BlackSquare: the stake the receiver was ready to abandon

Appended to the report Grant Thornton Limited filed on July 20, 2026 was a notice, effective that day, by which the receiver of BlackSquare Inc. abandoned, renounced and disclaimed every interest the company had or might have in 356,990 shares of common stock in a Delaware company called Folly Enterprises Inc. Those shares were, on the receiver's own account, BlackSquare's primary asset — roughly 15% of Folly's issued and outstanding stock. Nobody would buy them on terms the receiver could accept, so it proposed to give them up and close the file, per Receiver's First and Final Report, July 20, 2026, paras. 13, 20 and Appendix B.

The arithmetic is on one page of the same report. The estate held $2,131. Unpaid fees of the receiver and its counsel stood at $116,779 inclusive of GST, with a further $18,375 estimated to finish the administration — $135,154 in all, which BDC Capital Inc. had agreed to advance by way of a receiver's certificate so that the receivership could pay for its own conclusion. BDC was owed $3,021,297.80 as at March 6, 2026, and the receiver recorded that no realizations had been generated for the estate, per Receiver's First and Final Report, July 20, 2026, paras. 3, 28, 34–35, 38.

Then a buyer appeared, and it was the issuer. On August 5, 2026 the receiver and Folly Enterprises Inc. signed an agreement of purchase and sale for the shares; the receiver supplemented its report on August 17 and filed an amended application the same day; and on August 26, 2026 Justice L.K. Harris approved the transaction and discharged the receiver in a single attendance, sitting at Edmonton on a Calgary file, per Approval and Vesting Order, Aug. 26, 2026, preamble and para. 3 and Discharge Order, Aug. 26, 2026, preamble.

Wine ecommerce services

The receiver's s. 245 statement gives BlackSquare's principal line of business in three words — wine ecommerce services — per Notice and Statement of the Receiver, Mar. 26, 2026, p. 2. The affidavit sworn in support of the appointment puts the business and its ending in two sentences: BlackSquare "previously operated in the wine industry, where it developed and sold a software which assisted with the interjurisdictional trade of wine," and, "[l]argely due to the imposition of tariffs, among other factors, BlackSquare's business model was no longer viable and BlackSquare ceased operations on or about July, 2025," per Affidavit of Louis-David Julien, sworn Mar. 12, 2026, para. 6. That account is the lender's: Louis-David Julien, who swore it, is an Assistant Vice President, Portfolio Management, Growth and Transition Capital with BDC Capital Inc., a wholly owned subsidiary of the Business Development Bank of Canada, per the same affidavit at paras. 1–2.

Nine years, twenty-one amendments

BDC lent under two letters of offer, one dated July 14, 2017 and one dated August 16, 2019, secured by a general security agreement dated August 28, 2017 over all present and after-acquired personal property. Between January 10, 2020 and December 4, 2025 those letters were amended, "among others," twenty-one times, per Affidavit of Louis-David Julien, sworn Mar. 12, 2026, paras. 3, 11–12.

One of the twenty-one is a document worth reading in full. The tolerance letter of July 17, 2024, exhibited to the affidavit, forgives three separate defaults and re-prices the loans around them. BlackSquare had failed to deliver its year-end review engagement financial statements for 2023; it had failed, through fiscal 2023, to make source deduction payments, leaving it "in Arrears with source deductions to CRA by approximately $1,600,000" as of June 2024; and on January 1, 2020 it had amalgamated without the consent its negative covenants required. BDC tolerated all three on conditions, including a board resolution acknowledging BDC's right to force any such amalgamation to be undone, and the right, at BDC's sole discretion, to place a general security agreement on whichever entity ended up holding the Folly investment, per Affidavit of Louis-David Julien, sworn Mar. 12, 2026, Exhibit A, tolerance letter dated July 17, 2024, pp. 1–3.

What BDC gave in return was time and, for a while, free money. Effective July 14, 2024 the interest rate on both facilities was "adjusted to 0.00%"; interest was postponed for seven months to February 13, 2025; maturity on both was reset to March 14, 2025. And because the assignment and subordination agreements permitted insider interest only while BDC was unpaid, the letter gave notice that interest payments to Gerry Protti, Matthew Protti, Gail Protti and 2Lines Software Inc., and Patrick Meneley "are no longer permitted until BDC Capital has been repaid in full," per the same letter at pp. 3, 6–7.

The letter did one more thing, and it shaped the claim BDC eventually filed. Its compensation on these facilities included a Bonus Equity — a percentage of the borrower's consolidated enterprise value, payable on a maturity, a default, a change of control or a listing. The tolerance letter converted that contingent share of upside into a floor: the greater of a formula, or "[t]he amount due as of June 18, 2024" of $519,000 on one facility and $322,000 on the other, per the same letter at pp. 5, 8. Twenty months later those two figures had not moved. Of the $3,021,297.80 BDC claimed as at March 6, 2026, $1,750,000 was principal, $425,657.80 interest and $4,640 fees — and $841,000 was Bonus Equity, a claim on the value of an enterprise that had stopped operating eight months earlier, per Affidavit of Louis-David Julien, sworn Mar. 12, 2026, para. 8.

The stake, sold down before anyone filed

BlackSquare's main asset had once been a 50% interest in the Folly entities. In January 2025 the two agreed a payment plan under which those interests would be sold in two tranches, documented in an amending agreement dated June 26, 2025; the first tranche closed on or about April 26, 2025. What was left — the "Remaining Folly Equity Interests" — was 15%, and multiple parties had, on BDC's information, expressed interest in buying it, per Affidavit of Louis-David Julien, sworn Mar. 12, 2026, paras. 14–17. That sale was made to Digital Beverage Group, Inc. under a stock purchase agreement dated June 30, 2025 and carried earn-outs on Folly's revenue growth against 2024; the receiver reviewed Folly's statements for the year ended December 31, 2025 and "determined there is no future benefit to the estate," per Receiver's First and Final Report, July 20, 2026, paras. 21–24.

Demand came on March 9, 2026 — a letter from MLT Aikins and a notice of intention to enforce security under s. 244 of the BIA, requiring payment by 5:00 p.m. Calgary time on March 19. Julien swore his affidavit three days later, on March 12, and BlackSquare's director Matthew Protti signed the company's consent on March 13, before the demand's own deadline had run, per Affidavit of Louis-David Julien, sworn Mar. 12, 2026, paras. 19–20 and Exhibit E and Consent Receivership Order, Mar. 23, 2026, pp. 14–15. On March 23, 2026, on the application of BDC filed a week earlier, Justice Colin C.J. Feasby appointed Grant Thornton Limited receiver of all of BlackSquare's assets under s. 243(1) of the BIA and s. 13(2) of Alberta's Judicature Act, with a Receiver's Charge of up to $250,000 ranking ahead of everything but the BIA's own priorities, and a Receiver's Borrowings Charge of up to $250,000 ranking behind it, per Consent Receivership Order, Mar. 23, 2026, paras. 2, 18, 21. Fourteen days had passed between the demand letter and the appointment.