TravelBrands Inc. will be in court on Friday (Aug. 14) to request a further extension of its protection under the Companies’ Creditors Arrangement Act (CCAA). Under CCAA, multiple extension are a normal part of the process as long as progress is being made.
In requesting the extension of the protection order to Sept. 30, 2015, TravelBrands Inc. outlined some of the progress that it had been making.
Its court filing points out that on July 6,2015, Sears Canada Inc. and TravelBrands entered into an Amending Agreement whereby the terms of the license agreement between Sears and the Company dated Jan. 18, 2011, as amended and restated on Feb. 2, 2014, would be further amended (the “Amending Agreement”). Currently, TravelBrands and Sears are in the process of implementing the Amending Agreement and TravelBrands continues to operate Sears Travel in the ordinary course.
As well, TravelBrands and the (court appointed) Monitor continue to engage in ongoing communications with the International Air Transport Association and have provided IATA with all information requested to date.
TravelBrands and IATA have been discussing the potential need to increase a letter of credit that had been provided by the Company to IATA in connection with a change of control transaction, and, in light of ongoing dialogue with IATA, TravelBrands has extended the expiration date of the Letter of Credit to Sept. 30, 2015.
Also TravelBrands, the Monitor and IATA will be meeting in person in late August for the purpose of discussing TravelBrands’ restructuring, its continued compliance with IATA’s financial requirements and the value and term of the Letter of Credit.
The filing also indicated that TravelBrands and the Monitor continue to provide the Travel Industry Council of Ontario with extensive continuing and timely financial reporting, including with respect to funds received from customers for travel services that TravelBrands is holding in trust.
As well, TravelBrands has continued to be in contact with a number of its critical suppliers and key agents to ensure the continued supply of goods and services and, since the granting of the Initial Order, has 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.
As for 75 Eglinton, the filing notes that on May 29, 2015, TravelBrands delivered a disclaimer notice to the 75 Eglinton landlord, which became effective as of June 28,2015. Counsel to TravelBrands, the Monitor and the Landlord have entered into a series of exchanges and TravelBrands and the Landlord have engaged in numerous without prejudice meetings and conference calls to discuss a possible settlement.
The filing indicates that TravelBrands and the Landlord have made some progress towards reaching a mutually agreeable settlement.