TORONTO — The Ontario Superior Court of Justice last week granted TravelBrands’ motion to extend the Stay Period to and including Sept. 30, 2015 to approve the first report of KPMG.
This extension was granted without any objection or opposition from either the court or the creditors and other stakeholders who are on the service list or who appeared at the hearing of the motion.
TravelBrands is now free to continue its negotiations with the owner of 75 Eglinton Avenue East and IATA and to consider its options with regards to ending the Stay Period granted in these proceedings.
The Cash Flow results for the eight-week period ending on Aug. 7, 2015, appear to be very close to the projections made earlier in these proceedings. Net trust cash flow was within $1 million of the earlier projections and net operating cash flow exceeded projections by approximately $4.5 million.
As at Aug. 7, 2015, the aggregate balance in TravelBrands’ trust accounts was $3 million more than projected. The company’s operating cash was approximately $0.6 million greater than forecast.
These results did not require Red Label advancing any of the $4 million that it had committed to backstop TravelBrands.
As to the company’s cash flow projections, it will have approximately $4.3 million net cash flow for the period from Aug. 7, 2015 to Nov. 6, 2015. This will include a $2 million advance from Red Label. The Monitor states that “based on the August Cash Flow Forecast, the company is projected to have sufficient liquidity during the Forecast Period; however, the funding (from Red Label) has been included to ensure that the company is in continued compliance with working capital covenants required by TICO, IATA and BMO.”
The Monitor goes on to state that it understands that the company will continue to make payments for goods and services supplied post-filing, as permitted by the initial order as well as all amounts whether incurred pre or post filing owing to travel agents and with the consent of the Monitor and Red Label, certain pre-filing payments to those key suppliers that the company considers to be critical to the business.
