ITP Holdings - Chapter 11 Case Summary

ITP Holdings filed for Chapter 11 after Bank of Montreal discontinued the revolving facility that financed subsidiary Information Technology Partners, Inc.'s equipment purchases, leaving an approximately $9.8 million balance due. The companies attribute an approximately 23-month operational standstill to constrained accounts and vendor litigation against the subsidiary's receivables, and seek to resolve competing claims to those receivables in a single forum, release approximately $1.9 million in customer-held receivables to fund a restart, and propose a plan of reorganization around a services-based model.

Business Description

ITP Holdings, Inc. ("ITP Holdings") and its affiliates ITP Equipment, LLC ("ITP Equipment"), Information Technology Partners, Inc. ("ITP") and Archetype Software, LLC ("Archetype," and collectively with ITP Holdings, ITP Equipment and ITP, the "Debtors") provide business-to-business information technology services throughout the world.

For more than three decades, ITP designed, built and supported computing networks and infrastructure engineered to the specific operational requirements of its corporate clients, and provided those clients long-term managed information technology support services. At its peak, ITP operated at approximately $30 million in annual revenue with approximately 75 employees.

Corporate History

ITP was founded in 1991 by Michael Thompson, a technology architect and engineer who serves as President of ITP Holdings. ITP Holdings, a Nevada corporation, is the parent holding company of the other three Debtors. It owns 100% of the outstanding voting shares of ITP, also a Nevada corporation, and is the sole member of each of ITP Equipment and Archetype, both Wisconsin limited liability companies. The Debtors are financially interdependent. Third parties may contract for services or equipment with any of the Debtors, but ITP Holdings serves as the upstream entity.

Operations Overview

Client Base

ITP's clients have spanned manufacturing, distribution, retail, brokerage, legal, healthcare and philanthropy, and have included the W.K. Kellogg Foundation, Emerson Electric, InSinkErator and the Ali Group. Many of these relationships lasted for decades.

Hardware Subscription Model

Approximately 45% of ITP's revenue came from hardware subscriptions. Under these subscriptions, clients obtained laptops, servers, switches, routers and related equipment for a monthly subscription bundled with ITP's managed services. The balance of revenue came from recurring technical services. ITP bought the equipment up front and recovered its cost over a subscription term of approximately 32 months, so the model depended on financing.

Prepetition Obligations

For approximately two decades, ITP financed its equipment purchases through a revolving credit facility with its longtime lender, Bank of Montreal ("BOM"). The facility had a limit of approximately $12 million. It was drawn as ITP purchased equipment and replenished as clients paid their subscriptions. When BOM terminated the facility, ITP's outstanding balance of approximately $9.8 million came due. ITP later retired that balance in full with the proceeds of a sale-leaseback, under which it sold assets to a lessor and leased them back.

Events Leading to Bankruptcy

Termination of the BOM Facility

According to the Debtors, BOM discontinued the revolving credit product on which ITP relied after BOM acquired Bank of the West and consolidated its lending lines. ITP could not pay the outstanding balance on demand. It also could not readily refinance on comparable terms, which the Debtors attribute to prospective lenders' view that the collateral (depreciating equipment installed at client sites around the world) was impractical to repossess.

Without the revolving facility, ITP's monthly cash flow inverted. Client payments continued, but ITP had to both service the BOM balance and fund new equipment purchases from its own cash. The result was a monthly shortfall of approximately $200,000.

Sale-Leaseback and Operational Standstill

After a search of approximately 18 months, ITP entered into the sale-leaseback that retired the BOM balance. According to the Debtors, BOM took steps toward a receivership during that search. The sale-leaseback provided no new working capital, and the Debtors characterize it as unaffordable. According to the Debtors, in the months that followed the accumulated operational shortfall exceeded what the business could absorb and repay.

Several vendors pursued litigation to secure their positions against ITP's accounts and receivables. The Debtors attribute ITP's inability to reliably conduct day-to-day operations to its constrained accounts and the pursuit of its receivables by multiple creditors, and its business has been at a standstill for approximately 23 months. Customers are holding approximately $1.9 million of ITP's earned receivables (the "Preserved Receivables") for the benefit of ITP's third-party creditors.

Chapter 11 Filing

On November 3, 2026, each of the Debtors filed a voluntary Chapter 11 petition in the U.S. Bankruptcy Court for the District of Nevada. The Debtors filed for three purposes:

to obtain a single forum in which to resolve competing claims to their receivables;
to release the Preserved Receivables to fund a restart of operations; and
to propose a plan of reorganization through which their creditors may be repaid.

Reorganized Business Model

The Debtors intend to reorganize around a services-based model that does not require ITP to finance hardware on its own balance sheet. The Debtors cite that on-balance-sheet hardware financing as the vulnerability that led to these cases. According to the Debtors, through automation the reorganized business would operate with approximately nine people, under independent governance. The Debtors characterize the business as viable. They cite ITP's active client contracts, the Preserved Receivables, proprietary software and automation developed during the standstill, and a pipeline of new clients ready to commence.

First Day Motions

Bank account — On an emergency basis, the Debtors seek authority for ITP Holdings to keep using its existing operating account at Coastal Community Bank and its existing check stock and wire/ACH payment forms, and to honor certain related prepetition obligations. ITP Holdings opened the account shortly before the filing, after Bank of America, Wells Fargo, Chase Bank, PNC Bank and Capital One Bank each rejected its application, and it has been unable to secure any other account. Because it lacked an account for depositing payments, ITP Holdings has been unable to collect certain amounts owed to it, and the process of designating the account as a debtor-in-possession account under the U.S. Trustee's guidelines is underway.