Perpetual Energy Inc. received the Alberta Court of Appeal's judgment (the “Court of Appeal Judgment”) with respect to the appeals heard by the Court of Appeal on December 10, 2020 relating to the sale by Perpetual of legacy shallow gas properties in October 2016 to an arm's length third party purchaser after an extensive and lengthy marketing, due diligence and negotiation process (the “Sequoia Disposition”).
The Court of Appeal Judgment dismissed the appeal filed by Perpetual and granted certain aspects of the appeals filed by PricewaterhouseCoopers Inc. LIT (“PwC”), in its capacity as trustee in bankruptcy of Sequoia Resources Corp. (“Sequoia”), with respect to the Alberta Court of Queen’s Bench judgments of August 15, 2019 and August 26, 2020 pertaining to the Sequoia Disposition.
As previously disclosed, on January 14, 2021, the Court of Queen’s Bench released its decision with respect to Perpetual’s application to strike and summarily dismiss the claim brought under Section 96 of the Bankruptcy and Insolvency Act (the “BIA Claim”) finding that PwC could not establish a necessary element of the BIA Claim as Sequoia was not insolvent at the time of, nor rendered insolvent by, the Sequoia Disposition. The Court of Queen’s Bench therefore concluded there is “no merit” to the BIA Claim and it was summarily dismissed. On January 21, 2021, PwC filed a notice of appeal of this judgment to the Court of Appeal.
Perpetual continues to believe that all of the outstanding claims brought by PwC in relation to the Sequoia Disposition are completely opportunistic and entirely without merit and it will continue to vigorously defend itself against them. The Company remains highly confident that it will be completely successful in defending the outstanding aspects of PwC's claims.