North Mill Equipment Finance is set to acquire Pawnee Leasing Corporation and its affiliated company, Tandem Finance Inc., in a reverse vesting transaction, according to a court filing submitted in the Ontario Superior Court of Justice.
The acquisition is part of the ongoing restructuring of Chesswood Group Limited, the parent company of Pawnee Leasing Corporation, under the companies’ Creditors Arrangement Act (CCAA). Court documents indicate that North Mill emerged as the top bidder in a competitive sale and investment solicitation process (SISP) that attracted multiple interested parties. The proposed transaction is expected to provide the best financial outcome for stakeholders.
North Mill, based in Norwalk, CT, has entered into a share purchase agreement with Chesswood’s Pawnee Vendor, which oversees the operations of Pawnee Leasing and Tandem Finance. The deal, which is subject to court approval, will see North Mill acquire all issued and outstanding shares of the two companies, allowing it to expand its footprint in the U.S. equipment financing sector.
The reverse vesting structure, as outlined in the court filing, will facilitate a smoother transition by transferring certain liabilities to a newly formed entity known as Residual Co., which will remain within the CCAA proceedings. The filing also states that proceeds from the sale will be allocated toward repayment of Chesswood’s debtor-in-possession (DIP) financing obligations.
FTI Consulting Canada Inc., which has been appointed as the court monitor overseeing the Chesswood restructuring, endorsed North Mill’s bid as the highest and best offer available. “The consideration payable under the Proposed Pawnee Transaction represents a greater recovery than could be achieved in a bankruptcy scenario,” the monitor stated in its report to the court.
The transaction requires approval from both the Ontario Superior Court of Justice and a U.S. Bankruptcy Court under Chapter 15 proceedings. Court approval in Canada is expected on March 7, 2025, while the U.S. court hearing is scheduled for later in March. The deal is anticipated to close by April 18, 2025, barring any unexpected legal or financial hurdles.
Pawnee Leasing Corporation, headquartered in Fort Collins, CO, specializes in small-ticket equipment leasing for businesses across a broad credit spectrum. Tandem Finance, which previously operated as an independent division of Pawnee, ceased originations and was absorbed into Pawnee’s servicing operations in recent months.
The acquisition marks a significant development in Chesswood’s restructuring process, which began in October 2024 after the company encountered financial distress due to liquidity constraints and defaults under its existing credit agreements. The court filings suggest that no alternative transaction would provide a better outcome for creditors, reinforcing the urgency of proceeding with North Mill’s offer.
As the approval process unfolds, stakeholders, including lenders and Chesswood’s unsecured creditors, will be closely monitoring developments to determine the full financial impact of the transaction.
This is a developing story. Updates will be provided as new information emerges.
