BUSINESSCLASSIFIED
TOPLACEANADCALL:1-866-999-9237
EMAIL:[email protected]
LEGALSCourt File No. CV-20-00639000-00CLONTARIOSUPERIORCOURTOFJUSTICECOMMERCIALLIST
IN THE MATTER OF THE COMPANIES’ CREDITORS ARRANGEMENT ACT, R.S.C.
1985, C. C-36, AS AMENDED (“CCAA”)
AND IN THE MATTER OF A PLAN OF COMPROMISE OR ARRANGEMENT OF
JAMES E. WAGNER CULTIVATION CORPORATION, JAMES E. WAGNER
CULTIVATION LTD., JWC 1 LTD., JWC 2 LTD., JWC SUPPLY LTD. AND
GROWTHSTORM INC.
NOTICE PURSUANT TO THE CCAA (Section 23 (1)(a))
NOTICE is hereby given that on April 1, 2020, the Ontario Superior Court of Justice
issued an initial order (“Initial Order”) pursuant to the CCAA in respect of James
E. Wagner Cultivation Corporation, James E. Wagner Cultivation Ltd., JWC1 Ltd.,
JWC 2 Ltd., JWC Supply Ltd. and Growthstorm Inc. (the “Applicants”) declaring the
Applicants to be companies to which the CCAA applies (the “CCAA Proceedings”).KSV Kofman Inc. (“KSV”) has been appointed as the Monitor in the CCAA
Proceedings. Information regarding the CCAA Proceedings is available onthe
Monitor’swebsite at https://www.ksvadvisory.com/insolvency-cases/case/
james-e-wagner-cultivation-corporation and may also be obtained from Esther
Mann of KSV at [email protected] or 416-932-6009.DATED at Toronto, Ontario this 2nd day of April, 2020.
KSV KOFMAN INC.
MONITOR
150 King Street West, Suite 2308
Toronto, Ontario M5H 1J9B2| REPORTONBUSINESS OTHEGLOBEANDMAIL | WEDNESDAY,APRIL8,2020
TMX Group Ltd.CEO Lou Eccleston forfeited
nearly $9-million in company stock awards
when he retired in January, but left the stock ex-
change operator with roughly $34-million in
share-based compensation following a five-
year tenure.
Mr. Eccleston left abruptly after TMX investi-
gated allegations he sexually harassed employ-
ees during his tenure at Bloomberg LP in the
1990s. The TMX probe “found no evidence that
Mr. Eccleston engaged in sexual harassment or
sexual misconduct while employed at TMX.”
The Globe and Mail later reported that TMX em-
ployees alleged he bullied colleagues and fos-
tered a toxic work environment at the operator
of the Toronto Stock Exchange.
The compensation details of his departure,
included in an annual proxy circular to share-
holders, were previously undisclosed. TMX re-
vealed that Mr. Eccleston forfeited a “perform-
ance stock option grant” from 2017, as well as
share awards from 2018 and 2019.
Stock awards have become the bulk of exec-
utive pay at most public companies. Companies
typically make awards of options, or some form
of restricted shares, and the executive must stay
in the job for a number of years for the awards to
“vest.” Once the awards vest, the executive can
usually sell the stock on the open market.
Because Mr. Eccleston was 61 when he left the
company, he was eligible to retire, rather than
resign. TMX’s retiring executives can normally
keep all the unvested stock awards they’ve beengiven. However, Mr. Eccleston forfeited unvest-
ed awards from the company’s restricted-share
and performance-share programs when he left.
At TMX Group’s share price on his resignation
date, the shares were worth roughly $4.7-mil-
lion. He also forfeited his 2017 performance
stock options, which had already vested. TMX
said the performance condition – a sustained
increase in TMX’s share price – was met in July,- The 108,814 options he forfeited had a po-
tential profit of $4.1-million in January.
He was able to retain stock awards worth
about $34-million on the day he left. He kept
about $9-million worth of stock options that
had not yet vested, and about $23-million which
had. None of the options had any performance
conditions. Mr. Eccleston also collected a $2.38-
million payout from his 2017 performance-
share grant on Jan. 23, the same day as the re-
maining executives at TMX. His U.S. health ben-
efits continue until July, 2022.
The circular repeats the company statement
that it found no evidence of sexual misconduct
by Mr. Eccleston, and notes the retirement ar-
rangement “was negotiated,” but offers no addi-
tional comment on the matter.
Mr. Eccleston no longer has the obligation to
disclose his stock sales, and he may already
have exercised options or sold shares. Their val-
ue will ultimately depend on when he sells
them and the price of TMX stock at that time.
TMX said chief financial officer John McKen-
zie, who is serving as interim chief executive, is
receiving an extra $25,000 a month in salary, an
extra bonus opportunity equal to the extra sala-
ry, and a one-time stock award valued at
$750,000.
FormerTMXCEOforfeitedmillions
instockawardsafterJanuarydeparture
DAVIDMILSTEAD
INSTITUTIONALINVESTMENTREPORTERTwo big Canadian commercial
landlords say the majority of
their tenants have made April
rent payments, providing the
first glimpse into the health of
the real estate market as scores
of businesses are forced to close
due to the coronavirus pandem-
ic.
Eric Carlson of B.C.-basedAn-
them Properties, which owns
$5-billion worth of commercial,
industrial and residential real es-
tate in North America, says
about 70 per cent of his the ten-
ants in his 60 buildings were
paid up.
Ed Sonshine, the CEO ofRio-
Can Real Estate Investment
Trust, said “a vast majority” of
the REIT’s major national ten-
ants paid the April rent. Mean-
while, two-thirds of his smaller,
independent businesses took ad-
vantage of a 60-day, interest-free,
rent deferral that he offered.
It’s been a frantic few weeks
for dozens of commercial prop-
erty owners. A number of major
players, including Ivanhoe Cam-
bridge, Cadillac Fairview, Oxford
Properties and QuadReal, have
said they will work with tenants
who need rent relief on a one-
on-one basis, and a number of
retailers and small businesses
have not been able to pay given
shutdowns caused by the pan-
demic.
“This thing has been moving
so fast, it makes my head spin,”
said Mr. Sonshine, whose REIT is
one of Canada’s largest property
owners, with malls, shopping
plazas, offices and apartments in
Toronto and other major cities.
In Vancouver, Mr. Carlson,
spends his days in conversations
with his team through three
large-screen computers to cope
with the rapidly changing eco-
nomic landscape.
“In the big picture, the econo-
my went to 50 per cent less over-
night. We keep trying to compare
it to the recession, but it’s not.”
Ivanhoe Cambridge and Ox-
ford Properties declined to pro-
vide numbers on the share of
tenants who made their Aprilrent payments.
Mr. Sonshine said independ-
ent tenants – small businesses
such as nail salons and restau-
rants, comprise about 15 per cent
of RioCan’s commercial tenants.
“We have taken the position,
right from the beginning of this
crisis, almost a month ago, that
anybody that asks for a 60-day
deferral, we are giving it to
them,” he said, and that they
would reassess at the end of May.
“You have to keep focusing on
one thing, leases are a contract
and they have to pay rent later or
go into some form of bankrupt-
cy. On the independent tenants,
we don’t want them to have to
make those kind of choices.”
He said about two-thirds of
those tenants took advantage of
the 60-day rent deferral.
“The other one-third, some-
what to my surprise, paid their
rents. Maybe a lot of those res-
taurants are doing fine on take-
out. They also realize that sooner
or later that rent has to be paid
and they did not want to get be-
hind.”
Mr. Sonshine said 85 per centof his commercial property ten-
ants are what he calls national
tenants, such as Best Buy and Lo-
blaws. His portfolio also includes
big names that have been forced
to shut down, such as fitness
chain Goodlife Fitness and fash-
ion retailer H&M.
“There are some big compa-
nies that did not pay but very
few and those quite frankly, we
are reminding them that, ‘Guys,
you have a contract. Unless you
are planning to go broke, you got
to pay this.’ I frankly expect vir-
tually all of them to pay.”
He said those who don’t pay
could face legal action or evic-
tion. “That will be done on a ten-
ant-by-tenant basis, very
thoughtfully,” he said.
At Anthem, Mr. Carlson said
he noticed a range in attitudes
among his tenants. Some told
him they could not pay the rent
at all. Mr. Carlson suspects they
were already in financial trouble
and the pandemic now gives
them an excuse. Another tenant
with a small operation promised
Mr. Carlson that he’d collect pop
bottles to pay his rent if he hadto. Still another business, “own-
ed by a high-net-worth family,”
told him immediately they
wouldn’t pay April rent.
“I do think there will be a day
of reckoning. That arrogant ten-
ant, we’re looking to replace
them.”
He’s trying to help those who
he thinks really need it. “I have
to be stern but friendly. I’m say-
ing ‘What do you need to survive- but don’t take advantage.’ If the
tenants do the best they can,
we’ll all get through.”
Both executives are also as-
sessing their own cash-flow sit-
uations. Although RioCan did
not receive all rent that was due,
the REIT says it has more than
enough cash flow to meet its fi-
nancial obligations. “We can ride
out this storm,” Mr. Sonshine
said. “It is a temporary cash-flow
storm.”
Mr. Carlson said he is conserv-
ing and drumming up cash
wherever he can. “We have to
stretch out our liquidity, we have
to be conservative with our cash,
to keep everybody happy on the
supply side.”
MajorityoftenantspaidAprilrents,bigcommerciallandlordssay
FRANCESBULA
RACHELLEYOUNGLAI
I
t’s increasingly difficult to get
a handle on where U.S. trade
policy is going at any partic-
ular time. The latest twist con-
cerns ratification of the Canada-
U.S.-Mexico Agreement (called
CUSMA in Canada and USMCA in
the United States because U.S.
President Donald Trump hates
the word “NAFTA”).
All three countries have
passed internal legislation ap-
proving and implementing the
agreement. But USMCA only be-
comes legally binding 60 days af-
ter official ratification notices are
exchanged by thethree govern-
ments. Last week, Canada pro-
vided its notice. Mexico did the
same a bit earlier.
So far, there’s nothing from
the American side. It’s not en-
tirely clear why the U.S. is now
holding things up. Media outlets
in Washington are unable to find
out.
The U.S. delay is puzzling. Ear-
lier this year, it was the U.S. that
was pushing Canada and Mexico
to get these notices out so the
deal could enter into force by
June 1. Now the earliest date
seems to be sometime in July,
possibly even later.
Getting the agreement into ef-
fect before summer would seem
to be an advantage in Mr.
Trump’s re-election strategy, al-
lowing him to campaign on suc-
cessfully scrapping NAFTA, a
dirty word, and bringing into ef-
fect this new “America first”
trade agreement. But now the
holdup is the White House itself.
Some of this may have to do
with the enormous pressures in
dealing with the COVID-19 crisis.
But it’s hard to explain why
Canada and Mexico have been
able to provide their notices
even with the pandemic in full
flood and yet this couldn’t be
handled by Washington. There’s
probably something more be-
hind this.
On March 30, a number of
prominent senators wrote to the
U.S. Trade Representative, saying
the agreement’s entry into force
needed to be delayed so businessand labour could get ready to
make needed adjustments. They
asked the administration to
work with Congress stakeholders
to determine a more feasible
timeline. It didn’t say what that
schedule should be.
Chief among the concerns
would be burdensome new rules
of origin for the auto sector.
Producers have to certify a high-
er level of North American
content than under NAFTA.
After phase-in, the content re-
quirement rises to 75 per cent,
particularly for what are de-
scribed as “core” parts. And
there’s another requirement that
all steel components in the vehi-
cle must be made from steel
melted and poured in North
America.
Because of the compliance
burdens, given massive layoffs
and continuing uncertaintyfaced by the auto industry, com-
panies have been asking for
some breathing space.
The Canadian automotive
parts manufacturers have also
asked Ottawa to delay ratifica-
tion.
There are other auto-related
requirements to be met before
USMCA can enter into force. Uni-
form regulations for applying
these origin rules have to be
agreed on by the three govern-
ments, and whilegovernment-
to-government meetings have
been taking place, it may take
more time before these can be
worked out.
While the U.S. notice is being
held up, one suggestion in Wash-
ington circles was for the three
governments to agree on place-
holder provisions for these auto-
motive rules – with more specific
rules to follow later – as a way to
accelerate progress and make a
June or July goal tenable. That
could be a solution. While there’s
nothing specific in the USMCA
allowing this kind of staged im-
plementation,governments can
always agree to a process by way
of a side letter or separate proto-
col to do this.
It’s difficult to know how long
this hiatus will last. Given the
electoral situation in the U.S.,
getting the deal into full oper-
ation would seem to be in Mr.
Trump’s political interest. For
that reason, and to remove lin-
gering uncertainties on the trade
front, there’s every reason to get
the USMCA into full effect and to
put this long and agonizing saga
behind us.
If I may be forgiven by Win-
ston Churchill for borrowing a
phrase declared by him in a
much different time and context,
this won’t be the end or even the
beginning of the end, but for
Canada-U.S. trade, getting the
USMCA into effect will at least be
the end of the beginning.WhyistheWhiteHousedelayingapprovalofUSMCA?
Canada,Mexicoboth
providedratification
notices,butU.S.seems
reluctanttodoso,and
therestofusaretrying
tofigureoutwhy
FormerMexican
presidentEnriquePena
Nieto,U.S.President
DonaldTrumpandPrime
MinisterJustinTrudeau,
alongwithtrade
representatives,
signtheUSMCAtrade
agreementin
Buenos Aires in
2018.SEANKILPATRICK/
THECANADIANPRESSLAWRENCEL.HERMAN
OPINIONFormerCanadiandiplomatiscounsel
atHerman&Associatesandsenior
fellowoftheC.D.HoweInstitutein
Toronto