March 12, 2021
Knotel Canada, Inc. had its US Chapter 11 proceedings recognized under the CCAA on March 12. Founded in 2015 and based in New York City, the company's parent and subsidiaries (collectively, the "Knotel Group") are a market leader in the dedicated flexible workspace industry. In Canada, the company has entered into leases for office space in the Financial District in Toronto to provide workspace arrangements in a dedicated, non-shared environment. Despite significant growth in 2019, the Knotel Group experienced significant disruption over the past year as a result of the COVID-19 pandemic, which adversely affected the Knotel Group's cash flow and ability to raise new capital. Throughout 2020, the Knotel Group took various actions to improve sales, reduce costs, and raise new capital. However, the pandemic’s duration and severe impact on the Knotel Group's liquidity proved to be overwhelming. In January, the company's parent and more than 200 US subsidiaries filed voluntary petitions for relief under the US Bankruptcy Code to facilitate a going concern sale of the Knotel Group's core business. Recognition of the Chapter 11 cases will avoid multiple main proceedings in different jurisdictions and give the Knotel Group the opportunity to complete a comprehensive sale of its business. Alvarez & Marsal was appointed information officer. Counsel is Cassels for the Canadian filing entities and Blakes for the information officer.