Technologies Inc.


Page last updated: December 12, 2017

This page is for information purposes only and you should consult your professional adviser if you have any questions or are uncertain as to your rights or obligations.

More information will be posted to this website, as soon as it becomes available.

Status update as at December 6, 2017

In light of the decision by the Court on November 24, 2017 with respect to the Alleged License Agreement claim, the Company is seeking a recovery of the costs it incurred to determine the validity of the claim from ICC. The Company, its Interim Lenders and the Monitor have filed materials with the Court that outline the costs incurred by BuildDirect. Copies of these materials and the Monitor's Third report are posted on this website.   

On December 6, 2017, the Company sought and obtained a final ruling from the US Court that recognized the Canadian CCAA proceedings. The impact of this order is to confirm the stay of proceedings as ordered by the Canadian Court, is effective in the United States. As a result, creditors of BuildDirect are no longer entitled to take collection action in the United States against BuildDirect for pre-filing debts owed to them. The order of the US Court also restrains parties with executory contracts with BuildDirect from withholding performance or terminating these contracts. A copy of the US Court order will be posted to this website,  once the entered copy of the order is obtained from the US Court.

Status Update as at November 24, 2017 

On November 21, 2017, the Court heard arguments on the Monitor’s application seeking a declaration as to whether the Company and In Colour Capital LP (“ICC”) had entered into the Alleged License Agreement.  ICC claimed that on or about October 18, 2017, the Company and ICC had entered into the Alleged License Agreement as a result of, among other things, a telephone conversation between the principal of ICC and Mr. Jeff Booth, who was the CEO of the Company at the time.  The Company rejected ICC’s claim and asserted that the Alleged License Agreement did not exist.  The Monitor was concerned that the existence of this unresolved dispute over the Company’s intellectual property could materially and negatively affect the efforts of the Company to pursue a sale or recapitalization of the business under the SISP.  Accordingly, the Monitor filed its application for a declaration on the Alleged License Agreement, so that the issue could be quickly resolved. 

On November 24, 2017 the Court gave extensive oral reasons, declaring that the parties had never progressed beyond the negotiation stage, and that consequently the Alleged License Agreement does not exist.   The Court further ruled that even if Mr. Booth had purported to enter into the Alleged License Agreement with ICC, any such agreement would have required approval of the Board of Directors of the Company, which was never obtained. 

The Monitor is pleased that this issue has been resolved, and that it will no longer distract the Company as they continue with their efforts under the SISP.

Status Update as at November 22, 2017

A court hearing was held on November 21, 2017 to deal with various matters, which resulted in several updates to this proceeding.  The Monitor is pleased with the results of the court hearing as well as the current state of operations and progress within this CCAA administration.  For the full details of the Company's operations, please refer to the Monitor's Second Report which can be found under the tab Monitor's Reports.   

An Amended and Restated Initial Order ("ARIO") was issued by the Court.  An ARIO essentially replaces the Initial Order that was granted on October 31, 2017 at the commencement of the CCAA proceedings.  A copy of the ARIO can be found under the Court Orders tab.   

The following points have been added to the ARIO, and are highlighted for readers: 

  • The engagement of Canaccord Genuity Corp. and Canaccord Genuity Inc. (together, "BuildDirect's Financial Advisor") was approved (points 11 - 14).  The purpose of their role is to act as agent under the Sales and Investment Solicitation Process ("SISP"). 
  • The stay of proceedings has been extended until February 23, 2018 (point 19) 

The Court also heard the arguments on the application of the Monitor re: the In Colour Capital LP Alleged License Agreement.  The Court will provide its decision in this matter on Friday, November 24, 2017.     

Apart from yesterday's hearing, we advise that an updated creditor list has been posted under the Creditor Communications tab.   

Status Update as at November 14, 2017

BuildDirect obtained approval from the Court on a number of  matters today.  The Court approved the proposed sale and investment solicitation process (the "SISP"), the key employee retention plan (the "KERP"), and an agreement with one of its warehouse service providers. Further, the Court approved the deferral of the Company's annual meeting of shareholders until further order of the Court. In light of the approval for the SISP, BuildDirect intends to confirm the engagement of an investment banker shortly, and commence the sales and investment solicitation process immediately thereafter.

On November 21, 2017, BuildDirect will return to Court to obtain an extension of the CCAA proceedings generally. Materials supporting this further court application are expected to be available before the end of the week, and will be posted to this website in due course.

Status Update as at November 10, 2017

BuildDirect has made significant progress in the short period of time since October 31, 2017 when it commenced these CCAA proceedings. The Company has finalized its interim financing credit agreement and has received US$ 7 million in funding from the US$ 15 million interim financing facility that it negotiated prior to commencing the CCAA proceedings. Further, the Company has secured commitments from each of its warehouse service providers, and most of its significant logistics providers, to continue service so that BuildDirect can continue to service its valued customers.

As part of BuildDirect's recapitalization process, it intends to engage an investment banker and execute a sale and investment solicitation process shortly. To that end, BuildDirect is applying to the Court on Tuesday November 14, 2017 for approval to proceed with this process. Further, BuildDirect has designed a key employee retention plan which it proposes to implement to encourage a number of key employees to continue their employment with BuildDirect. The Company is seeking the Court's approval of this plan on Tuesday November 14, 2017 as well. The Court hearing on Tuesday will also deal with some other incidental matters. The Company's motion materials and the Monitor's report have been posted to this website and provide further details on the matters that will be brought before the Court.

Status Update as at November 3, 2017

BuildDirect has applied to the United States Court in the Central District of California, Los Angeles Division, (the "US Court") for "recognition" of the Canadian Court's initial order under the CCAA proceedings (the "Initial Order").  Recognition of the Initial Order would effectively extend its effect into the United States.  The US Court will hear this application on Wednesday December 6, 2017 at 10:00 am.  Application materials are posted on this website under Chapter 15 US Filing Documents.

BuildDirect also sought an interim order from the US Court to recognize certain elements of the Initial Order immediately (the "US Interim Order"). The US Interim Order applies to 22 "Urgent Suppliers" as identified in Exhibit G of John Sotham's affidavit in support of the recognition application which is posted on this website under Chapter 15 US Filing Documents.  On November 3, 2017, the US Court granted the US Interim Order which is posted on this website under "US Court Orders". The US Interim Order is effective on October 31, 2017, and applies to the 22 Urgent Suppliers and certain parties to litigation commenced against BuildDirect in the United States (the "Litigants"). In general, the stay of proceedings granted by the Canadian Court now applies to the Litigants and the  22 Urgent Suppliers. Further, the 22 Urgent Suppliers are also restricted from cancelling any contracts/service arrangements that were in place prior to the Initial Order.

Status Update as at November 1, 2017

On October 31, 2017 (the "Filing Date"), Technologies Inc. ("BuildDirect") sought and obtained an Initial Order pursuant to the CCAA.    BuildDirect's stated purpose for doing so was to facilitate either a recapitalization or a sale transaction as part of the CCAA proceedings, and to facilitate further financing that BuildDirect required. In order to continue to fund BuildDirects' operations, BuildDirect negotiated a US$ 15 million DIP Term Sheet with a syndicate of lenders who are signficant investors in BuildDirect. The Court approved this Interim Financing which provides for an immediate advance of USD $4 million within 24 hours of approval of the DIP Term Sheet by the Court. BuildDirect's intention is to continue its operations during these CCAA proceedings while it works on its financial restructuring.

As is typical of Initial Orders pursuant to the CCAA, there are restrictions on BuildDirect's trading partners from terminating their arrangements with BuildDirect and on payments that BuildDirect can make with respect to obligations owing to BuildDirect's creditors on the Filing Date. BuildDirect is however, expected to meet its payment obligations for goods and services provided following the Filing Date. The Interim Financing approved by the Court facilitates this.

Details regarding BuildDirect's background and financial position are contained within the initial application materials posted on this website as well as the Initial Order.

The Monitor prepared a pre-filing report to assist the Court during the application made by BuildDirect. This report is posted on this website.    

The Monitor will post regular status updates to this website and post future Monitor reports and court materials, as they become available during these CCAA proceedings.

This Web site will be updated as information becomes available.

For more information, please contact: Kiran Chahal or Patricia Marshall, Telephone: +1 604 806 7647, Fax: +1 604 806 7043, or via Email.