Endo Networks: OSL bought the bank's loan, and the creditors voted 18 to 0

Endo Networks Inc. was incorporated in Ontario on January 30, 2001, and by this spring it was a sales and marketing agency working out of leased premises at 164 Trafalgar Road in Oakville, with approximately 55 employees and 13 independent contractors, per the First Report of the Proposal Trustee, Aug. 12, 2026, paras. 10–11. Business-directory profiles of the company describe customer-acquisition programs run face to face, through contact centres and online. What it owned, as the proposal trustee counted it in June, was $166,164 in a Royal Bank account, $6,497 in petty cash, about $553,000 in receivables of which management thought about $130,000 collectible, office computers, printers, a television monitor, some event equipment, and a black 2018 Dodge Ram pickup the company used to carry supplies and employees to and from event venues, per the Trustee's Report on Proposal, June 23, 2026, pp. 4–5.

Revenue, unaudited, fell from $7,250,000 in fiscal 2023 to $6,725,000 in 2024 and $5,084,000 in 2025. Management cut operating expenses from approximately $2.8 million to $2.2 million, and the company went from net income of about $459,000 to a loss of about $212,000 and back to net income of about $167,000, but the trustee reports that the cuts were insufficient to offset the liquidity effect of the falling revenue, per the First Report of the Proposal Trustee, Aug. 12, 2026, paras. 12–13. On May 13, 2026, Endo filed a notice of intention to make a proposal under s. 50.4(1) of the BIA, with Albert Gelman Inc. as proposal trustee.

On August 21, Justice Koehnen of the Ontario Superior Court of Justice (Commercial List) approved the proposal that came out of the filing, funded by a company that has conditionally agreed to take 75% of Endo's shares. "There is no opposition to the Proposal," the endorsement records, per the Endorsement of Koehnen J., Aug. 21, 2026, paras. 1, 4.

Two customer relationships, in management's account

The causes are management's, relayed by the trustee, and date from fiscal 2024. First, the company was the victim of an alleged fraud that cost it several hundred thousand dollars and, according to management, contributed to the loss of a customer relationship worth approximately $3 million a year in revenue; new customers replaced part of it. Second, a new relationship with President's Choice Bank, expected to contribute to growth, deteriorated into a dispute, the termination of the program and litigation, per the First Report of the Proposal Trustee, Aug. 12, 2026, paras. 14–17. PC Bank issued a statement of claim on February 16, 2026 seeking $1,344,617 in damages under the parties' master services agreement. Endo filed a defence on April 24 denying any entitlement, and documentary discovery had not started when the company filed its notice of intention, per the First Report of the Proposal Trustee, Aug. 12, 2026, paras. 21–22.

The trustee's June report named the principal arm's-length creditors: the Canada Revenue Agency for approximately $1.1 million in unremitted HST, Willsee Holdings Ltd. for approximately $1.3 million, and The Bank of Nova Scotia for approximately $683,000, most of it a $600,000 HASCAP loan. BNS held the only registration under the PPSA, a general security agreement, and the company valued its secured claim at $65,000 for the purposes of the proposal. The statement of affairs lists 44 arm's-length unsecured creditors at $4,101,344 and five non-arm's-length creditors at $1,853,894, among them the president and sole director, Peter Day, for about $1.2 million in shareholder advances, per the Trustee's Report on Proposal, June 23, 2026, pp. 1, 5–6.

OSL and the first offer

The money came from OSL Retail Services Inc., which the trustee describes as arm's length and in a business complementary to Endo's. The two reached a conditional agreement for OSL to acquire a 75% equity interest, conditional on approval of the proposal; OSL funds the proposal, and Mr. Day and the current employees and contractors are expected to stay, per the First Report of the Proposal Trustee, Aug. 12, 2026, paras. 24–25. OSL also executed a guarantee in favour of the trustee to secure its obligations, per the Trustee's Report on Proposal, June 23, 2026, p. 3.

The initial proposal, filed June 12, had OSL pay BNS $65,000 within 30 days of court approval in satisfaction of its secured claim, take an assignment of the bank's claim and security, and then assert an unsecured claim for the balance. OSL would also pay $300,000 into a proposal fund, from which the trustee would take its fees and disbursements, pay preferred creditors in full (it knew of none) and distribute what remained pro rata to unsecured creditors with proven claims, per the Trustee's Report on Proposal, June 23, 2026, pp. 3–4. The proposal fixes the trustee's fee at $60,000 plus HST and lets the trustee collect anything above that from the company outside the proposal, per the Amended Proposal, July 17, 2026, s. 1(n).

The trustee's case for acceptance was its liquidation analysis. In a bankruptcy it put gross realizations at $276,963; took off $136,000 for potential priority wage claims, a provision of $2,000 for each of 68 employees, and $84,750 in professional costs; and arrived at $56,213 available against $683,083 owed to BNS, a shortfall of $626,870 and no distribution to unsecured creditors, per the Trustee's Report on Proposal, June 23, 2026, pp. 7–8.

Two weeks for the bank

The meeting of creditors, held by videoconference on July 3, did not reach a vote. BNS was the only eligible voting creditor present. Its counsel, Dan Reason of Harrison Pensa LLP, told the meeting that the bank, its lawyers and its financial adviser, MNP, needed more time to consider the proposal and to meet with the company and OSL "regarding the difference between BNS's assessment of the value of its security and the Company's assessment," per the First Report of the Proposal Trustee, Aug. 12, 2026, App. E, pp. 1–2. On his motion, carried in both classes, the meeting was adjourned to July 17. A representative of President's Choice Bank asked at the same meeting about the proof of claim it had submitted, and the chair said the claim was contingent and had not been proven for voting purposes.

The negotiation that followed was about the bank's position, and it ended with OSL buying it. Under an Assignment of Debt and Security Agreement dated July 16, 2026, BNS assigned the loan and its general security agreement to OSL for $150,000, making OSL the company's primary secured creditor, per the First Report of the Proposal Trustee, Aug. 12, 2026, paras. 19, 29–30. The amended proposal filed the next day left that secured claim unaffected. Endo relinquished its interest in the vehicle securing BNS's separate vehicle loan, with any shortfall on the bank's sale to rank as an unsecured claim, and for every other creditor the $300,000 fund and its order of payment stayed as they were, per the First Report of the Proposal Trustee, Aug. 12, 2026, paras. 31–33.

Eighteen for, none against

When the meeting reconvened on July 17, PC Bank's counsel asked for another adjournment so the trustee could review and value its claim. The other participants opposed it, and the meeting went on. The trustee, as proxy for the creditor Smart Circle International LP, moved the vote, seconded by Mr. Reason as proxy for BNS, per the First Report of the Proposal Trustee, Aug. 12, 2026, App. G, p. 2. Eighteen creditors holding $2,560,506 in claims voted for the amended proposal and none voted against. PC Bank, whose contingent claim was filed on the eve of the first meeting and had not been determined, abstained, per the First Report of the Proposal Trustee, Aug. 12, 2026, paras. 38–39.