Solo Liquor Stores, a Calgary, Alberta-based liquor retailer, was placed in receivership on May 1 on application by ATB Financial, owed approximately $29.5MM. Founded in 1996, the company has grown to become the largest private liquor retailer in Alberta with over 40 locations across the province. The company has been experiencing significant cash flow issues for a number of months and was in default on its loans to both ATB and Crown Capital. Pursuant to a forbearance agreement with ATB, the company engaged Eight Capital to run a sales process for the business but no transaction was completed. Anticipating a shortfall on its loan, ATB decided that the appointment of a receiver would be the most efficient and cost-effective manner to maximize recoveries. FTI was appointed receiver. Counsel is Blakes for the applicant, McCarthy Tétrault for the company, Torys for the receiver and MLT Aikins for Crown Capital.
9449167 Canada Inc., operating as a Shell gas station in Cornwall, Ontario, was placed into receivership on March 29 on application by BDC. MNP was appointed receiver. Soloway Wright is counsel for the applicant.
Green Earth Stores and Green Earth Environmental Products, a Canadian specialty retailer of giftware, jewellery, collectibles and environmentally friendly products, which operates 29 stores across Canada, filed an NOI on March 4. As a result of the financial difficulties suffered due to reduced mall traffic and increased online competition, the London, Ontario-based Green Earth entities made the decision to conduct a store closing process commencing on March 8. On March 7, the Green Earth entities obtained court approval of, among other things, a Liquidation Process Order. The company has engaged FAAN Advisors Group as their chief restructuring advisor to assist with the NOI and store closure process. Crowe Soberman is the proposal trustee. Counsel is Miller Thompson for the company and Stikeman Elliott for the proposal trustee.
Payless ShoeSource Canada, the Canadian subsidiary of the American discount footwear retailer, which operates 248 stores across Canada, obtained protection under the CCAA on February 19. The Payless Canada entities owe approximately $156.7MM (USD) under an ABL Credit Facility to which they are guarantors. Coinciding with the commencement of the CCAA proceedings in Canada, certain affiliates of the company filed for Chapter 11 bankruptcy protection in the US. Payless Holdings and other subsidiaries (the "Payless Group") had previously filed for Chapter 11 bankruptcy in 2017. The Payless Group also applied to the Ontario Superior Court of Justice as the foreign representative. Both the Canadian court and the US Bankruptcy Court approved a reorganization, which was effective as of August 2017. Despite these proceedings, the Payless Group has been unable to sustain profitable operations in the current retail environment. Although the Group sought to deleverage their balance sheet and implement cost-reduction by downsizing their corporate offices, terminating various employees and reducing their capital expenditures plan, its North American brick and mortar business continues to experience top-line sales decline. Despite efforts to negotiate with Payless Group's pre-petition lenders for additional credit, the Payless Canada entities have been unable to return to profitability, reporting a net operating loss of more than $12.0MM (USD) in 2018. As a result of the financial difficulties suffered, the Payless Canada entities are insolvent and unable to meet their liabilities as they become due. Since January 2019, Ankura Consulting Group, a consulting and financial advisory firm, has been engaged to act as Chief Restructuring Organization ("CRO") and provide advisory services to the US debtors, including the Payless Canada entities. The Payless Canada entities, which intend to seek court approval of a liquidation approval order, have also engaged Malfitano Advisors to assist as an asset disposition advisor. Together, they conducted a solicitation and bidding process for a liquidator which ultimately led to the selection of Great American and Tiger Capital Group as joint liquidators. Many of the Canadian stores will begin closing at the end of March. FTI Consulting was appointed monitor. Canadian counsel is Cassels Brock for the Payless Canada entities, Bennett Jones for the monitor, Norton Rose Fulbright for the ABL Agent, Wells Fargo Bank, Fasken for an ad hoc group of lenders and Stikeman Elliott for the liquidators.
RMK Investments, a Vancouver, British Columbia-based company that sells and installs the Hunter Douglas brand of home interior blinds and custom-made draperies which were sold exclusively through the Hudson's Bay ("HBC") Department stores, filed a proposal on January 21, listing $882.6M in liabilities, including $307.5M to Hunter Douglas Canada. Under the terms of its contract with HBC, the company was not allowed to perform any of its own direct marketing to customers. Previously, the company had the advantage of selling the Hunter Douglas brand of blinds which were not available to much of the competition. This allowed the company to operate its business on a high volume and high margin basis. In the past several years, however, big box retailers such as Costco and Home Depot also began to sell the Hunter Douglas brand of blinds. The increased competition and existing marketing constraints on the company reduced its margins, ultimately resulting in negative profitability. The company will cease operations on January 31. The Bowra Group is the proposal trustee.
Gymboree Group, a San Francisco, California-based chain of specialty retail stores for children’s apparel with operations across the US, Canada and Australia filed for bankruptcy under Chapter 11 in the United States Bankruptcy Court on January 17. Concurrently, Gymboree ("Gymboree Canada" or the "Company") filed an NOI on January 17, listing $9.4M of liabilities, including $8.9M of liabilities that are owed to entities that are subsidiaries of the Gymboree Group. The Company operates 49 retail stores in Alberta, British Columbia, Manitoba, Nova Scotia and Ontario. A group of agents including Great American, Tiger, Gordon Brothers, and Hilco (the "Agents") will be leading liquidation efforts across the US and Canada. KPMG is the proposal trustee. Counsel is Norton Rose Fulbright for the Company, Osler for the proposal trustee and Cassels Brock for the Agents.
C & E Canada, the Canadian operating entity of the Crabtree & Evelyn group of companies, an international retailer of body, fragrance and home care products with a global network of stores, filed an NOI on November 28, listing $15.2MM in liabilities, including $3.1MM to Crabtree & Evelyn US. The company, which operates 19 retail stores in Quebec, Ontario, British Columbia and Alberta, has been experiencing significant losses over the last several years, which it attributes to changing consumer demand for new product items; the rise of e-commerce; and long-term declines in traditional retail traffic and productivity. After conducting an analysis of store performances, the company has determined that it would be in the best interest of all its stakeholders to proceed with an orderly liquidation of its inventory and other assets. Gordon Brothers will be leading the liquidation efforts. Richter is the proposal trustee. Osler is counsel to the company.
Gestion Maison Éthier and Gestion Immobilière Maison Éthier, which operate household furniture stores in Saint-Jean-sur-Richelieu and Saint-Basile-le-Grand, Quebec, filed an NOI on November 9 and KPMG was appointed proposal trustee. Desjardins, owed approximately $14.0MM, eventually filed a motion for the appointment of a receiver to liquidate the assets of Gestion Maison Éthier. In response, the two companies filed a concurrent CCAA application to submit a preliminary restructuring plan to the court that would benefit the mass of creditors. On November 15, the court allowed the companies to continue their reorganization proceedings under the CCAA. KPMG was appointed monitor. The companies owe approximately $5.5 to BDC and $7.9MM to their other creditors. In 2016, Sylvain Bonneau and François Éthier acquired Maison Éthier for $19.0MM. Not only did they find this transition challenging, the rising popularity of online furniture and mattress retailers such as Casper, Endy and Wayfair also contributed to their considerable decline in margins. Counsel is Gilbert, Séguin & Guibault Avocats for Desjardins, Gowlings for BDC, Fasken for Fédération des Caisses Desjardins, Blakes for the monitor and Groleau Gauthier Plante for the companies.
Dans un Jardin, a Montreal, Quebec-based retailer specializing in bath products, along with its manufacturing subsidiary Art de Vivre Fabrication, filed an NOI on November 19, listing $13.8MM in liabilities, including $11.4MM to Investments Sylpama. The company, which has a 35-year history and owns 55 stand-alone boutiques, attributes its decision to increasing competition and a significant reduction in sales over the years. Although the company attempted to ameliorate its financial situation by reducing overhead costs, cutting the salaries of managers, and closing its least profitable stores, these measures were ultimately unsuccessful. In order to liquidate its inventory, the company will hold warehouse sales in Quebec City, Longueuil and Gatineau. Richter is the proposal trustee.
Fluid Brands, the Toronto, Ontario-based parent company of Bowring and Bombay, home interior and decor retail store chains, filed an NOI on October 25, listing approximately $50.0MM in liabilities, including $23.5MM to CIBC and $14.8MM to Isaac Bennet Sales Agencies. The company acquired the Bombay and Bowring businesses in 2014 through a prior restructuring of those businesses pursuant to the CCAA but has not been able to turn the businesses around: Bombay lost approximately $3.1MM in the last year and Bowring lost $1.9MM during the same period. These operating losses, coupled with service of demands for repayment by certain of the company's secured creditors, resulted in the company filing an NOI. This will be the third insolvency restructuring for the Bombay chain of stores and the second insolvency restructuring for the Bowring stores. Over the next 60 days, the company intends to liquidate as much inventory as possible and to close certain locations as inventory levels drop. The company will assess the results of the holiday season liquidation before determining what its ultimate proposal to creditors will be. Merchant Retail Solutions and Gordon Brothers will be spearheading the inventory liquidation process. CIBC will be providing a DIP loan during the proposal proceedings. Richter is the proposal trustee. Counsel is Torkin Manes for the company, Gowlings for CIBC, BLG for Isaac Bennet Sales Agencies and Osler for the proposal trustee.