June 29, 2020
GNC Holdings (NYSE:GNC), a Pittsburgh, Pennsylvania-based specialty retailer of health and wellness products, in its capacity as foreign representative, had its Chapter 11 proceedings recognized in Canada under the CCAA on June 29. Over the past two years, the company has entered into several transactions that it believes have contributed to an increased profitability and stability of its business. However, faced with the potential maturity of its secured debt obligations and a decline in sales and liquidity caused by the COVID-19 pandemic, the company had no option other than to commence Chapter 11 bankruptcy. Following weeks of extensive negotiations, the company was able to negotiate DIP financing and a pre-arranged standalone plan of reorganization with certain of their secured lenders. The company hopes that the overwhelming support of the company's creditors will enable it to quickly emerge from its insolvency proceeding. The company will continue operating, but will become a smaller company as it plans to close up to 20% of its 5,800 retail stores, including 29 stores in Canada. FTI was appointed information officer. Counsel is Torys for the company, Stikeman Elliott for the information officer, and Cassels for the DIP lenders.