DavidsTea’s foreign representative seeks closure of Chapter 15 case

By Sarah Lizee

Olympia, Wash., Oct. 6 – DavidsTea Inc.’s foreign representative, PricewaterhouseCoopers Inc., gave a final report on the company’s Chapter 15 case and is seeking entry of a final decree closing the case, according to court documents filed Wednesday with the U.S. Bankruptcy Court for the District of Delaware.

The company’s proceedings under Canada’s Companies’ Creditors Arrangement Act in the Superior Court of Quebec were terminated on Sept. 9, following implementation of the company’s plan of arrangement in June.

As previously reported, the plan provided for a total distribution to creditors of about C$18 million, comprised of three funds: a Canadian convenience class fund, a DavidsTea fund and a DavidsTea (USA) Inc. fund.

The plan divided unsecured creditors into those having claims against the DavidsTea and subsidiary DavidsTea (USA).

Unsecured creditors of DavidsTea who had a proven claim of up to C$1,800 were to be deemed to form the Canadian convenience class and were to receive a distribution equal to the lesser of C$1,800 and the amount of their claim.

The creditors who were not deemed to be part of the Canadian convenience class were to receive a distribution from the DavidsTea fund equal to 22.4% of their proven claim.

The distribution of the DavidsTea USA fund to creditors was to be an initial payment in an amount equal to the lesser of C$8,900 or the amount of the proven claim. They were also to receive a pro rata share of the balance of the amount that remained in the fund after making the initial payment.

The DavidsTea USA fund was established at C$1 million.

The plan did not affect employee priority claims, excluded claims, gift card claims, insured claims, post-filing trade payables, crown priority claims or secured claims.

A hearing is scheduled for Nov. 9.

DavidsTea is a tea company based in Montreal. The company filed bankruptcy on July 8, 2020 in the U.S. Bankruptcy Court for the District of Delaware under Chapter 15 case number 20-11802.

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