Ontario Superior Court of Justice, Court File No.: CV-16-545118-00CP
This securities class action relates to Guestlogix Inc. publishing core documents (including MD&As and annual and interim financial statements), and making other statements containing material misrepresentations regarding various financial covenants attached to two different credit facilities.
Guestlogix entered into two separate credit facilities on December 23, 2013 and June 5, 2015. At no time did the Company ever disclose that there were financial covenants contained within these two credit facilities pertaining to trailing EBITDA or what the consequences were for breaching these covenants.
On November 12, 2015, Guestlogix announced that it was in default of two separate covenants pertaining to the two credit facilities. As a result of the breach, both credit facilities could become due on demand by the lender, the long-term subordinated term credit facility became reclassified to current, and the interest rate on the principal amount of that credit facility rose from 12% to 18%. Guestlogix remains in default of both credit facilities and has been negotiating forbearance agreements with the lenders since December 2015.
Furthermore, on December 16, 2015, Guestlogix announced that an internal review of its prior accounting practices and revenue recognition policies concluded that it may be required to restate its prior financial statements and that the preliminary review indicated that the restatement would be material.
Claim Issued: January 25, 2016
Class Periods: March 24, 2014 to and including November 12, 2015
Shareholders’ Counsel: Andrew Morganti and Eli Karp, Morganti Legal
Defendant Guestlogix and Patrick Leung’s Counsel: Kevin O’Brien, Osler Hoskin & Harcourt LLP
Defendant Brett Proud’s Counsel: Stockwoods LLP
For more information about this action, or to obtain a copy of the most recent statement of claim, please contact the Firm at email@example.com.