Update to Digitcom Case in Bankruptcy and Insolvency Court of Ontario


November 20, 2023 edit – Saga Continues! Digitcom Purchaser, Comwave, now bought out by Rogers

  • As reported by Mobile Syrup on November 8, 2023, Comwave was purchased by Rogers
  • Atcom had already heard from a number of former Digitcom customers that Comwave was either unable or unwilling to support Avaya IP Office phone systems
  • Digitcom’s former customer base has now changed hands (on paper) twice in 9 months


March 24, 2023 edit – Former Corp: Digitcom Bankruptcy Declared

  • Company formerly known as Digitcom declared bankruptcy according to Grant & Thornton publication
  • Creditor shortfall approx. $6 Million +
  • Insolvency & Bankruptcy legal team awarded a whopping guaranteed $525,000 or more
  • 151 creditors left holding the bag, all but the TD bank receive $0 according to G&T report to creditors


March 3, 2023 edit – Purchase price and other sale data disclosed:

An unredacted copy of the Proposal Trustee’s Third Report to Court indicates the following:

  • Purchase price from Comwave was $1,750,000
  • Diallog Telecommunications had the backup final bid of $1,100,000
  • EGATE Networks was also in the discussion but did not submit a final bid which was estimated to be  $1,385,000
  • Other interested parties that participated earlier in the SISP process included Connex, Frontier, and Unity
  • The purchased assets include the name Digitcom, all contracts between the Digitcom and it’s customers, whichever employees Comwve elects to keep, AR, equipment, IP, books & records, and goodwill


February 24, 2023 edit – Sale to Comwave approved:

The courts ruled in favour of the Comwave asset purchase on Feb. 23, 2023. Purchase price is still redacted, but is apparently somewhat less than $4.6 million:

  • Per comments of Justice Kimmel “The concurrence of TD, the senior secured creditor that will suffer a shortfall in the repayment of its
    debt, with the proposed Holdback and Distribution is an important consideration in the court’s approval…”
  • First priority payouts look to include:
    $187,739 – Legal counsel and insolvency trustee, professional fees
    $323,591 – TD interim financing payout
    $325,000 – holdback for payout of taxes, WEPP, etc.
    $135,000 – Key employee retention plan
  • 2nd priority is believed TD Bank who was owed $3,562,981 as of the original filing date.
  • Therefore, if TD is going to suffer a shortfall, it stands to reason the purchase price is less than $3,562,981 + $971,330 = $4,534,311

Those appearing in the proceedings yesterday included:
Chris SAMARD Digitcom Telecommunication
Joshua FOSTER Digitcom Telecommunication
Afshan NAVEED Toronto Dominion Bank (Creditor)
Jeffrey OLIVER Proposal Trustee
Yaakov EIZICOVICS Comwave Telecom (2009) Inc. (Purchaser)
Monica SONG Comwave Telecom (2009) Inc. (Purchaser)
Michael MCQUADE Frontier Network (supplier)
Jason DUTRIZAC Bell Canada (supplier)
Brendan BISSELL Egate Networks Inc. (supplier)


February 14, 2023 edit – Sale to Comwave announced:

The insolvency trustee filed a motion to be heard by the courts on Feb. 23, 2023. Among other items it appears to ask for approval to:

  • Continue the process of selling Digitcom assets to Comwave
  • Extend the stay of proceeding until April 9, 2023
  • Keep the purchase price confidential until the sale and court process is finalized
  • Change names: the corporation know as Digitcom will change it’s name to 1984638 Ontario Inc.

“Purchased Assets comprise all or substantially all of Digitcom’s assets (including but not limited to Accounts Receivable, Assumed Contracts, all intellectual property, all Books and Records, certain contract and warranty rights, and all goodwill and intangible assets associated with the Business”

“The Target Closing Date (as defined in the Sale Agreement) is three days from the
date of the granting of the Approval and Vesting Order.” (believed to be Feb. 23, 2023)


January 12, 2023 edit – Sale Closing Date deferred to Feb. 27:

2. THIS COURT ORDERS that the time within which to make a proposal pursuant to
section 62(1) of the BIA and the corresponding stay of proceedings provided for in section 69 of
the BIA, be and are hereby extended in accordance with section 50.4(9) of the BIA to and including
February 27, 2023.


The Proposal Trustee, Grant Thornton, filed their second report to the Ontario Superior Court dated January 5, 2023. It would appear this report contains light at the end of the tunnel for beleaguered Digitcom creditors. Apparent points of note include:

  • The company (Digitcom) has required less of it’s interim credit than initially expected (so far)
  • 7 bidders filed Letters of Intent (LOI’s) by the Dec. 14, 2022 deadline
  • 6 of the 7 LOI’s were deemed qualified
  • As of Jan. 5, 2023 all 6 bidders were still active in pursuing further due diligence prior to submission of Final Bids. Deadline for final bids is January 20, 2023
  • Receipts for the period were higher than forecast, partially due to access of funds previously frozen by Quebec court
  • Project expense was much higher than expected due to sourcing of alternate parts
  • Other expenses were lower; somewhat due to timing, GST rebate, and reversed bank fees
  • Operational, payroll, and admin expenses are expected to be consistent through the next reporting period
  • The company is seeking an extension until Feb. 27, 2023 in order to develop a viable proposal for sale of the company

Full documents can be found on the Grant Thornton website.

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