MISSISSAUGA, ON — TravelBrands gave notice yesterday that it will make an application to the Ontario Superior Court of Justice on Friday Aug. 14, 2015 for an order extending the Stay Period previously granted by the court from Aug. 23, 2015 to Sept. 30, 2015.
The notice indicates that on July 6, 2015, TravelBrands entered into an agreement with Sears Canada Inc. further amending its license agreement with Sears, that TravelBrands and Sears are in the process of implementing the amending agreement and that TravelBrands continues to operate Sears Travel in the ordinary course.
In respect to IATA, it states that TravelBrands and the Monitor continue to engage in ongoing communications and that they have been discussing the potential need to increase a letter of credit that the company had provided to IATA. This letter of credit has been extended to Sept. 30, 2015.
TravelBrands, the Monitor and IATA plan to meet in late August to discuss TravelBrand’s continued compliance with IATA’s financial requirements.
TravelBrands continues to be in contact with a number of its critical suppliers and key agents to ensure the continued supply of goods and services and continues to pay its key agents pre-filing and post-filing amounts in the normal course and its suppliers amounts owing for goods and services supplied during the CCAA proceedings.
In respect to 75 Eglinton Ave. East, the building that housed most of TravelBrands’ operations until November, 2013, the notice confirms that TravelBrands delivered a disclaimer notice to the landlord which became effective June 28, 2015. They have engaged in discussions with the landlord and have made some progress towards reaching a mutually agreeable settlement. It indicates that TravelBrands will either continue its discussions with the landlord with the view of reaching an agreeable settlement or if such discussions are not ultimately successful, TravelBrands will seek the court’s approval of a sales process for the sale of substantially all of TravelBrand’s assets.
The landlord has advised that it will object to TravelBrand’s request for such court approval.
The company further advises that it has been developing the sales process so as to effect a restructuring of the company. TravelBrands is also considering a restructuring by way of a plan of compromise and arrangement that could provide the company with some beneficial tax advantages.
The request for the extension is requested to allow for the continued operation of TravelBrand’s business, to provide an opportunity for TravelBrands and the landlord to continue their settlement discussions and to provide TravelBrands with the “breathing space” that it needs to complete an orderly restructuring of its business and to continue going concern operations.
Although it appears that TravelBrands has made progress in the past several months it also appears that there is still some work to be done. The court proceeding called for on Aug. 14, 2015 should provide the reactions of some of the key creditors and the court to this application.