TORONTO, Feb. 7, 2019 /CNW/ - Callidus Capital
Corporation ("Callidus" or the "Company") (TSX:CBL) today announced
that, on February 4, 2019, the
Quebec Court of Appeal ("Court of
Appeal") ruled in favour of Callidus and reversed the decision
rendered by the Quebec Superior Court on March 16, 2017.
The Court of Appeal decided that:
- Callidus is allowed to file its amended plan of arrangement
under the Companies' Creditors Arrangement Act ("CCAA") in
respect of the company formerly known as Bluberi Gaming
Technologies Inc. ("former Bluberi") in order to settle the alleged
claim of former Bluberi, its former president Gerald Duhamel and Mr. Duhamel's family trusts
against it;
- Callidus will have the right to vote on its own amended plan
and on any other proposed plan of arrangement;
- The litigation funding agreement ("LFA") negotiated by former
Bluberi with IMF Bentham Limited to pursue its litigation against
Callidus cannot be implemented unless its terms and conditions are
approved by the required majority of former Bluberi's creditors,
further to the filing by former Bluberi of a formal competing plan
of arrangement under the CCAA.
The Court of Appeal ordered the return of the file to the Quebec
Superior Court to schedule a meeting of creditors to vote on
Callidus' amended plan of arrangement, and any other matters.
The Court of Appeal also ordered that at one and the same meeting,
if the Duhamel entities wish to submit a competing plan of
arrangement, the complete unredacted terms of the LFA should be
presented to members of the Appellant Creditors' Group and their
professionals upon signature of a non-disclosure agreement.
Patrick Dalton, Interim CEO of
Callidus said, "We are pleased with the findings and decision of
the Quebec Court of Appeal.
The allegations as presented by Mr. Duhamel are entirely without
merit and nothing more than an attempt to damage Callidus through
sensational headlines."
In rendering its decision, the Court of Appeal also
indicated:
- The quantum of the alleged claim (CDN$228 million) against Callidus is not
supported by the slightest substantiation in the record before
it.
- The Court materials indicate that Callidus commenced financing
the Respondents in 2012, the hard facts on the ground led it to
take a more stringent attitude towards its debtors. In such regard,
rather than selling 3,300 machines in 2013 as former Bluberi had
apparently forecasted, it sold 324. Forecasted gross revenue of
$46,355,000 in 2013 became
$17,422,000 generating a loss of
$9,661,000, which continued with
losses of approximately $3,8000,000
in 2014 $17,500,000 in the first 9
months of 2015. This appears to predate, at least in part, the
alleged heavy-handed behavior of Callidus leading to the CCAA
filing.
- Moreover, the proposed litigation does not attempt an
explanation of how a company that had generated considerable
financial losses by the end of 2015 could subsequently have
suffered $200 million of damage at
the hands of Callidus.
- As well, the proceedings and positions of Callidus before the
lower court nowhere appear to have been sanctioned by the judge as
abusive as permitted by the provisions of Article 51 and following
of the Quebec Code of Civil Procedure. The presence of competing
facts, which the judge does not mention, underline the perilous
nature of the exercise he embarked upon.
About Callidus Capital Corporation
Established in
2003, Callidus Capital Corporation is a Canadian company
that specializes in innovative and creative financing solutions for
companies that are unable to obtain adequate financing from
conventional lending institutions. Unlike conventional lending
institutions who demand a long list of covenants and make credit
decisions based on cash flow and projections, Callidus credit
facilities have few, if any, covenants and are based on the value
of the borrower's assets, its enterprise value and borrowing needs.
Further information is available on our
website, www.calliduscapital.ca.
SOURCE Callidus Capital Corporation