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Distressed Retail

Distressed Retail
Distressed Retail

As online shopping expands and the impact of COVID-19 continues to be felt, North America’s retail industry is facing financial upheaval with a sustained wave of insolvencies reshaping the traditional consumer retail landscape.

Our leading Distressed Retail practice has advised debtors, lenders, suppliers, service providers, receivers, landlords, court-appointed monitors and other stakeholders in virtually every major Canadian and cross-border retail insolvency proceeding in the last 10 years, including Companies’ Creditors Arrangement Act (CCAA), Bankruptcy and Insolvency Act (BIA) and receivership cases. Our Restructuring & Insolvency lawyers are recognized leaders within Canada and internationally for their expertise in domestic and cross-border insolvency matters generally.

We leverage our national platform and extensive experience to deliver fully integrated advice to clients in every major jurisdiction to retain our status as a trusted insolvency counsel. Our national team also works collaboratively with U.S. and international law firms on multijurisdictional matters to ensure our common clients receive the highest quality of service in a timely, efficient and cost-effective manner. Through creative problem-solving, we identify strategic solutions and maximize value for our clients as they navigate complex restructuring matters.

Recent Experience
  • Sears CCAA Proceedings A significant group of unsecured creditors and prominent inventory suppliers holding millions of dollars of claims in the Sears Canada CCAA proceedings, as well as the pension plan administrator in respect of the C$260-million pension claim. Sears was one of Canada’s largest multi-format retailers that employed approximately 17,000 people at 225 stores across Canada prior to its CCAA proceedings.

  • Toys “R” Us Bankruptcy The debtor-in-possession (DIP) agent in connection with the US$2.3-billion DIP facility to Toys “R” Us Canada and its U.S. parent. In this complex cross-border proceeding, Toys “R” Us Canada, the largest dedicated toy and baby products retailer in Canada, filed for bankruptcy protection under Chapter 11 in the U.S. along with its larger corporate family. It also separately filed under the CCAA in Canada. Toys “R” Us Canada successfully sold its business as a going concern, and the DIP facility was paid in full.

  • AllSaints Insolvency ProceedingsAllSaints USA in connection with its coordinated cross-border insolvency proceedings in England, Canada and the United States. AllSaints is a U.K.-based fashion brand with over 125 stores and 3,000 employees around the globe. AllSaints commenced company voluntary arrangement (CVA) proceedings in the U.K., which were successfully recognized by the Ontario court. This appears to be the first time that CVA proceedings have been recognized in Canada.

  • Target CCAA Proceedings The largest group of suppliers to Target Canada in its CCAA proceedings. Third- and related-party claims in the case totalled approximately C$7-billion. Blakes lawyers served on a court-appointed consultative committee formed of senior practitioners who represented key stakeholders in the case. With the support of the committee, Target Canada entities ultimately submitted a plan that received the unanimous support of creditors.

  • Express Wind-Down The court-appointed monitor of Express Canada in the orderly wind-down of its Canadian business. With the assistance of the monitor, Express Canada negotiated a successful plan with its landlords that paid all other unsecured creditors in full.

  • Linens ‘n Things Wind-DownLinens ‘n Things Canada in the wind-down of its Canadian operations. In this coordinated cross-border proceeding, a court-appointed receiver sold the Canadian business assets for a substantial recovery, resulting in virtually all secured and unsecured creditors of the Canadian entity being paid in full.

  • American Apparel Liquidation and ExitAmerican Apparel Canada Retail Inc. and American Apparel Canada Wholesale Inc. in the liquidation, wind-down and exit of the American Apparel entities from the Canadian market, following the insolvency of their U.S. parent companies.

  • Mexx Restructuring Proceedings The senior secured lender of Mexx Canada Company in its international restructuring proceedings that included the liquidation of all of the company’s 95 Canadian stores.

  • Blockbuster Receivership Proceedings The purchaser of Blockbuster’s U.S. business in connection with the receivership proceedings of Blockbuster Canada. This case had unique issues involving the continued use of the Blockbuster trade­mark by the court-appointed receiver in Canada. The matter was resolved consensually through extensive negotiations in both New York and Toronto.

  • Boutique Jacob CCAA Proceedings The DIP lender in the CCAA restructuring proceedings of Boutique Jacob Inc. In this case, the DIP financing was converted into exit financing upon termination of the CCAA proceedings. Post-CCAA proceedings, Blakes continued to act for the lender in its capacity as senior secured lender in the subsequent restructuring proceedings under the BIA, which saw Jacob close all but five of its nearly 100 Canadian stores.

  • Athletes World CCAA RestructuringAthletes World Limited in connection with its successful restructuring pursuant to a plan under the CCAA, following its acquisition by a strategic purchaser. Athletes World was a national sporting goods retailer with 138 stores when it filed for CCAA protection.

  • Chocolaterie Bernard Callebaut Insolvency Proceedings The receiver of Chocolaterie Bernard Callebaut Group in its insolvency proceedings. In this case, Blakes obtained a significant contempt order against the former principal of the debtor company.

  • Sterling Shoes CCAA ProceedingsSterling Shoes Inc. in its CCAA proceedings. Sterling Shoes was a footwear retailer operating 160 retail stores in five provinces across Canada and employing 1,100 people. The bulk of Sterling Shoes’ business was ultimately sold to Town Shoes.

  • DumoulinCCAA FilingDumoulin Group Inc., also doing business as Audiotronics, in connection with its CCAA filing. When it filed for CCAA protection, Dumoulin Group was one of the largest electronic retailers in Canada. Dumoulin Group ultimately liquidated its assets.

  • CPI Receivership Proceedings The U.S.-based senior secured lenders in the CPI Portrait Studios receivership proceedings who were owed approximately C$100-million. CPI operated portrait studios in two of North America’s largest department store chains. After a failed sale process for the Canadian business, the parties formulated an alternate going-concern solution by way of a management buyout.

Awards & Recognition

Members of our Distressed Retail group are recognized as leaders in the most recent editions of the following prominent national and international industry directories and rankings:

  • Chambers Global: The World’s Leading Lawyers for Business

  • Chambers Canada: Canada’s Leading Lawyers for Business

  • IFLR1000: The Guide to the World’s Leading Financial and Corporate Law Firms

  • The Lexpert Guide to the Leading US/Canada Cross-Border Corporate Lawyers in Canada

  • The Lexpert Guide to the Leading US/Canada Cross-Border Litigation Lawyers in Canada

  • The Canadian Legal Lexpert Directory

  • Who’s Who Legal

  • Legal Media Group’s Guide to the World’s Leading Lawyers in Banking, Finance and Transactional Law

  • Benchmark Canada: The Definitive Guide to Canada’s Leading Litigation Firms and Attorneys

  • The Best Lawyers in Canada

  • The Legal 500 Canada