MONTREAL — Insolvent beverage retailer DavidsTea Inc. says it will ask its creditors to approve a plan of arrangement next month to distribute about $18 million to creditors in Canada and the U.S.
A meeting will be held June 11 where a majority of shareholders in both countries voting separately must approve the plan. The votes cast must represent at least two-thirds of the dollar value of claims in each country.
DavidsTea filed for creditor protection under the Companies' Creditors Arrangement Act on July 8.
It owes $15.3 million to creditors in Canada and the equivalent of about $3.1 million to those of its U.S. wholly owned subsidiary, according to monitor PwC Canada.
The largest claim for $1.46 million comes from Canada Revenue Agency. It also owes $741,100 to Florapharm Tea USA LP, $643,700 to Wiptec, $594,200 to AIYA America, and $436,000 for former CEO Joel Silver.
The Montreal-based company says the plan is the "full and final settlement of all claims."
“The plan of arrangement results from extensive discussions with our creditors. We thank them for their understanding, co-operation and patience and look forward to completing the CCAA process following the creditors’ meeting on June 11,” stated company chairman and founder Herschel Segal.
DavidsTea says it lost $55.9 million last year and sales plunged 38 per cent as it felt the effects of lockdowns and it exited its entire retail network except 18 Canadian stores.
This report by The Canadian Press was first published May 4, 2021.
The Canadian Press
