Ontario · Foreign recognition (CCAA)
Application Record
Application / notice of application · 9 March 2021
AI summary
A plain-English summary drawn only from this filing: what it is, why it matters, and the parties, amounts and dates it turns on.
What we verified from this filing17 verified
- applicantKNOTEL CANADA, INC.
- commencement date9 March 2021
- courtSUPERIOR COURT OF JUSTICE (COMMERCIAL LIST)
- court file noCV-21-00658434-00CL
- proceeding typerecognition_ccaa
- statutory basisSECTION 46 OF THE COMPANIES' CREDITORS ARRANGEMENT ACT, R.S.C. 1985, c. C-36, AS AMENDED
- statutory basisSECTION 46 OF THE COMPANIES’ CREDITORS ARRANGEMENT ACT, R.S.C. 1985, c. C-36, AS AMENDED
- secured creditorsnote: Outstanding principal stated as US$50,000,000 as of the Petition Date. Held by Digiatech by assignment. Knotel Canada has not granted security under this indebtedness. · page: 26 · as of: Petition Date (January 31, 2021) · amount: 50000000 · debtor: Knotel, Inc. (Original Debtors); Knotel Canada is not an obligor · creditor: Digiatech, LLC (TPC Loan — junior revolving credit facility, second lien) · currency: USD · security: Secured by substantially all of the Original Debtors' assets, including all personal property; junior to the Bridge Bank Facility. Initial revolving line up to US$50,000,000 plus two conditional tranches of up to US$25,000,000 each (facility limits, not balances); interest 6.0% plus the greater of 5.25% or prime
- secured creditorsnote: Approximate outstanding balance of US$18,550,000, plus US$2,000,000 in cash-collateralized letters of credit (not included in amount). Held by Digiatech by assignment. Knotel Canada has not granted security under this indebtedness. · page: 26 · as of: Petition Date (January 31, 2021) · amount: 18550000 · debtor: Knotel, Inc. (Original Debtors); Knotel Canada is not an obligor · creditor: Digiatech, LLC (Bridge Bank Facility — senior revolving credit facility, first lien) · currency: USD · security: Perfected first-priority lien on all of the Original Debtors' personal property, with limited exceptions. Revolving line of up to US$30,000,000 (facility limit, not balance); 16.5% per annum
- unsecured creditorsnote: Stated as the amount of the notes; all principal and accrued interest remains outstanding and is due and payable on demand (maturity date was December 31, 2020). No as-of date for the balance is given. · page: 27 · basis: Unsecured notes issued July 2020; 4% per annum · amount: 20461714 · debtor: Knotel, Inc. · creditor: Holders of 2020 Convertible Notes · currency: USD
- unsecured creditorsnote: Amount is the ORIGINAL principal amount, not a current balance; as-of date is the note date. Regulatory/government-program loan. · page: 27 · as of: 2020-04-10 · basis: Unsecured, forgivable Paycheck Protection Program loan under note dated April 10, 2020; interest 0.98% per annum · amount: 7157612 · debtor: Knotel, Inc. · creditor: U.S. Small Business Administration (PPP Loan) · currency: USD
- unsecured creditorsnote: Stated as the amount of the notes; all outstanding principal and accrued interest remains outstanding and is subject to conversion on demand made on or after June 30, 2021. No as-of date for the balance is given. · page: 27 · basis: Unsecured notes issued November 2019; 4% per annum · amount: 9559424 · debtor: Knotel, Inc. · creditor: Holders of 2019 Convertible Notes · currency: USD
- secured creditorsnote: Related party (parent). Approximately CDN$281,000 borrowed under the Promissory Note, funded from the DIP Financing approved by the U.S. Court. Separately, the affidavit states the total unsecured amount outstanding from Knotel Canada to Knotel Parent was US$2,636,430.90 as of February 28, 2021 (see unsecured entry). · page: 28 · as of: date of the affidavit (March 8, 2021) · amount: 281000 · debtor: Knotel Canada, Inc. · creditor: Knotel, Inc. (Knotel Parent) — secured intercompany creditor of Knotel Canada · currency: CAD · security: General security agreement dated March 2, 2021 over all present and after-acquired personal property, assets and undertaking of Knotel Canada, and proceeds; secures a demand promissory grid note dated March 2, 2021
- unsecured creditorsnote: Related party (parent). Historical intercompany funding of Knotel Canada's operations. Distinct from the secured CDN$281,000 under the Promissory Note/GSA dated March 2, 2021. · page: 28 · as of: 2021-02-28 · basis: Affidavit of John M. Jureller: total unsecured amount outstanding from Knotel Canada to Knotel Parent as of February 28, 2021 · amount: 2636430.9 · debtor: Knotel Canada, Inc. · creditor: Knotel, Inc. (Knotel Parent) — unsecured intercompany advances to Knotel Canada · currency: USD
- unsecured creditorsnote: Estimate. Individual landlord default notices: 121 King Street West Ltd. alleged arrears $209,830.48 (demand by March 10, 2021); Crestpoint Real Estate (215 Spadina) Inc. alleged arrears $236,902.44 (demand by March 14, 2021); currency of those figures not stated (presumably CAD). Leases at 15 Toronto Street and 720 King Street West were terminated pre-filing; landlord of 720 King Street West has sued for unpaid rent. Knotel Parent is a limited indemnitor on each lease. · page: 30 · as of: 2021-02-28 · basis: Canadian Filing Entities' own estimate of unpaid rent obligations of approximately US$1.7 million · amount: 1700000 · debtor: Knotel Canada, Inc. and Knotel Parent (Canadian Filing Entities) · creditor: Landlords under the Knotel Canada Leases (aggregate estimate of unpaid rent) · currency: USD
- unsecured creditorsnote: Estimate of approximately US$1.3 million; no individual creditors named; no as-of date stated. · page: 30 · basis: Knotel Canada's estimate of ordinary course trade debt (contractors, suppliers, caterers and other service providers) · amount: 1300000 · debtor: Knotel Canada, Inc. · creditor: Trade creditors of Knotel Canada (aggregate estimate) · currency: USD
- financial positionnote: Only a range estimate is given, so totals are null. Knotel Canada's petition and affidavit pages provided do not state its assets or liabilities beyond the line items listed in the creditor entries. · page: 92 · basis: Knotel, Inc. voluntary petition (Official Form 201), Debtor's own estimate by range: estimated assets and liabilities each "$1,000,000,001-$10 billion"; after administrative expenses are paid, "no funds will be available for distribution to unsecured creditors"; estimated 200-999 creditors · scope: Knotel, Inc. only (Knotel Parent petition); no point figures stated on the pages provided. The balance sheet for Knotel Canada is Exhibit I (unaudited, internally prepared) but its figures are not on the pages provided. · currency: USD