The creditors of Thés DavidsTea (DTEA), including former employees, will split $ 18 million after the U.S. bankruptcy court for the District of Delaware recognized a Quebec Superior Court ruling approving its plan to ‘arrangement.
The news failed to delight investors, while its stock fell 4.60% Thursday.
The Montreal tea merchant will provide PricewaterhouseCoopers, the court-appointed monitor, with the funds to be distributed to creditors in Canada and the United States.
The plan of arrangement was approved on June 11 by the creditors of DavidsTea and its US subsidiary, and provides for the distribution of funds in mid-July as a full and final settlement of all claims against the company.
DavidsTea was facing claims totaling more than $ 118.2 million from more than 1,500 creditors, 60% of which originated in Canada. These claims included those from Canadian employees, valued as high as $ 3.9 million, according to a PricewaterhouseCoopers report.
The retailer filed for protection in July 2020 under the Companies’ Creditors Arrangement Act in Canada (CCAA) and Chapter 15 of the U.S. Bankruptcy Code.
As part of its restructuring, the chain closed all of its stores last summer except 18 Canadian establishments in shopping malls. DavidsTea also supplies its products to more than 2,500 grocery stores and pharmacies.