LoyaltyOne, Co. and a related entity (“LoyaltyOne”) operated the marketing program known as the AIR MILES® Reward Program. Over 10 million Canadians participate in the AIR MILES® Reward Program.
As of March 2023, LoyaltyOne owed approximately $900 million to its lenders. Bank of Montreal (“BMO”) was LoyaltyOne’s most significant partner. In 2022, BMO accounted for approximately 50% of all reward miles issued by LoyaltyOne.
In March 2023, LoyaltyOne commenced proceedings under the CCAA and KSV was appointed CCAA Monitor. Shortly thereafter, the Court approved a “stalking horse” sale process, whereby BMO acted as the stalking horse. The purchase price under the stalking horse transaction was US$160 million.
In June 2023, LoyaltyOne completed a transaction with BMO to sell the business and preserve going-concern operations.
As Monitor, KSV was given enhanced powers by Court Order to realize on LoyaltyOne’s assets excluded from the BMO transaction, including certain litigation assets. In this regard, the Monitor is pursuing a $200 million tax refund from Canada Revenue Agency that is subject to complex tax litigation.