Tracy Sandler
Mar 4, 2016
After filing for court protection almost 14 months ago, Target Canada has reached a settlement with its former landlords whose leases were terminated as part of Target Canada's wind-down under the Companies' Creditors Arrangement Act (Canada) (CCAA).
According to Marina Strauss’s article in The Globe and Mail, Target Canada has completed a deal which offers a framework to create a recovery plan for creditors and requires Target Corp., the retailer’s U.S. parent, to “make an undisclosed payment to landlords to replace the guarantees that the parent had made to some lawyers to cover future losses in the event that the Canadian division faltered.” The landlords will release Target Corp. from the guarantees in exchange.
The monitor supervising Target Canada’s insolvency proceedings under the CCAA estimates a range of recovery for unsecured creditors of approximately 66% to 77%.
Tracy Sandler, a partner in Osler’s Insolvency & Restructuring Practice Group and counsel for Target Canada, comments on the agreement, “[w]e are pleased that we were able to negotiate an outcome that preserves meaningful value for creditors of Target Canada, avoids protracted litigation and is supported by the monitor. Target Corp. has demonstrated its commitment to a global resolution of the CCAA proceedings through subordination of its claims in the estate and additional cash contributions.”
Tracy notes that each member of the court-appointed consultative committee, which is made up of Target Canada’s key creditor representatives, supports the filing of the amended plan.
For more information on Target Canada’s settlement, read Marina Strauss’s article “Target Canada reaches deal with former landlords,” March 4, 2016.