Might it be closing time for one of B.C.’s highest-profile pub chains?
Freehouse Collective, better known as the Donnelly Group, is try to avoid that fate by filing for creditor protection.
The company revealed Wednesday it’s initiated proceedings under the Companies' Creditors Arrangement Act (CCAA) to revise the term of existing loans and restructure debt accrued during the pandemic. The Supreme Court of British Columbia granted an initial order and appointed a CCAA monitor.
“Despite the often-startling perception of this filing, it's very much a constructive versus destructive financial tool that will first bring added stability and then growth to our businesses operating in the embattled hospitality industry,” CEO Jeffrey Donnelly said in a statement.
The move for the pub chain comes months after Jeffrey Donnelly’s cannabis retailer, Lightbox Enterprises Ltd. which operated as Dutch Love, took similar action. Lightbox eventually sold some of its stores and intellectual property rights to a Calgary-based competitor as a result.
As was the case with Dutch Love, the Donnelly Group is blaming the COVID-19 pandemic and its economic impacts for the need for protection under the CCAA.
In the press release announcing the change, the company highlighted that the decision was not a reflection of the performance of its employees but the impacts the pandemic has had on the industry.
Donnelly Group will “collaborate closely with its lenders and professional advisors, including the court-appointed CCAA monitor, to complete its restructuring plan, streamline operations and communicate openly with all stakeholders,” said the press release. “It is optimistic it can complete this process in the next couple of months.”