Sonar successfuls bids in the Tricon sale solicitation process

Tricon Films and Television was a Canadian producer and distributor of film and television titles with a library of approximately 260 titles, many in the family and children space. Tricon ran into financial difficulty and commenced CCAA proceedings with aggregate outstanding indebtedness of roughly $30 million. Among Tricon’s principal assets, in addition to its library of film and television titles, were material Canadian Film and Video Tax Credits receivable. Such tax credits are subject to strict eligibility criteria and must be carefully preserved. The purpose of the CCAA proceedings was to wind down the Tricon business and explore options for the sale or other realization of Tricon’s property (for the primary benefit of the principal secured creditor, SunTrust), in a manner that maximized value and preserved the tax credits receivable. Our department represented Sonar as the successful bidder in the Tricon sale solicitation process. In that capacity we advised Sonar in all aspects of bid submission, structuring, negotiation and completion of a transaction involving the Tricon film and television library. The structuring and transaction negotiation was critical as it required careful and novel planning to ensure preservation of the value of the tax credits while ensuring that Sonar could take the full benefit of the film and television library and related assets.