September 14, 2020
Essentia Group Inc. ("Essentia") and 6860966 Canada Inc. ("686") (collectively, the "Debtors") filed NOIs on September 14. Essentia is a domestic manufacturer and distributor of organic memory foam mattresses with facilities in Laval, Quebec, and 686 owns the patent and trademarks used by Essentia in the conduct of its business. Started in 2006, the Debtors' business has recently been plagued by a series of profitability issues and financial difficulties, including the $1.0 million it sustained in losses after its retail expansion in the US did not result in profitability, as well as the COVID-19 pandemic. Consequently, the Debtors continue to accumulate significant losses which have been financed by credit facilities provided by BMO and loans provided by BDC, BDC Capital Inc., and Investissement Québec. Since 2017, the Debtors have been engaged in several unsuccessful discussions with parties regarding the possibility of purchasing some or all of their assets or becoming the Debtors' financial partner. In August, While You Were Sleeping Inc. (on behalf of a purchaser) offered to purchase all of Essentia's movable property and 686's intellectual property. The court has issued an Approval and Vesting order authorizing the sale of the Debtors' assets to the purchaser, which will enable the continuation of Essentia's business and retain the jobs of its 15 employees. MNP is the proposal trustee. Counsel is Kugler Kandestin for the Debtors, Fishman Flanz Meland Paquin for the purchaser, Davies for the senior secured lender, BMO, and Société D'Avocats Dexar for BDC and BDC Capital Inc.