Numerous creditors of Pride Group Ltd. (PGL), which has been under creditor protection since late March, are seeking lift stay motions that would allow them to seize and sell assets to which they have laid claim.

But in a last ditch effort to keep the company a going concern, a $56-million bid for Pride Group has been put forth by its founder and owners, the Johal family. Court Monitor Ernst & Young filed its 12^th report Aug. 6, in a bid to buy more time for a sale of Pride Group that would allow it to continue operating.

In that report, the Monitor updated efforts to find a buyer for the beleaguered company. A total of 71 companies were approached, of which 24 signed a non-disclosure agreement. Only three submitted offers, and of those only two would allow Pride Group to continue as a going concern.

“Of the three bids received, one of the bids was for the purchase of certain trailers and a pool of certain customers. A second bid was for PGL’s business operations as a going concern, but significantly lower in value to the third bid which is from the proposed purchaser,” the Aug. 6 report revealed.

That bid is being led by members of the Johal family, which founded and ran Pride Group before it entered creditor protection. The bid, valued at $56.2 million, would allow the company to continue operating and would, in the opinion of the Monitor, be the best result for creditors.

The Monitor indicated the Johal family, “has been working diligently to obtain an unconditional financing commitment and is close to doing so.”

Should they fail to secure financing, the Monitor suggests the wind-up of Pride’s business operations could be somewhat chaotic. It continues to operate some 1,068 trucks and trailers with loads, scattered across the country, and of which about 80% are hauling perishable goods – many for blue chip customers.

“Further, most idle units are booked for ongoing loads on a regular basis,” the report said. “Therefore, in the event the going concern sale does not proceed, the Monitor and the CRO (chief restructuring officer) propose an orderly wind-up of PGL’s business operations to be coordinated by the Monitor and CRO, with the assistance of a third party, in the best interests of the stakeholders, including employees and customers, and to avoid a chaotic situation where trucks and trailers are in transit and no funding or coordination is in place to ensure they are returned after completing customer deliveries in a safe and organized manner.”

Creditors impatient

Creditors, however, appear to be growing impatient. Those including BMO, Bank of Nova Scotia, TD, Daimler Truck Financial Services and others, have filed lift stay motions which would lift the stay of proceedings against Pride and allow creditors to repossess and sell the equipment – all depreciating assets — to which they lay claim.

However, the Monitor indicates granting the creditors’ lift stay motions would affect some 500 jobs. “Overall PGL’s business operations include over 500 individuals as office staff or drivers,” the Monitor reported.

Meanwhile, a $30-million Debtor-in-Possession (DIP) financing, backed by RBC, has matured and its funds have been exhausted, meaning Pride’s accounts receivable from existing operations are currently what keeps it going (though Pride is reportedly in talks with another lender to secure a second DIP loan).

Further adding to the confusion, the Monitor has identified 64 VINs identified as “multiple collateral vehicles,” or those to which several lenders have laid claims.

Pride Group real estate sold

Meanwhile, the CRO has overseen the sale of two more Pride Group real estate properties. Quebec-based truck dealer Globocam bought its Cornwall property for $7.5 million. It celebrated the opening of a new dealership there in June.

About 15 Pride Group trucks and 85 trailers are still sitting there until up to Sept. 30, with Pride paying $7,500 a month to lease those spots.

Its Abbotsford, B.C., property, meanwhile, was purchased by Fort Garry Industries for $15.5 million.

Emails between the Monitor’s counsel and creditors outlined remaining options as: a Pride Group sale to its original owners as a going concern; a wind-up managed by a single entity (turnaround and restructuring firm Hilco Global has been approached); or the taking back of collateral by individual lenders, which the Monitor maintains could be chaotic and difficult to orchestrate in an orderly manner.

“At this stage, the Monitor continues to be focused on the going concern sale,” legal counsel Chris Burr said in an email to creditors, adding it would request the court stand down on all PGL matters – including the lift stay motions – for several weeks “so that parties can assess the alternatives on a reasonable timeline.”