Galaxie Brands Corporation and 1000370759 Ontario Inc., CCAA

Galaxie Brands Corporation and 1000370759 Ontario Inc., Ontario-based companies in the cannabis packaging business, obtained CCAA protection on August 6 on application by The Vancor Group Inc. (“Vancor”).

Galaxie Brands is the licensed operating entity and is wholly owned by 1000370759 Ontario Inc. (“Equipment Co”), which also owns the equipment on which the business is reliant. 

Vancor is the largest creditor of Equipment Co., having invested over $2.7 million on an unsecured basis. Neither of the companies have any secured debt. In late 2023 / early 2024, Corry Van Iersel, the President and sole shareholder of Vancor, discovered various business decisions made by Kenneth Schaller, who worked as Galaxie Brands’ VP Operations. This discovery led to the commencement of oppression remedy litigation which resulted in Mr. Van Iersel being granted sole authority over the companies’ finances.

In June 2024, Vancor and the companies discussed a debtor-led CCAA filing but couldn’t reach an agreement on issues including governance, resulting in Vancor bringing the creditor-led application.

Galaxie Brands is operating at a loss and is insolvent, owing approximately $4.6 million in tax arrears to CRA. The purpose of the CCAA proceedings is to run a SISP with Vancor acting as stalking horse bidder.

KPMG is the monitor. Shawn Dym is the CRO.

Counsel is Miller Thomson for Vancor, Blakes for the monitor and MPG Law for Mr. Schaller.