Lexpert Magazine

July/August 2017

Lexpert magazine features articles and columns on developments in legal practice management, deals and lawsuits of interest in Canada, the law and business issues of interest to legal professionals and businesses that purchase legal services.

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32 LEXPERT MAGAZINE | JULY/AUGUST 2017 COVER STORY Insolvency The SINCE IT IS TOO TEMPTING to use sports clichés when talking about the demise — and subsequent salvaging — of North America's preeminent sporting- goods maker last year, let's just shed the guilt and go with it. Performance Sports Group Ltd. (PSG), parent company of such globally iconic brands as Bauer hockey gear and Easton baseball equipment, got tagged hard by bankruptcy last year. Among its fouls, it tried to steal bases from its own independent retailers, it dropped the ball on sales, it was challenged by securities umpires — and, with all that, investors le the stands in droves. On October 31, 2016, aer months of uncertainty about its fading prospects, PSG, headquartered in Exeter, New Hampshire, voluntarily filed for insolvency protection under the Companies' Creditors Arrangement Act (CCAA) in the On- tario Superior Court of Justice, and in the United States, under Chapter 11 of the U.S. Bankruptcy Code in the District of Delaware. Facing a liquidity crisis, that same day PSG also announced a potential sav- iour: its major shareholder, Sagard Holdings, which held 16.9 per cent of its stock. A subsidiary of Montréal-based Power Corp. of Canada, headed by billionaire Paul Desmarais Jr., Sagard announced it was making a US$575-million stalking horse bid for the company in conjunction with fellow Canadian billionaire Prem Watsa, the founder, chairman and CEO of Fairfax Financial Holdings. Together, the Sagard/Fairfax line-up, along with several other existing lenders, offered PSG US$386 million in debtor-in-possession (DIP) financing so it could continue op- erations while it restructured under court supervision. An auction process was then launched to see if anyone would top the Sagard/Fairfax bid. Arena IN 2016, BANKRUPTCY CHECKED PERFORMANCE SPORTS GROUP INTO THE BOARDS. BUT AN UNBEATABLE BID FOLLOWED BY A US$575-MILLION ASSET SALE TO SAGARD HOLDINGS AND FAIRFAX FINANCIAL HOLDINGS SAVED ITS ICONIC HOCKEY AND BASEBALL BRANDS BY ANTHONY DAVIS PHOTO: SHUTTERSTOCK

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