DavidsTea Inc. creditors, including former employees, will split $18 million after the United States Bankruptcy Court for the District of Delaware recognized a Quebec court decision approving its plan of arrangement.
The Montreal-based company will provide PricewaterhouseCoopers, the court-appointed monitor, with the funds that will be distributed to creditors in Canada and the United States.
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 to a report PricewaterhouseCoopers.
The retailer filed for protection in July 2020 under the Companies’ Creditors Arrangement Act in Canada and Chapter 15 of the United States Bankruptcy Code.
It subsequently exited its entire retail network except 18 Canadian stores while also supplying more than 2,500 grocery stores and pharmacies.