Plus   Neg

CannTrust Enters Into Restructuring Support Agreement To Settle Shareholder Lawsuits

Embattled Canadian cannabis company CannTrust Holdings Inc. said it has entered into a Restructuring Support Agreement or RSA with plaintiffs who have commenced litigation in Canada and the U.S. against the company on behalf of CannTrust shareholders.

The company noted that the RSA provides a comprehensive framework for settling the securities claims under a court-approved plan of arrangement under Canada's Companies' Creditors Arrangement Act or CCAA.

The RSA also contemplates the resolution of all claims against CannTrust and certain other defendants in the securities lawsuit, including Greg Guyatt, Mark Dawber, John Kaden, Robert Marcovitch, Shawna Page, Mitchell Sanders and Cajun Capital Corp.

Upon the implementation of the plan of arrangement, CannTrust will pay C$50 million into a trust that will be established for the benefit of the securities claimants. The RSA permits other defendants to elect to join in the settlement of the securities lawsuit pursuant to the plan of arrangement, subject to certain conditions.

The company stated that its cash position at January 19, 2021 was about C$78 million.

"Today's announcement represents a significant milestone towards the resolution of substantially all of the civil litigation claims that were filed against CannTrust following the Company's non-compliance with certain Health Canada regulations," said Greg Guyatt, Chief Executive Officer at CannTrust.

CannTrust said it remains under CCAA protection to facilitate its efforts to resolve its civil litigation claims and complete its review of strategic alternatives, which includes a review of financing options.

CannTrust was granted creditor protection under the CCAA in March 2020 after Health Canada suspended the company's licenses to produce and sell recreational as well as medical cannabis in Canada.

The regulator had found CannTrust to be non-compliant with regulations for growing cannabis in unlicensed greenhouse rooms and also for providing inaccurate information.
However, the company's licenses for its Fenwick and Vaughan facilities were reinstated by Health Canada later in 2020.

CannTrust said in December 2020 it is returning to the Canadian cannabis marketplace with two of its recreational brands, 'Liiv' and 'Synr.g'.

For comments and feedback contact: editorial@rttnews.com

Health News

Follow RTT