1465770 Alberta Ltd. o/a Westlake Husky, a Lloydminster, Alberta-based company that operates a gas station and convenience store, was placed in receivership on March 24 on application by RBC, owed approximately $1.2 million. EY was appointed receiver. Counsel is Dentons for RBC and DLA Piper for the receiver.
0932293 B.C. Ltd. (o/a CELLICON), an Abbottsford, British Columbia-based company that provides retail sales of wireless accessories, as well as phone repair services at mall-based kiosks and stores, was deemed to have filed an assignment in bankruptcy on March 2, listing approximately $362.0 thousand in assets and $1.8 million in liabilities. Most of CELLICON's locations are operated by independent operators under Management Services Agreements ("MSAs"). Like others in the retail sector, CELLICON's business was adversely impacted by the various restrictions and closures arising from the COVID-19 pandemic. More recently, CELLICON's cash flows were negatively impacted by certain operators' refusal or inability to pay the fees due under the MSAs. In response, on February 19, CELLICON filed an NOI with a view to stabilizing its business. After CELLICON realized it could not fund payment of its March 2021 rent, however, it chose not to file the cash flow projections required under the BIA, resulting in it being deemed to have filed an assignment in bankruptcy. Counsel to certain of the operators have indicated that the MSAs are not compliant with various franchise laws across Canada and, as such, have advised that the operators will have claims against CELLICON that would set off any amounts owed under the MSAs. MNP is the bankruptcy trustee.
Change of Scandinavia Canada Retail Inc., a Montreal, Quebec-based privately-held retailer which currently operates 26 stores across Canada under the name CHANGE Lingerie (the "Brand"), filed an NOI on March 2, listing approximately $4.1 million in liabilities, including $2.0 million to RBC. The Brand was founded in 2006 in Denmark and has over 200 stores worldwide. This NOI only pertains to the Canadian entity. Given the COVID-19 environment and impact on the retail sector, the company has suffered significant losses and a major reduction in sales. The company is currently looking to restructure its operations, which may include the closure of certain points of sale. Richter is the proposal trustee. Counsel is Kugler Kandestin for the company and Norton Rose Fulbright for the proposal trustee.
Boutique Tristan & Iseut Inc., which operates the Montreal, Quebec-based Tristan fashion brand with 38 stores across Canada, filed for protection under the CCAA on January 20, listing approximately $32.9 million in liabilities, including $1.5 million to the National Bank of Canada. Various factors contributed to the company's financial difficulties. In recent years, Canadian clothing retailers, including Tristan, have faced increasing competition from online and foreign retailers. The COVID-19 pandemic further exacerbated the company's financial situation when the company experienced a further drop in traffic in its brick-and-mortar stores and it was forced to temporarily lay off more than 300 employees. In July 2020, the company filed an NOI under the Bankruptcy and Insolvency Act (the "BIA"), with the time to file a proposal set to expire on January 21, 2021. Although the company's restructuring is largely complete, it is not yet ready to emerge from the restructuring process. As such, the company has sought an order authorizing the BIA proceedings to continue under the CCAA. Since the start of its restructuring, the company has operated in the normal course of business and has tried to stimulate demand by maintaining orders for new seasonal clothing collections. MNP was appointed monitor. Stikeman Elliott is counsel for the company.
Studio Black Suede Inc., a Montreal, Quebec-based premium footwear brand, filed an NOI on December 24, 2020 owing approximately $434.0 thousand to CIBC. Litwin Boyadjian is the proposal trustee.
Haggar Canada Direct Co. (“Haggar”), a fashion apparel retailer carrying on business from several retail locations in the Province of Ontario – including Niagara-on-the-Lake, Ottawa, Cookstown and Vaughan – filed an assignment in bankruptcy on December 2. Haggar experienced financial difficulties due to the impact of the COVID-19 pandemic on its retail stores in Canada, including a significant decline in revenues, which led to management’s decision to cease carrying on retail operations in Canada. Fuller Landau was appointed bankruptcy trustee and has obtained an order authorizing it to commence a liquidation sale of the inventory at Haggar’s retail locations. Aird & Berlis is counsel for the company. Danbury Global is conducting the liquidation.
Directions East Retail Ltd., a Toronto, Ontario-based jewellery retailer with a 50-year history, filed an NOI on October 30. Since 2017, the company's sales have declined significantly due to reduced mall traffic and a surge in competing internet sales. Although the company began consolidating its operations in 2019, it was forced to totally shut down operations with the onset of the COVID-19 pandemic in the spring of 2020. When operations re-opened in July, the company had further terminated five of its retail locations. Shortly after, RBC — which had been the company's banker since 1972 — sent the company a demand letter and Notice of Intention to Enforce Security. Given that holiday season sales are critical to the company's financial outlook, the company will wait to file a proposal until after it reviews the financial results of the 2020 holiday season. Rosen Goldberg is the proposal trustee. Counsel is Minden Gross for RBC and Fogler, Rubinoff for the proposal trustee.
Le Château Inc. (TSX:CTU), a Montreal, Quebec-based fashion retailer with a 60-year history and 121 stores across Canada, obtained protection under the CCAA on October 23, listing approximately $125.0 million in liabilities, including $21.2 million in deferred rent owing to landlords, and $81.0 million in assets. In the three-month period up until July 25, the company made $14.7 million in sales across its network of stores and online, down from $50 million in the same period last year. Since 2015, the company's network had already been reduced by almost 50% to adapt to the changing retail landscape and consumer shopping habits. The ongoing COVID-19 pandemic further impacted consumer demand for the company's holiday party and occasion wear, which represents the core of the company's business. Despite re-opening its stores, the company's brick-and-mortar operations continue to be negatively impacted by COVID-19 safety measures. While the company intends to remain fully operational as it liquidates its stores, eventual closures will mean the termination of approximately 1,400 jobs. During these CCAA proceedings, the company will receive interim financing from Wells Fargo Capital Finance Corp. Canada. PwC was appointed monitor. Counsel is Stikeman Elliott for the company, Norton Rose Fulbright for Wells Fargo, Osler for the monitor, McCarthy Tétreault for Gordon Brothers Finance and Fasken for Gordon Brothers and Hilco.
Swimco Aquatic Supplies Ltd. and Swimco Partnership (collectively, the "Swimco Group"), a Calgary, Alberta-based swimwear and clothing retailer, was deemed bankrupt on October 10 after the companies failed to make a viable proposal to their creditors. The Swimco Group lists approximately $8.8 million in liabilities, including $1.2 million to Steve Forseth Enterprises. During the mandated closures, the Swimco Group's only source of revenue was from its online sales. However, that revenue was insufficient to pay ongoing lease obligations or to service Swimco Group's long-term debt. Despite re-opening its stores in late May, sales revenues have not returned to their normal levels and the Swimco Group became unable to meet its payment obligations to various creditors. Deloitte is the proposal trustee. Counsel is Field Law for Swimco Group and Cassels for the proposal trustee.
Okaïdi Canada, the Canadian subsidiary of a French children's clothing retailer, filed an NOI on October 7, listing approximately $15.8M in liabilities. In 2010, the company entered the Canadian market and currently operates 15 stores in Quebec and Ontario. Given the COVID-19 environment and the impact on the retail sector, the company suffered significant losses and a major reduction in its sales. The company will evaluate its restructuring options in the coming weeks, including having discussions with landlords. Richter is the proposal trustee. Counsel is BDG Law for the company and Stikeman Elliott for the proposal trustee.