Insolvent beverage company DavidsTea Inc. says creditors have approved its plan of arrangement to distribute about $18 million to them in Canada and the U.S.
A meeting held Friday saw a majority of shareholders in separate votes in both countries approve the plan. The votes cast represented at least two-thirds of the dollar value of claims in each country.
The Montreal-based company says it will seek a sanction order from the Quebec Superior Court on Wednesday, followed a day later by recognition of the order from the United States Bankruptcy Court for the District of Delaware under Chapter 15 of the United States Bankruptcy Code.
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 company 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.
“We are very pleased that the CCAA process is nearing completion and again express our appreciation to our creditors for their understanding,” stated chairman and founder Herschel Segal.