ALGARY, AB, March 25, 2022 /CNW/ – (TSX: PMT) – Perpetual Energy Inc. (“Perpetual” or the “Company”) today received the Alberta Court of Appeal (the “Court of Appeal”) judgment with respect to the appeal heard on February 10, 2022 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”).
As previously disclosed, on February 25, 2020, Perpetual filed an application to strike and summarily dismiss the claim brought under Section 96 of the Bankruptcy and Insolvency Act (the “BIA Claim”) by PricewaterhouseCoopers Inc. (“PwC”), in its capacity as trustee in bankruptcy of Sequoia Resources Corp. (“Sequoia”). On January 14, 2021, the Court of Queen’s Bench released its decision with respect to this summary dismissal application, 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 and the appeal was heard on February 10, 2022.
In today’s Memorandum of Judgment, the Court of Appeal allowed PwC’s appeal on the basis that the Court of Queen’s Bench erred in law in its handling of the end-of-life obligations and that based on the record, it could not be concluded the error was without consequence, and that the Court of Queen’s Bench also erred in agreeing to hear the second summary dismissal application. On this basis, the BIA Claim has been directed to trial.
Perpetual received the Statement of Claim in August 2018. As opposed to proceeding to a full trial at that time, Perpetual filed a Statement of Defence and Application for Summary Dismissal later in August 2018. All allegations made by PwC were denied and the summary dismissal application was made on the basis that there was no merit to any of the claims and that the claims constituted an abuse of process. Through various Court of Queen’s Bench proceedings, including a second summary dismissal application, as at January 14, 2021, all claims against the Company had been struck or summarily dismissed. Subsequently, through various Court of Appeal proceedings, certain aspects of the appeals filed by PwC have been granted by the Court of Appeal, with certain aspects of outstanding claims being directed to trial by the Court of Appeal, putting Perpetual in a similar situation as it was in August 2018.
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.
The Memorandum of Judgment of the Court of Appeal has been posted to the Company’s website at www.perpetualenergyinc.com or may be obtained by reviewing the public court documents that pertain to appeal number 2101-0021AC, as filed with the Court of Appeal.
Perpetual is an oil and natural gas exploration, production and marketing company headquartered in Calgary, Alberta. Perpetual owns a diversified asset portfolio, including liquids-rich conventional natural gas assets in the deep basin of West Central Alberta, heavy crude oil and shallow conventional natural gas in Eastern Alberta and undeveloped bitumen leases in Northern Alberta. Additional information on Perpetual can be accessed at www.sedar.com or from the Company’s website at www.perpetualenergyinc.com.