MONTREAL — DavidsTea Inc. has taken a step toward exiting insolvency after the Quebec Superior Court approved its plan to pay creditors $18 million.
The company said the U.S. Bankruptcy Court for the District of Delaware is expected to recognize that decision on Thursday.
Approvals would mean the Montreal-based company would exit court protection from creditors in both countries later this summer.
The plan of arrangement was approved by creditors of DavidsTea and its U.S. subsidiary on June 11 and calls for the distribution of the funds in mid-July as a full and final settlement of all claims against the company.
DavidsTea faced $118.2 million of claims from more than 1,500 creditors, with 60 per cent originating in Canada. The claims include $3.9 million from Canadian employees, according a report from court-appointed monitor PricewaterhouseCoopers.
CEO Sarah Segal says the insolvent retailer would emerge from creditor protection a "radically different organization" with a digital-first strategy after exiting its entire retail network except 18 Canadian stores while also supplying more than 2,500 grocery stores and pharmacies.
This report by The Canadian Press was first published June 16, 2021.
The Canadian Press