In the culmination of a complex cross-border bankruptcy sales and auction process, on February 28, 2017, Performance Sports Group Ltd. (PSG) announced the completion of the sale of substantially all of its assets to an investor group led by Sagard Holdings Inc. (Sagard) and Fairfax Financial Holdings Limited (Fairfax) for US$575 million, subject to certain adjustments, and the assumption of related operating liabilities. The new, privately held company will be a leading developer and manufacturer of ice hockey, roller hockey, lacrosse, baseball and softball sports equipment, and related apparel. Its products will be sold under the BAUER, MISSION, MAVERIK, CASCADE and EASTON brand names and will be marketed and distributed worldwide.
The sale was completed in connection with PSG’s cross-border restructuring proceedings which commenced on October 31, 2016, with joint proceedings in the Ontario Superior Court of Justice under the Companies’ Creditors Arrangement Act and the U.S. Bankruptcy Court for the District of Delaware under Chapter 11 of Title 11 of the U.S. Code.
The Sagard/Fairfax-led investor group made the “stalking horse” bid at the outset of the sales and auction process, which was ultimately determined to be the successful bid. To provide working capital for PSG’s operations and to fund the auction and sales process during the restructuring process, PSG’s existing asset-based lenders and Fairfax and Sagard provided PSG with an aggregate of US$386 million in debtor-in-possession (DIP) financing. Both Canadian and US courts approved the sale and associated reorganization transactions pursuant to orders dated February 6, 2017, and supplemented on February 10, 2017. Upon completion of the sale, PSG ceased to exist as an operating business and is in the process of allocating and distributing the sale proceeds to the debtors’ stakeholders in the US and Canadian bankruptcy proceedings.
PSG was represented in house by a team led by Michael Wall, Executive Vice President, General Counsel and Corporate Secretary.
PSG was represented in Canada by Stikeman Elliott LLP, with a team comprised of Edward Waitzer, Mihkel Voore, Jonah Mann, Andrew Lahey, Frank Selke, Meghan Jones and Julia Dmitrijeva (M&A/securities), Peter Howard, Elizabeth Pillon, Kathryn Esaw, Lee Nicholson and Vlad Calina (restructuring/insolvency), Denise Duifhuis (corporate), Craig Mitchell, Howard Rosenoff, Vanessa Beamish and Daniel Tsarevsky (banking/financing), Dean Kraus, Marie-Andrée Beaudry, Jean-Guillaume Shooner, Dominic Bédard-Lapointe, Katy Pitch, Lindsay Gwyer and Eryn Fanjoy (tax), Ramandeep Grewal and Laura Levine (regulatory), Paul Collins, Michael Kilby and William Wu (competition), Nancy Ramalho and Natasha vandenHoven (employment, labour and pensions), Alan D’Silva, Mark Walli and Paula Price (litigation), Larry Cobb and Myriam Fortin (environmental), Justine Whitehead (intellectual property) and Teanna Lobo (real estate).
PSG was represented in the United States by Paul, Weiss, Rifkind, Wharton & Garrison LLP, with a team comprised of Kelley Cornish, Alice Belisle Eaton, Claudia Tobler and Diane Meyers (bankruptcy and corporate reorganization), Moses Silverman, Aidan Synnott, Leslie Fagen and Justin Anderson (litigation), and Angelo Bonvino, Andrew Foley, Thomas de la Bastide III, Claudine Meredith-Goujon and Nathan Sawyer (corporate).
Bennett Jones LLP represented independent members of the board of directors of PSG, with a team that included Marvin Yontef, Robert Staley, Kristopher Hanc and Sean Zweig.
Sagard was represented in house by Sacha Haque, General Counsel & Secretary of Sagard.
Sagard was represented in Canada by Blake, Cassels & Graydon LLP, with a team comprised of John Tuzyk, Philippe Bourassa, Anthony Lanouette-Marier, Chanelle Desrosiers-Stewart and Alexis Beaudin-Fol (M&A), Bernard Boucher, Sébastien Guy and Emily Hazlett (restructuring/insolvency), Justin Drake (corporate), Yannick Beaudoin, Aude Godfroy, Rebecca Dawe and Xavier Boulet (banking/financing), Jeffrey Trossman, Josh Jones, Allan Gelkopf and Zvi Halpern (tax), Julie Soloway and Litsa Kriaris (competition), Matthew Merkley and Jacob Gofman (securities), Natalie Bussière, Elizabeth Boyd and Anna Abbott (employment, labour and pensions), Ryan Morris (litigation), Charles Kazaz and Anne-Catherine Boucher (environmental) and Anthony Prenol (intellectual property).
Sagard was represented in the United States by Kirkland & Ellis LLP, with a team comprised of Michael Movsovich, Richard Campbell, Shawn O’Hargan, Andrew Kimball and Bobak Fatemizadeh, (M&A), Carolina Serra, Warren Samlin, Isaac Pasha and Kristen Trofa (corporate), Christopher Marcus and George Klidonas (restructuring), Andres Mena, Jessica Subler, Suhan Shim and Alejandro Sueldo (debt finance), Richard Aftanas (capital markets), David Grenker and Tristan Evans-Wilent (tax), Edward Sadtler, Frank Wei and Zara Ohiorhenuan (IP transactional), Edward Holzwanger and Michael Shulman (labour/employment), Brian Land and Carleigh Rodriquez (environmental), Alexandra Mihalas and Scott Metzger (employee benefits), Scott Price and Julia Onorato (executive compensation), Mark McKane (litigation) and Mark Kovner and Ellen Jakovic (antitrust).
Fairfax was represented in house by a team led by Derek Bulas, Associate Vice President, Legal.
Fairfax was represented in Canada by Torys LLP, with a team comprised of David Chaikof, Thomas Yeo, Josh Lavine, Marissa Daniels and Simonne Horwitz (M&A/securities), David Bish, Adam Slavens and Lily Coodin (restructuring/insolvency), Amanda Balasubramanian (banking/financing), John Tobin (tax) and Omar Wakil (competition).
Fairfax was represented in the United States by Shearman & Sterling LLP, with a team comprised of Scott Petepiece, Fred Sosnick, Jason Lehner and Richard Fischetti.
Ernst & Young Inc., in its capacity as court appointed monitor, was represented in Canada by Thornton Grout Finnigan LLP, with a team comprised of Robert Thornton and Rachel Bengino.
Ernst & Young Inc., in its capacity as court appointed monitor, was represented in the United States by Allen & Overy, with a team comprised of Ken Coleman and Josh Neifeld.
The Ad Hoc Committee of Term Lenders was represented by Goodmans LLP in Canada with a team comprised of Joe Latham, Brendan O’Neill and Ryan Baulke (restructuring), Jeff Citron (finance) and Allan Goodman (corporate).
The Ad Hoc Committee of Term Lenders was represented by Weil, Gotshal & Manges LLP in the United States with a team comprised of Matt Barr, Gabriel Morgan and David Cohen (bankruptcy), and Doug Urquhart and Phil Ratner (banking and finance).