Proactive Investors - Cannabis company MedMen Enterprises Inc (CSE:MMEN, OTCQX:MMNFF) announced late on Friday that it entered bankruptcy proceedings in Canada with about C$561.5 million in liabilities.
Additionally, it said its wholly-owned California-based subsidiary MM CAN USA has been placed into receivership in the Los Angeles Superior Court, Santa Monica Division, meaning the company has effectively been ordered to liquidate its California assets.
The company expects that ancillary receivership proceedings will follow in the other states where MedMen’s subsidiaries operate, resulting in these subsidiaries being dissolved or liquidated.
“The difficult decision to shut down operations and commence the Bankruptcy Proceedings and Receivership Proceedings was made after careful consideration of the current financial condition of the company and its subsidiaries, their inability to pay their liabilities as they become due and the anticipated enforcement actions of secured creditors,” the company said in a statement.
“After careful consideration of these factors and in the absence of other available alternatives, the board of directors of the company determined that it was in the best interests of the company to proceed with the commencement of the Bankruptcy Proceedings and Receivership Proceedings.”
The company has appointed B. Riley Farber as its bankruptcy trustee, with the first meeting of bankruptcy creditors to be held via video conference on May 14.
Trading of the company’s shares on the Canadian Securities Exchange has been suspended. The company expects that it will ultimately be delisted.
MedMen at its peak operated via its subsidiaries in California, Nevada, Illinois, Massachusetts and New York and was known for its MedMen and LuxLyte brands.
Following a sell-off of assets, the company in January was downgraded by the OTC Marketplace and it reached a value of zero, down from an approximately $3 billion valuation in 2018.