TELoIP Inc.

CCAA

Page last updated: August 23, 2018

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.


On June 27, 2018 (the “Filing Date”) TELoIP Inc. (“TELoIP”, the “Company” or the “Applicant”) applied for and received an order (the “Initial Order”) for protection pursuant to the Companies’ Creditors Arrangement Act (“CCAA”), R.S.C.1985, c.C-36, as amended, from the Ontario Superior Court of Justice (Commercial List) (the “Court”). The Initial Order includes among other things, a stay of proceedings against the Company, and the appointment of PricewaterhouseCoopers Inc., LIT as monitor of the Applicant (“PwC” or the “Monitor”).

The Initial Order, among other things:

  1. Approved a stay of proceedings up to and including July 27, 2018 (“Stay Period”);
  2. Authorized the Company to continue to utilize the central cash management system currently in place, as described in the affidavit of Joseph P. Wiley sworn June 27, 2018, or replace it with another substantially similar central cash management system (the “Cash Management System”);
  3. Granted a first ranking charge, in the amount of $450,000 (the “Administration Charge”), over all of the property of the Applicant, as security for fees and disbursements of the Monitor and its counsel and the Applicant’s counsel;
  4. Approved the debtor in possession financing (the “DIP Financing”) to be provided by Adarsan Holdings Ltd. and Dicot Holdings Ltd. (collectively, the “DIP Lender”), in the maximum amount of $1.5 million;
  5. Approved a second ranking charge to secure the DIP Financing (the “DIP Lender’s Charge”) in favour of the DIP Lender; and
  6. Granted a third ranking charge, in the amount of $300,000 (the “Directors’ Charge”), over all of the property of the Company, as security for the indemnity granted to the Applicant’s directors and officers.

In accordance with section 23 (1)(ii)(b) of the CCAA and the Initial Order, a notice will be sent within 5 days of the Filing Date to all of the Applicant’s creditors who are owed $1,000 or more, excluding any individual employees, former employees with pension and/or retirement savings or benefits plan entitlements, and retirees and other beneficiaries who have entitlements under any pension or retirement savings plan.

Status of the file as of August 23, 2018


Pursuant to the Termination Order, on August 23, 2018, the Monitor filed its Discharge Certificate with the Court. The Monitor is now discharged form its duties in the CCAA proceedings. A copy of the Monitor's Discharge Certificate is on the orders section of this website.

On August 22, 2018, pursuant to section 11.05 of the Plan and paragraph 10 of the Plan Sanction Order, the Monitor delivered the Monitor's Certificate to the counsel of the Company, advising that on August 22, 2018 plan implementation had occurred (the "Plan Implementation Date") and the Plan is now effective in accordance with its terms and the terms of the Sanction Order.
 

Status of the file as of August 20, 2018

On August 20, 2018, the Court granted orders, which among other things:

  1. Approved and sanctioned the Plan and authorizes the Applicant and the Monitor to take all steps and actions, and do all things necessary or appropriate to implement the Plan in accordance with its terms (the “Plan Sanction Order”);
  2. Approved the actions, conduct and activities and fees of the Monitor and terminated the CCAA proceedings effective upon the Monitor filing the Monitor’s Discharge Certificate with the Court (the “Termination Order”); and

Authorized the Applicant to act as a Power of Attorney on behalf of Patricio Humberto Saaverda in respect of certain intellectual property (the “IP Order”).

 

Status of the file as of August 15, 2018

On August 15, 2018, the Applicant filed a motion for orders, which among other things:

  1. Approves and sanctions the Plan ;and
  2. Authorizes the Applicant and the Monitor, to take all steps and actions, and do all things necessary or appropriate to implement the Plan in accordance with its terms. (the “Plan Sanction Order”)and an order, which among other things:
  3. Approves the actions, conduct and activities and fees of the Monitor and terminates the CCAA proceedings (the “Termination Order”)and an order, which among other things:
  4. Authorizes the Applicant to act as a Power of Attorney on behalf of Patricio Humberto Saaverda in respect of certain intellectual property (the “IP Order”).

The motion will be heard on August 20, 2018.

On August 15, 2018, the Monitor filed its second report dated August 15, 2018 (the “Second Report”) with the Court to provide the Court with information concerning:

  1. The status of the Claims Process;
  2. The result of the creditors’ voting on the Plan at the Meeting;
  3. TELoIP’s actual cash flows for the seven weeks ending August 10, 2018 compared to the cash flow forecast included in the First Report (the “Cash Flow Statement”);
  4. Matters remaining to be completed in the CCAA proceedings;
  5. The fees and disbursements of the Monitor and its legal counsel for the period of June 27, 2018 to August 10, 2018 and the period of June,  27 2018 to July 31, 2018, respectively and its estimated accrual to discharge;
  6. The Monitor’s activities since the date of the First Report; and
  7. The Monitor’s comments and recommendations with respect to the  relief being requested by the Company (the “Requested Relief”), including:

            i. Approval of the Company’s Plan pursuant to the proposed Sanction Order filed by the Company in its motion material;
            ii. Approval of an order relating to certain intellectual property matters in conjunction with the implementation of the Plan;
            iii. Approval of the proposed termination of the CCAA proceedings and discharge of the Monitor upon the filing of a Monitor’s Certificate (the “Monitor’s Discharge Certificate”).
            iv. Approval of the Monitor’s activities as set out in the First Report, the supplement to the First Report dated July 30, 2018 (the “Supplemental Report”) and this Second Report; and
            v. Approval of the Monitor’s fees and disbursements including those of its legal counsel.

Status of the file as of August 14, 2018

On August 14, 2018, the Meeting was held at 10:00 a.m. (Toronto time) at the offices of the Monitor, to consider and vote on the Plan.

The resolutions by the Affected Creditors, of each class of creditors, approving the Plan pursuant to the CCAA were approved by the requisite number and value of Affected Creditors in each class of creditors.

The Applicant's intends to seek an order from the Court sanctioning and approving the Plan (the "Sanction Order") at a hearing scheduled for August 20, 2018. Implementation of the Plan is subject to obtaining the Sanction Order and certain other conditions as contained in the Plan.

Status of the file as of July 31, 2018

On July 30, 2018, the Monitor filed a supplemental report to its First Report, to provide the Court with  the Monitor's opinion on the reasonableness of a decision to include a provision in the Plan that section 95 to 101 of the BIA do not apply in respect of the Plan. The Monitor has conducted a review of the transactions entered into by the Company prior to the commencement of the CCAA proceedings and is not aware of any transactions that would constitute a Preference Payment and Transfer at Undervalue (as defined in the Supplement Report).  Accordingly, in the Monitor's view the inclusion of a provision that sections 95 to 101 do not apply to the Plan will not have an adverse effect on the creditors of the Company that are subject to the Plan.

Status of file as of July 13, 2018

On July 13, 2018, the Court granted the Meeting Order, which among other things:

  1. Authorized the Applicant to file the Plan;
  2. Authorized and directed TELoIP to call, hold and conduct the Meeting;
  3. Approved the procedures to be followed with respect to the call and conduct of the Meeting;
  4. Set the date for the Sanction Hearing should the Plan be approved at the Meeting; and
  5. Approved the Information Package and the other proposed methods and forms of notice of the Meeting and the Sanction Hearing.

And, on July 13, 2018, the Court granted the Claims Procedure Order, which among other things, approved the Claims Process.

And, on July 13, 2018, the Court granted the Stay Extension Order, which among other things approved the extension of the Stay Period to August 24, 2018.

Status of file as of July 11, 2018

On July 10, 2018, the Monitor filed its First Report (the “First Report”) with the Court to provide the Court with information concerning:

  1. The Applicant, including the reasons for the proceeding under the CCAA;
  2. The status of support for the Applicant’s proposed Recapitalization (as defined in the First Report);
  3. The Applicant’s proposed Claims Procedure Order;
  4. The Applicant’s Plan, dated July 7, 2018 and filed in connection with this motion;
  5. The Applicant’s proposed Meeting Order;
  6. TELoIP’s actual cash flows for the two weeks ending July 6, 2018 compared to the cash flow forecast included in the Pre-Filing Report;
  7. The Applicant’s request for approval of the Claims Procedure Order, the Meeting Order and an extension of the Stay Period to August 24, 2018; and
  8. The Monitor’s activities since the Filing Date.

The motion will be heard on July 13, 2018.

Status of file as of July 9, 2018

On July 7, 2018, the Applicant filed a motion for an order (the “Meeting Order”), seeking among other things:

  1. Authorization to file a Plan of Compromise and Arrangement (the "Plan") in respect of TELoIP;
  2. Authorization and direction for TELoIP to call, hold and conduct a meeting of creditors (the "Meeting") to consider and vote on the Plan;
  3. Approval of the procedures to be followed with respect to the call and conduct of the Meeting;
  4. Setting the date for the hearing of the Applicant's motion seeking sanction of the Plan (the “Sanction Hearing”) should the Plan be approved at the Meeting; and
  5. Approval of the Information Packages (as defined in the Meeting Order) and the other proposed methods and forms of notice of the Meeting and the Sanction Hearing.

And, on July 7, 2018, the Applicant filed a motion for an order (the “Claim Procedure Order”), seeking, among other things, an approval of a process for the solicitation, identification and determination of claims against the Applicant and its current and former directors and officers (the “Claims Process”).

And, on July 7, 2018, the Applicant filed a motion for an order (the “Stay Extension Order”), seeking among other things, an approval of an extension of the Stay Period to August 24, 2018.

The motion will be heard on July 13, 2018.


Contact us

This website will be updated as information becomes available.

For more information, please contact:

TELoIP CCAA Monitor, PwC Canada

Tel: +1 416 687 8853

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