StateHouse Holdings today said it's pursuing bankruptcy according to Canada’s Bankruptcy and Insolvency Act.
Last month, Pelorus Fund REIT filed a complaint in the San Diego Superior Court seeking, among other remedies, that StateHouse and its various subsidiaries be placed into receivership. Additionally, Pelorus and holders of a majority in principal amount of the company’s secured notes told the company that it's in default of its payment obligations pursuant to certain loans.
In connection with the receivership proceedings, the company and the lenders entered into a stipulation dated October 9, 2024 for the appointment of a receiver to preserve the ongoing operations of the business in California.
The company said the decision to commence the bankruptcy proceedings for the Canadian parent entity, StateHouse, was made after careful consideration of the current financial condition of the company and its subsidiaries, the company’s inability to pay its liabilities as they become due, the receivership proceedings in the U.S., and the months-long negotiations between the company, the lenders and various other secured creditors of the company.
"We are pleased at the progress made since we initially filed our Receivership complaint in September and to enter into a stipulation earlier this week with majority holders of the company's 9.0% secured notes and the company for the appointment of a receiver. That action, combined with today's filing, protects StateHouse employees, customers, business partners and vendors and preserves the company's ongoing operations in the state of California, enabling it to operate as normal across its production and distribution footprint in the state," said Pelorus in a statement. "As we have stated since we initiated these proceedings, we recognize the significant value of StateHouse's business, employees and operations, and look forward to continuing to work with the company and the court-appointed receiver to ensure it is well positioned with a cleaner, more efficient and appropriate structure moving forward."
