WATCH: It’s been just over a week since 17,000 Canadians found out they’ll lose their jobs as Target pulls out of Canada. Now, we have a long list of creditors that Target owes money to, including food banks. Vassy Kapelos explains.
Chapman’s Ice Cream is owed $19,987. Coca-Cola Canada is hoping to recoup at least a portion of the $339,699 owed to it by Target Canada, which filed for bankruptcy protection last week.
The City of Winnipeg is owed more than $14,000, while Target’s Canadian arm is in arrears with the central Ontario city of Barrie to the tune of nearly $195,000.
A 45-page document included in the U.S. retail giant’s Canadian filing last week reveals a very—very—long list of companies, suppliers, landlords even municipalities and governments that the departing department store chain owes billions to.
All told, Target Canada owed roughly $5 billion to creditors when it filed for bankruptcy under the Companies’ Creditors Arrangement Act in an Ontario court last Thursday. That amount makes it likely one of the largest bankruptcies in Canadian history, experts suggest, certainly in the retail industry.
“It’s got to be one of the bigger ones, in terms of the size of the debt,” a lawyer source said, asking not to be named because her firm is part of the proceedings.
Target also owes landlords and governments sizable amounts of money. Hillcrest Mall Management Inc., a property company in Ontario who owns the real estate housing at least one Target store, is owed $1.7 million.
The Canada Revenue Agency and provincial governments are similarly owed millions in taxes. Target Canada’s unpaid tax bill from the CRA is $12 million. The B.C. and Quebec governments are owed $2.6 million and $6.5 million, respectively.
“You charge your customers HST on behalf of the government, with the idea you’re supposed to remit that over,” Vanessa Ibe, a lawyer at Toronto-based Rosenbaum & Frank, said.
But a bankruptcy filing freezes out all creditors from collecting on what they’re owed until a judge approves a repayment plan.
Target Canada lists the value of its assets as being about the same as its liabilities, with its 137 store leases as well as merchandise inventory and some real estate set to be sold off very soon.
The proceeds from those sales will go to paying off creditors, though it’s far from certain whether the money it gets will be enough to pay 100 cents on the dollar of what it owes.
Lawyers for the Canadian arm of the U.S. department store chain have until mid-February to file details about how the failed chain will pay its creditors.
WATCH: Target is closing shop in Canada. Retail Marketing Strategist Andrew Sharpe joined Aaron McArthur on Prime to discuss why Target failed in Canada.