Fleets Coffee: the trucks are gone, and a 2020 cheque sits in trust

The Fleets Coffee trucks were five 2020 Freightliners, listed as coffee trucks and mobile cafés in Untether Capital Inc.'s statement of affairs of November 2024, per the Statement of Affairs of Untether Capital Inc., Nov. 26, 2024, pp. 1–2. The joint proposal that Capital and Untether Technologies Inc. put to creditors that month describes them as "specifically designed and outfitted to prepare and deliver a variety of coffee shop products in a spacious and comfortable mobile setting," per the Joint Proposal, Nov. 26, 2024, art. 4.1, p. 8. Selling them was to fund it: MNP Ltd., the proposal trustee, put their estimated value at approximately $1,950,000, per its Report of Trustee to the Creditors, Dec. 12, 2024, s. B(i), p. 2.

By early January 2026, MNP now reports, "it became clear the Companies could not complete a sale of the Trucks." On July 23, 2026 Untether Capital Inc. and Untether Technologies Inc. each made an assignment in bankruptcy, per the Trustee's Preliminary Report, Aug. 10, 2026, s. A, p. 1. The statement of affairs Capital's director swore the day before lists a single asset, $339,222.20 of cash, per the Statement of Affairs of Untether Capital Inc., sworn July 22, 2026, in Notice to Creditors, July 28, 2026, pp. 4–5, 9. MNP holds that money in trust. According to the trustee's report, it came from a cheque dated June 22, 2020, whose issuer told the proposal trustee that it had been issued to Capital in error, per the Trustee's Preliminary Report, Aug. 10, 2026, s. B, p. 2.

The official receiver appointed MNP Ltd. trustee of both estates: Technologies' bankruptcy took effect at 9:08 a.m. on July 23 (estate 31-3147139) and Capital's at 9:54 a.m. (estate 31-3147113), in the Toronto division, per the Certificate of Appointment (Untether Technologies Inc.), July 23, 2026 and the Certificate of Appointment (Untether Capital Inc.), July 23, 2026.

Coffee for commuters

The two companies were incorporated in August 2018 and developed software and mobile coffee trucks that served "niche customers" across the Greater Toronto Area and nearby cities, operating from leased premises in Vaughan under the Fleets Coffee brand, per the Trustee's Preliminary Report, Aug. 10, 2026, s. A, p. 1. The business, the proposal trustee wrote in December 2024, "was primarily designed to serve transit commuters, but the pandemic kept people at home for 2-3 years," per its Report of Trustee to the Creditors, Dec. 12, 2024, s. C, p. 4. The report lists other factors behind the group's difficulties: a struggle to fully replace the lost commuter revenue with catering and events, input costs, including labour and food, up 20% to 50% without a corresponding rise in prices, higher debt-servicing costs, a decline in corporate spending on events, and insufficient working capital. The internally prepared results it summarizes show sales of $766,791 and a net loss of $721,076 for the year ended September 2023, after sales of $598,900 and a net loss of $1,397,269 the year before, per the Report of Trustee to the Creditors, Dec. 12, 2024, s. C, pp. 3–4. Management's account in 2026 is shorter: the impact of COVID-19, rising costs and insufficient working capital, per the Trustee's Preliminary Report, Aug. 10, 2026, s. A, p. 1.

Capital had a lease agreement with Daimler Truck Financial Services Canada Corporation and Compass Equipment Finance Inc. in respect of the trucks. After a default under it, Capital entered into a forbearance agreement with Daimler on July 31, 2024, and on October 29, 2024 both companies filed notices of intention to make a proposal under section 50.4(1) of the Bankruptcy and Insolvency Act, with MNP as proposal trustee, per the Trustee's Preliminary Report, Aug. 10, 2026, s. A, p. 1.

A proposal built on five trucks

The joint proposal, lodged on November 26, 2024 and signed for both companies by Kirk Tobias, their sole director, was a liquidating one, per the Joint Proposal, Nov. 26, 2024, p. 15 and the Report of Trustee to the Creditors, Dec. 12, 2024, ss. A–B, p. 2. The proposal trustee's report said the companies had filed to allow "for the orderly liquidation and distribution of the net assets of the Company" and to maximize recovery "by offering a liquidating proposal." The fund was to be the net proceeds from selling the five Mobile Cafes, "having an estimated value totalling approximately $1,950,000," per the Report of Trustee to the Creditors, Dec. 12, 2024, s. A–B, p. 2. The report's comparison table explains that figure as the estimated net proceeds of sale "based on Letters of Intent received and current negotiations with prospective purchasers," per the same report, s. L, note 1, p. 5.

The proposal gave the companies 120 days from court approval to complete the sale and remit the proceeds to the trustee, and deemed them in default if the net proceeds "are not completed and remitted to the Trustee within 120 days of the date of Court Approval of this Proposal." Secured creditors were left uncompromised, to be paid under their own agreements; administrative fees and expenses, capped at $40,000 plus disbursements and applicable taxes, would be paid before any distribution to unsecured creditors; and each related-party creditor would take $1,000 for each proven claim, per the Joint Proposal, Nov. 26, 2024, arts. 2.2, 2.6, 4.1, 5.1, 7.2, pp. 6–9, 13.

On the proposal trustee's estimate, the proposal would leave $133,800 for preferred and unsecured creditors and a bankruptcy would leave nothing, with net assets of $1,350,000 in a bankruptcy against $1,950,000 under the proposal. The report gives its reason for expecting a distribution under the proposal and none in a bankruptcy: "Mr. Tobias, with his industry experience, is conducting the sale process for the Company's principal assets, Mobile Cafes, and should maximize recoveries as opposed to those achievable by a Trustee in Bankruptcy." It adds that the proposal trustee would supervise the sales and receive the proceeds directly, per the Report of Trustee to the Creditors, Dec. 12, 2024, s. L, pp. 5–6.

Article 7.1 says "Sections 95 to 101 of the Act will not apply in respect of the Debtor or this Proposal," which the report summarized under the heading "Preferences and Transactions at Under Value." Article 5.8 provides that claims against the companies that are also claims against the director, relating to company obligations for which directors are by law liable in that capacity and arising before the proposal proceedings began, are "to the extent permitted by the Act, compromised and released and forever discharged as against the Director" upon acceptance by the unsecured creditors and approval by the court, per the Joint Proposal, Nov. 26, 2024, arts. 5.8, 7.1, pp. 10, 13. "To evaluate the appropriateness of this clause," the proposal trustee wrote of art. 7.1, it was reviewing the companies' bank statements and cancelled cheques from October 30, 2023 to October 29, 2024, and would report its findings at the creditors' meeting. Its recommendation that creditors accept was made "subject to no material potential preferences or transfers at undervalue being identified," per the Report of Trustee to the Creditors, Dec. 12, 2024, ss. B(x), L–M, pp. 3, 6.