Before Target officially exits Canada, it will have to answer a few questions–mainly from its suppliers.
Last month, Ontario Superior Court justice Geoffrey Morawetz ruled Target’s suppliers had until March 2 to provide questions to the insolvency monitor and Target Canada.
The Toronto Star reported these questions were limited to goods shipped in the 30 days before insolvency was declared, inventory orders while creditor protection was being considered, and issues related to the timing of the discussion about or the decision to seek creditor protection.
Law firm Blaney McMurty was tasked with collecting the questions.
“Our goal is to bring stakeholders and creditors together with a view to collaboration and to create a committee of creditors to participate in the insolvency process undertaken by Target Canada,” states a note on the law firm’s website. “Strength in numbers with your input will stand to improve legal proceedings for your organization.”
The complete list of questions can be found on the firm’s website. Target must answer them by March 16.
Among the questions: “When did Target Canada first advise its banks that it would not be honouring suppliers’ cheques?”
Target Canada owes hundreds of companies a combined $3.4 billion.
On top of this, Target Canada now owes $1.9 billion to a property company it created.
According to the Blaney company blog, Target Canada subleased its properties to Target Canada Property (Target Propco). Target Canada was required to make payments to Target Propco for rent.
As a result of breaking those leases early, Target Canada is required to pay Target Propco a termination fee.
“The dilemma that faces the suppliers, of course, is that a $1.9 billion inter-company claim is now added to the liabilities of Target Canada, which essentially swamps the suppliers’ claims totaling approximately $400 million,” read the blog.
