Section 144 – application for partial revocation of cease trade order – issuer cease traded due to failure to file interim financial statements, management's discussion and analysis and certifications of the foregoing filings for the 26-week interim period ended December 25, 2015 – applicant has applied for a partial revocation of the cease trade order to permit the transfer of subordinate voting shares held by the applicant to a holding company also wholly owned and controlled by applicant – partial revocation granted subject to conditions.
Securities Act, R.S.O. 1990, c. S.5, as am., ss. 127 and 144.
IN THE MATTER OF
THE SECURITIES ACT,
R.S.O. 1990, CHAPTER S.5., AS AMENDED
IN THE MATTER OF
DANIER LEATHER INC.
(Section 144 of the Act)
WHEREAS the securities of Danier are subject to a cease trade order made by the Director (the “Director”) of the Ontario Securities Commission (the "Commission") dated February 17, 2016 pursuant to paragraph 2 of subsection 127(1) and subsection 127(4.1) of the Act (together, the "Cease Trade Order"), ordering that trading in securities of Danier cease until the Cease Trade Order is revoked by the Director;
AND WHEREAS Mr. Jeffrey Wortsman (the “Applicant”), the beneficial owner of subordinate voting shares in the capital of Danier, has applied to the Commission pursuant to section 144 of the Act for a partial revocation of the Cease Trade Order to allow the transfer (the “Transfer”) by the Applicant of his subordinate voting shares (the “SVS”) to a holding company to be incorporated and wholly owned and controlled by the Applicant (“Holdco”) (the “Requested Relief”).
AND WHEREAS additional cease trade orders were issued by the Manitoba Securities Commission, the Autorité des marchés financiers and the British Columbia Securities Commission on February 24, 2016, March 3, 2016 and April 6, 2016, respectively (the “Additional Cease Trade Orders”);
AND WHEREAS notwithstanding the Additional Cease Trade Orders, the Applicant has applied only to the Commission for a partial revocation of the Cease Trade Order;
AND UPON the Applicant having represented to the Commission that:
1. Danier is listed as being in default on the Commission’s Reporting Issuers List, due to its failure to file (i) interim financial statements for the 26-week period ended December 25, 2015; (ii) management’s discussion and analysis relating to the interim financial statements for the 26-week period ended December 25, 2015; and (iii) certification of the foregoing filings as required by National Instrument 52-109 Certification of Disclosure in Issuers’ Annual and Interim Filings.
2. No jurisdiction of Canada, other than Ontario, Manitoba, Quebec and British Columbia, has issued a cease trade order against Danier’s securities.
3. On March 21, 2016, Danier made a voluntary assignment in bankruptcy pursuant to the provisions of the Bankruptcy and Insolvency Act (Canada) (“BIA”).
4. Danier is currently subject to proceedings before the Ontario Superior Court of Justice under the BIA (the “BIA Proceedings”). KSV Kofman Inc. (the “Bankruptcy Trustee”) has been appointed as the trustee in the BIA Proceedings.
5. The Bankruptcy Trustee is aware that the Applicant has submitted an application to the Commission for the partial revocation of the Cease Trade Order. It has not raised any objections to the Transfer.
6. The Applicant is a resident of the City of Toronto and the Province of Ontario.
7. The Applicant is the beneficial owner of the SVS.
8. The Transfer will take place in Ontario.
9. The Cease Trade Order was issued by the Commission as a result of Danier’s failure to file the continuous disclosure materials listed in Paragraph 1 above.
10. The Cease Trade Order prohibits all trading in the securities of Danier in Ontario, whether direct or indirect, until the Cease Trade Order is revoked by the Director.
11. The sole purpose of the Transfer is to allow the Applicant to more efficiently organize his tax affairs. There is no other benefit of the Transfer to the Applicant, Danier, the Bankruptcy Trustee, or any other securityholders of Danier.
12. The Applicant believes that the partial revocation of the Cease Trade Order is not prejudicial to the public interest.
13. The Applicant is seeking a partial revocation of the Cease Trade Order under section 144 of the Act to permit the Transfer.
14. The Applicant acknowledges that, following the Transfer, any trade in the securities of Danier held by Holdco is prohibited by the Cease Trade Order.
AND UPON considering the application and the recommendation of staff of the Commission;
AND UPON the Director being satisfied that it is not prejudicial to the public interest to make an order for the partial revocation of the Cease Trade Order under section 144 of the Act;
IT IS HEREBY ORDERED pursuant to section 144 of the Act, that the Cease Trade Order be and is hereby partially revoked solely to permit the Transfer and acts in furtherance of the Transfer that are necessary for and are in connection with the Transfer and all other acts in furtherance of the Transfer that may be considered to fall within the definition of “trade” within the meaning of the Act, provided that prior to the completion of the Transfer, the Applicant will provide to the Commission a signed and dated acknowledgment, on his own behalf and on behalf of Holdco, clearly stating that the issuance of a partial revocation order does not guarantee the issuance of a full revocation order in the future.
DATED at Toronto, Ontario on this 22nd day of March, 2017.
Manager, Corporate Finance