Canada: Target Stores Insolvency Biggest In Canadian Retail History: Creditors Working Together To Win Equitable Settlement

The biggest insolvency in national retailing history, Target stores' Canadian subsidiary, is scheduled to take key steps on the road to resolution this month and over the summer.

Target Canada applied for protection under the Companies' Creditors Arrangement Act (CCAA) last January 15 so that it could restructure and liquidate. It then closed all its 133 stores, eliminating the jobs of more than 14,000 employees and leaving its landlords and almost 1,800 other suppliers on the hook for close to $3 billion. 

Blaney McMurtry, led by commercial litigation partner Lou Brzezinski, has been intimately involved from the beginning in the effort to assure that the insolvency process is efficient and orderly and that Target Canada's creditors recover the greatest possible share of what they are owed. 

Mr. Brzezinski and Mel Solomon of Toronto-based commercial litigation counsel Solomon Rothbart Goodman LLP were appointed May 11 by Ontario Superior Court Senior Regional Justice Geoffrey Morawetz to a court-ordered "consultative committee" with which the insolvency monitor is obliged to consult "regarding the claims process." 

(The monitor, restructuring and insolvency specialist Alvarez & Marsal Canada, is tracking Target Canada's ongoing operations and is supporting the filing of, and creditors' voting on, Target Canada's proposal for paying the debt it owed when it made its initial court filing. It has met with Blaneys and Solomons a number of times.) 

When it applied for CCAA protection last winter, Target Canada owed approximately $2.4 billion to governments, suppliers of goods and services and employees. It has since established a trust to meet its pay and severance obligations to all employees.

The biggest chunk of the debt, $1.9 billion, is owed to Target Canada Property LLC (Target Propco), which financed Target Canada's leases. (Target Propco is wholly owned by Target Canada's parent company, Target Corporation of Minneapolis.)

Target Canada's debt to its landlords may be smaller than thought originally. It has been determined that a number of the leases were guaranteed, and must be paid, by its American parent. This could mean the Canadian company will have more money available to meet other obligations.

At present, Target Canada has approximately $720 million available to meet all obligations. The company raised some of this money by liquidating inventory and other assets and by selling some leases back to landlords.

It has until June 30 to sell whatever remaining leases other retailers and other purchasers might want to buy.

Meanwhile, the court has ordered the monitor to develop, in discussion with the consultative committee, a "comprehensive claims process" that will spell out how all claims will be presented and resolved and will detail all inter-company claims, such as Target Propco's claims for compensation from Target Canada for abandoned leases. 

The monitor circulated the draft process among stakeholders May 2 and the court was to hear arguments June 11 on the monitor's motion that the process be approved.

Once the comprehensive claims process has been approved, the court will be in a position to hear motions on the establishment of ad hoc creditors' committees to represent creditors in their efforts to get paid what they are owed. Both Blaneys and Solomons have already put forward such motions. 

Blaneys, on behalf of seven Target Canada creditors, including Nintendo of Canada, Universal Studios Canada, and Mars Canada, has asked that an ad hoc suppliers' committee be established to represent all creditors in relation to Target Canada's $1.9 billion debt to Target Canada Property LLC. 

Blaneys is of the view that ad hoc creditors' committees increase the efficiency of the insolvency process, protect and advance creditors' interests, minimize fees and expenses and add value for all stakeholders.

The committee would argue that the inter-company claim should be extinguished or put behind the claims of unsecured creditors by virtue of the 'doctrine of equitable subordination' or to extinguish the intercorporate claim by consolidating the two estates into one by way of substantial consolidation.

Blaneys established a special dedicated website last winter ( to provide a "landing spot" for Target Canada suppliers. It uses the website and such social media as Facebook and Twitter to update interested parties on the most recent developments. Law firms do not commonly drive the creation of ad hoc creditors' committees. Blaneys' initiative has been considered something of an innovation. 

Solomons, on behalf of ISSI Inc., a supplier of baby products, has asked the court to establish an ad hoc committee of suppliers of 30-day goods. These firms are seeking to recover goods shipped between December 15, 2015 and January 15, 2015 in priority over other unsecured creditors.

The ad hoc suppliers' committee motions will not be heard until the inter-company claims and dispute processes have been decided upon in July and August.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Events from this Firm
8 Nov 2018, Conference, Toronto, Canada

This year’s program is entitled “An Analysis of Fidelity Claims for the Modern World.” The program will address important substantive and practical issues germane to today’s fidelity claims handling.

In association with
Related Topics
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions