ACE Aviation Holdings Inc. (ACE) announced today its results for the third quarter of 2017, provided an update with respect to its liquidation process and announced its intention to seek Court approval for a final distribution to its shareholders and its dissolution.
2017 Third Quarter Results
In the third quarter of 2017, ACE recorded an increase in net assets in liquidation of approximately $20,000 as a result of interest income earned during the quarter.
As at September 30, 2017, ACE’s only remaining assets consisted of cash in an aggregate amount of approximately $6.5 million.
On June 28, 2012, further to the approval by ACE shareholders on April 25, 2012 of a special resolution providing for the voluntary liquidation of ACE, the Superior Court of Québec (Commercial Division) (the “Court“) issued an order appointing Ernst & Young Inc. as liquidator of ACE (the “Liquidator“).
Pursuant to an order issued by the Court on February 25, 2013, the Liquidator established a process for the identification, resolution and barring of claims and other contingent liabilities against ACE. Creditors had until May 13, 2013 to file their proof of claims, failing which their claims would be barred and extinguished.
The interim consolidated financial statements of ACE for the third quarter ended September 30, 2017 and the related management’s discussion and analysis include a description of proofs of claim which were filed and the status thereof. All of the remaining contingent obligations which were the object of proofs of claims filed in connection with such claims process have expired at the beginning of 2016.
As indicated in its audited annual financial statements for the year ended December 31, 2016 and subsequent interim financial statements, ACE had claimed a refund from the Canada Revenue Agency (“CRA“) and Revenu Québec further to the expiration of a statute of limitation for reassessment of the income of an operating partnership in which ACE previously had an interest. The Liquidator had indicated in such financial statements that it would not dissolve until it had collected or otherwise settled such refund.
In October 2017, the Liquidator received aggregate refunds in the amount of approximately $483,000 from the CRA and Revenu Québec.
Final Distribution to Shareholders and Dissolution
The Liquidator intends to seek Court approval of its final accounts, approval to proceed with a final distribution to the shareholders of ACE and approval of the dissolution of ACE. An estimate of the final amount to be distributed will be provided in the Liquidator’s Application for Court approval and will represent all of the remaining cash of ACE less accounts payable and a reserve to cover the remaining fees and expenses of the liquidation and dissolution and remaining contingencies.
The Liquidator currently expects that the Court hearing will be held in January 2018. The Liquidator will post a copy of the relevant application to the Court and notice of the hearing date on its website at www.ey.com/ca/aceaviation at least 7 days in advance of the hearing date. Shareholders and other parties who have questions or require additional information with respect to ACE and the final distribution and dissolution process may contact the Liquidator by telephone (1-855-279-8388 or 416-943-4444) or by fax (1-416-943-3300).
The amount of the final distribution will remain subject to modification until the final amount of the distribution is announced following receipt of Court approval. The record date and payment date for such distribution would be announced by subsequent press release upon receipt of approval from the Court. Subject to receipt of the Court approval, the Liquidator currently expects to proceed with the dissolution of ACE shortly following the payment of the final distribution to the shareholders.
The final distribution to shareholders, the cancellation of the shares of ACE and the dissolution of ACE will not occur until all necessary corporate, administrative and tax measures to dissolve ACE are completed and until the settlement of any remaining contingencies that may arise in connection with the remaining liquidation and dissolution steps of ACE. There is no certainty as to the timing or amount of such final distribution and dissolution. ACE will continue to incur operating costs and fees for the duration of the dissolution process.
The distributions to shareholders of ACE will generally be treated as deemed dividends from a Canadian tax standpoint. Such deemed dividends will be designated as eligible dividends for the purposes of the Income Tax Act (Canada).
For additional information with respect to the liquidation of ACE, refer to the management proxy circular dated March 9, 2012, the interim consolidated financial statements and related management’s discussion and analysis for the third quarter ended September 30, 2017 and the other public filings of ACE which are available at www.sedar.com and www.aceaviation.com.