SFG Parent, Inc. completes reorganization

Specialty Foods Group Income Fund, an Ontario income trust, went public in 2003 at $10 per unit. The establishment of the income fund resulted in a complex cross-border capital structure of the Specialty Food Group of companies that was adopted for tax and other reasons. The capital structure of these companies became even more complex in 2006 when the balance sheets and ownership of certain companies in the group had to be restructured in order to address financial difficulties. That restructuring failed to produce a viable ongoing income fund such that, when the units were ultimately cease-traded in 2009, they were trading at a price of approximately a half cent per unit.

In January 2017 a Plan of Arrangement was proposed to restructure and simplify the very complex ownership structure of the income fund and the entities in which it had a direct or indirect ownership interest. That plan was approved by the court in March. As a result, unit holders received an immediate cash distribution of approximately $0.89 per unit and are expected to receive future distributions.

The Plan of Arrangement was effected under the Business Corporations Act (Ontario) in combination with the Trustee Act (Ontario) on February 28, 2017. Court orders were obtained and reorganizations were effected in Canada and the US with the result that, among other things, agreed economic entitlements were effected, distributions of funds were approved, Canadian and US tax issues were addressed, a number of claims (including for interest arrears and for reimbursement of inter corporate amounts) were compromised, releases were exchanged and the right of holders of securities to exchange those securities was terminated. Justice Wilton-Siegel when approving the final court order described the Plan of Arrangement as one of the most complicated that he had ever seen.

Fasken Martineau DuMoulin LLP acted as special counsel to the applicants and as counsel to the Specialty Foods operating entities and was primarily responsible for the Canadian aspects of the restructuring, with a team led by Jon Levin and including Jessica Catton Rinaldi, Will Shaw and David Steinhauer (corporate) and Aubrey Kauffman and Murray Braithwaite (litigation) and Bill Bies (tax). The Specialty Foods operating entities were represented by McDermott Will & Emery LLP in the US with a team led by Scott Williams and including Ann Marie Brodarick, Elissa Port and Bernardo Vaz (corporate) as well as Dan Zucker (tax).

Cassels Brock & Blackwell LLP acted as counsel in Canada to one of the large US stakeholders, with a team consisting of Jane Dietrich and Robert Cohen (litigation) and Jeffrey Roy (corporate). The same stakeholder was advised in the US by Neal, Gerber & Eisenberg LLP with a team led by Michael Gray and including Cristina DeMento and Chloe Milstein (corporate).

Berl Nadler (corporate) from Davies Ward Phillips & Vineberg LLP acted as counsel to one of the large Canadian stakeholders.

Tim Heeney (corporate) from Goodmans LLP acted as special counsel to the sole director of the corporate trustee of Specialty Foods Group Income Fund.



Fasken Martineau DuMoulin LLP Davies Ward Phillips & Vineberg LLP Goodmans LLP