TORONTO – The head of Goodwill Toronto, Eastern, Central and Northern Ontario has resigned as the company has given up on a financial restructuring plan to avoid bankruptcy.
The company filed for bankruptcy protection earlier this month, following the abrupt closure of 16 outlets that threw more than 400 people out of work.
At the time, the company said it was exploring options for a restructuring plan, but conceded Monday that it had found “no viable option that allows the organization to reemerge from the bankruptcy process.”
READ MORE: Out-of-work Goodwill employees to receive pay following store closures
In the release, Keiko Nakamura also announced her resignation as head of Goodwill TECNO, saying “there is no longer a role for a CEO” since proceedings are now in the hands of a bankruptcy trustee.
The organization has declared debts of $6 milllion, including $4.2 million owed to employees in salary and other obligations.
Bankruptcy expert Douglas Hoyes said Monday’s announcement came as no surprise as the company had only a “slim chance” of pulling off any restructuring plan.
“I don’t know what they were contemplating as a possible restructuring,” he told Global News. “Generally speaking, the longer a business is shut down, the harder it is to restart it. These stores have been closed for over a month, so … I don’t think there was much chance of success.”
READ MORE: Goodwill employees speak out after store closures across Ontario
Nakamura says a revival plan to reopen profitable stores, although feasible, cannot be achieved without significant financial investment and the lack of security for a loan is an untenable risk for potential investors.
The trustee, Pollard & Associates Inc., has called a meeting with creditors for March 2.
Nakamura, who earned upwards of $221,774 last year as Goodwill’s CEO, said she will continue to assist the trustees on a voluntary basis.
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