affected by the security or charge, the court may make an order declaring a person to be a critical supplier to the company if the court is satisfied that the person is a supplier of goods or services to the company and that the goods or services that are supplied are critical to the company's continued operation. 11.4(2)Obligation to supply If the court declares a person to be a critical supplier, the court may make an order requiring the person to supply any goods or services specified by the court to the company on any terms and conditions that are consistent with the supply relationship or that the court considers appropriate. 11.4(3)Security or charge in favour of critical supplier If the court makes an order under subsection (2), the court shall, in the order, declare that all or part of the property of the company is subject to a security or charge in favour of the person declared to be a critical supplier, in an amount equal to the value of the goods or services supplied under the terms of the order. 11.4(4)Priority The court may order that the security or charge rank in priority over the claim of any secured creditor of the company. [Editor's Note: S.C. 2000. c. 30, s. 156(2) provides as follows: (2) Subsection (1) [which repealed and replaced s. 11.4 of the Act[ applies to proceedings commenced under the Act after September 29, 1997. J [Editor's Note: S.C. 2001, c. 34. s. 33(2) provides as follows: (2) Subsection (1) [which repealed and replaced the portion ofparagraph 11.4(3 )(c) before stibparagraph (i) of the Act] applies to proceedings commenced under the Act after September 29, 1997.[ Amendment History 1997, c. 12, s. 124; 2000, c. 30, s. 156(1); 2001, c. 34, s. 33; 2005, c. 47, s. 128; 2007, c. 36, s. 65 Currency Federal English Statutes reflect amendments current to March 21, 2018 Federal English Regulations are current to Gazette Vol. 152:6 (March 21, 2018) i v. Next CANADA Copyright C- Thomson Reuters Canada Limited or its licensors (excluding individual court documents). All rights reser/ed.
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