On September 26, 2024, the Ontario Superior Court of Justice approved the sale of Pride Group Logistics, the trucking division of Pride Group Entities, currently under creditor protection under the Companies’ Creditors Arrangement Act (CCAA), back to its founding family, the Johals.
This $56 million transaction has faced significant opposition from creditors and industry stakeholders. It’s worth noting that when Pride Group sought creditor protection, it was dealing with approximately $1.6 billion in debt and obligations. With over 20 creditors involved, this vast debt created additional friction during the sale process, especially given that the final sale price seems quite small in comparison.
Despite this, Judge Peter Osborne ruled that the sale, supported by bankruptcy monitor Ernst & Young, was the best outcome. He argued that a liquidation would have been costly, complicated, and would have led to significant job losses within the company.
Osborne acknowledged that, while not flawless, this transaction was the only viable option to preserve operations and avoid the chaotic financial consequences of shutting down the business. The Johal family’s offer was deemed far superior to the other two bids, neither of which included provisions to keep the business running.
The judge’s stance on the matter appeared somewhat ambiguous. He recognized that creditors such as Challenger Motor Freight raised concerns about whether Pride Group was a “bona fide” carrier. Although Osborne dismissed this claim, he did acknowledge the strong emotions and conflicts of interest present in the case, particularly surrounding the Johal family’s involvement. These factors may raise some doubts about the decision’s integrity, as the judge seemed aware of the personal tensions but downplayed them in his final ruling.
Creditors voiced their objections even before the bankruptcy monitor’s recovery analysis was presented. Osborne pointed out that much of the opposition was likely driven by the fact that the offer came from the Johal family, despite the monitor’s assessment showing that this deal would yield better returns for creditors.
Ultimately, the sale was approved, with the transaction expected to close on October 16, though extensions may still occur.
