On November 12, 2025, Sonder Canada Inc. and Hospitalité Sonder Canada Inc., the Canadian operations of boutique hotel chain Sonder, have filed assignments in bankruptcy, marking a significant reversal for the Montreal-founded hospitality venture. The bankruptcy proceedings resulted in the closure of more than 950 units across four major Canadian cities. The collapse was precipitated by Marriott's cancellation of its licensing agreement with Sonder, followed by the US parent company's decision to initiate an immediate wind-down of operations. The US entities subsequently filed for Chapter 7 bankruptcy protection two days after the Canadian filings.

The insolvency creates substantial complications for multiple stakeholders. Landlords face abandoned leases, employees are without employment, vendors encounter outstanding payment obligations, and guests have lost prepaid bookings with no recourse. The shutdown represents a dramatic decline for what was once positioned as a Canadian technology success story in the hospitality sector.

Ernst & Young has been appointed as the bankruptcy trustee overseeing the proceedings. Legal representation includes Norton Rose serving as counsel to the trustee and Blakes representing Sonder throughout the bankruptcy process. The rapid deterioration of Sonder's operations underscores the vulnerability of growth-dependent business models within the competitive hospitality industry, particularly when dependent on third-party partnerships for critical licensing arrangements.