Ignite Technology: sold to MNP inside an NOI, then deemed bankrupt

Ignite started in Calgary in June 2011 as a self-funded start-up of four founders, designing video conferencing for corporate boardrooms, according to Steven Taylor, its president and chief executive officer, who holds 43.33% of the voting shares, per his Affidavit No. 1 of Steven Taylor, Feb. 23, 2026, paras. 1, 8–9. Trading as Ignite Technology, it also offered unified communications, audio-visual, cybersecurity and analytics services. Revenue went from $10,462,660 in 2020 to $26,697,606 in 2024; over the same years the net loss went from $97,137 to $1,433,852, and by the end of 2025 the company carried negative retained earnings of approximately $6.1 million, per the First Report of the Proposal Trustee, Feb. 26, 2026, s. 2.0, para. 1; s. 2.1, para. 2. When it filed a notice of intention to make a proposal on February 20, 2026, it had 51 full-time employees in leased offices in Calgary and Toronto and working remotely across Canada, per Affidavit No. 1, paras. 4, 13.

The filing followed a deal already signed. On February 13, Ignite and MNP entered into a binding term sheet under which Ignite agreed to commence the NOI proceedings, to use reasonable efforts to seek court approval of the transaction, and to keep the terms confidential, per Affidavit No. 1, para. 53. "Given Ignite's financial position and illiquidity, the MNP Term Sheet required that the MNP Transaction be completed through the NOI Proceedings," the proposal trustee later reported, per the Second Report of the Proposal Trustee, Apr. 15, 2026, s. 3.3, para. 2. MNP Digital Inc. closed on the business on May 8. No proposal was filed, and on June 20 Ignite was deemed to have made an assignment in bankruptcy, per the Trustee's Report to Creditors on Preliminary Administration, July 10, 2026, s. 1.1, para. 6; s. 1.2, para. 1.

The growth years and the CRA

Ignite's account, as the trustee summarized it, traces the difficulties to expansion: the December 2021 acquisition of Northern Backup Incorporated, a managed-services business, proprietary software, and hiring that took the company to approximately 100 employees by November 2023, per the First Report, s. 2.1, para. 1. "In the absence of third-party capital to fund the above initiatives, the Company began deferring payments to certain creditors, including source deductions and GST," which by January 2024 had accumulated to approximately $5.3 million owing to the Canada Revenue Agency, per the First Report, s. 2.1, para. 3.

In 2024 Ignite cut staff by approximately 20% and entered a payment plan with the CRA of $150,000 a month, per Affidavit No. 1, paras. 28–29. By the table in Mr. Taylor's second affidavit, unpaid source-deduction principal fell from $3,209,966 in June 2024 to $1,440,662 on February 28, 2026, while interest and penalties rose from $832,057 to $1,356,826. "Despite our best efforts, Ignite was not able to completely repay the CRA Arrears, largely due to the continuing interest and penalty accrual," he swore, per the Affidavit No. 2 of Steven Taylor, Apr. 13, 2026, para. 57.

ATB Financial, the operating lender, issued a demand and a notice of intention to enforce security under s. 244 of the Bankruptcy and Insolvency Act on August 14, 2024, and forbore from August 30 under an agreement amended three times, per the First Report, s. 3.2, para. 3. A fourth amendment later recited, among the defaults, that no sale had closed by November 15, 2025, the day the forbearance period expired, per the First Report, App. B, recitals B–C.

Eighteen months of looking

Mr. Taylor put the search at approximately 18 months. Early approaches to lenders and investors produced no investment, sale or refinancing, "primarily due to the presence of the CRA Arrears and/or the perception of negative equity in Ignite," per Affidavit No. 2, paras. 16–17, 32. In March 2025 Ignite retained Kluane Financial Services Inc., whose process ran to a teaser for 49 prospective purchasers, 14 non-disclosure agreements, six expressions of interest, primarily focused on the managed-services division, and two letters of intent. An exclusive letter for the division produced no transaction after the bidder sought, on October 28, to cut it down to what the trustee called "a few key customers, which would not resolve Ignite's financial difficulties." A December round brought two revised letters at a reduced price for the division and an offer from MNP for substantially all of the business, per the Second Report, s. 3.2, paras. 1, 3–6.

The NOI on ATB's terms

On March 2, Justice M.H. Bourque extended the proposal period to May 6, barred suppliers from cutting off goods and services paid for after the order, and granted four charges ranking ahead of all other encumbrances: up to $450,000 for the professionals, including the proposal trustee, KSV Restructuring Inc.; up to $460,000 plus interest, fees and expenses for ATB's post-filing advances only; $80,000 for a retention plan for the chief financial officer; and $260,000 for the director and officers, per the Order (Stay Extension and Charges), Mar. 2, 2026, paras. 3, 5, 11, 16, 18, 22, 28.

Having issued its s. 244 notices more than ten days before the filing, ATB "is not stayed by the filing of the NOI and does not otherwise need to support Ignite through these NOI Proceedings," the First Report noted, per the First Report, s. 6.2, para. 3(e). Under its fourth forbearance amendment ATB was to be an unaffected creditor, and the MNP transaction had to close by May 6; failing to close it was a termination event, per the First Report, s. 3.2, para. 5(b), (f), (h)(iv), (i)(iii). The amendment also required that, alongside approval of the sale, Ignite obtain "an Order for distribution of the sale proceeds to the Lender and any priority creditors," per the First Report, App. B, s. 3.4.

What MNP Digital bought

The asset purchase agreement, dated as of April 8, 2026, sold MNP Digital Inc. Ignite's receivables, assumed contracts, equipment, inventory, intellectual property, books and records and goodwill, among other assets. The base purchase price is redacted from the public copy. At closing it is adjusted downward for, among other things, unearned revenue and shortfalls in backlog and in monthly recurring managed-services revenue; MNP also pays an amount equal to the receivables it collects within 90 days of closing, per the Second Report, s. 3.4, paras. 1, 2(c), (f), (h). MNP was to offer employment, conditional on closing, to every Ignite employee in Canada except Mr. Taylor, with Ignite's notices of termination taking effect immediately before closing. A footnote adds that MNP Services Partnership would offer Mr. Taylor a position "on terms determined by the Purchaser in its sole discretion," per the Second Report, s. 3.4, para. 2(j), n. 4.

KSV supported the sale because, on Kluane's results, it did not believe further marketing was reasonably likely to produce a superior transaction, and it called the liquidation value uncertain: "Other than cash and minimal unencumbered inventory, the only liquid asset is accounts receivable, and it is uncertain if same will generate any net recoveries if operations are discontinued," per the Second Report, s. 3.5, para. 1(d), (f).

The price sits in Mr. Taylor's third affidavit, which attaches the unredacted agreement, and in a confidential supplement to the Second Report, per the Second Report, s. 3.4, para. 1; s. 3.6, para. 1. Confidentiality of the price "was a material term of the negotiations and was specifically provided for in the MNP Term Sheet," Mr. Taylor swore, and Ignite proposed a seal of six months after the earlier of the closing certificate's filing or an assignment into bankruptcy, per Affidavit No. 2, paras. 61, 63. The order as granted seals both documents until two years after the earlier of those events, or further order, per the Sale Approval and Vesting Order, Apr. 23, 2026, para. 18.