TORONTO — Suppliers of Target Canada are gearing up for a battle over a $1.9-billion claim from the insolvent retailer that could determine how much is paid out to a long list of creditors.
Court filings show that Target Canada says it owes an “early termination payment” to Target Canada Property LLC, the property management company it established to hold the retailer’s real estate assets.
The claim makes a wing of Target Canada the largest creditor in its own proceedings. Suppliers are worried that could eat up all the $400 million they claim to be owed in the insolvency.
“We absolutely intend to challenge the $1.9-billion claim,” Lou Brzezinski, a partner at Blaney McMurtry, told reporters on Thursday after the latest court proceedings in the wind down of Target Canada.
Brzezinski, who represents five suppliers who say they’re owed about $10 million, explained to the court that his clients are concerned about the lack of information in Target’s claim, pointing out that financial details provided in court documents have been mostly redacted.
Justice Geoffrey Morawetz of the Ontario Superior Court agreed more details should be provided to creditors, and that the court-appointed monitor needs to engage in a “vigorous and thorough” review of the windup.
“This has to be a very full, transparent process not run by Target Canada,” Morawetz said.
He added “creditors have to be satisfied” that claims made by Target’s former property company have gone through a vetting process.
The relationship between Target Canada and its suppliers, a variety of companies that provided goods and services to the retailer, have been strained over the past few months. Some claim Target Corp. may have benefited from the timing of the decision to exit Canada.
Target Corp., the parent company headquartered in Minneapolis, Mn., announced in January that it would shutter its 133 stores across the country after determining it would take years to turn a profit.
The decision set into motion court proceedings that have, so far, overseen the liquidation of its stores, and will also determine what happens to outstanding property leases and money owed to creditors.
On Thursday, Morawetz approved the sale of 11 Target Canada leases to landlords Oxford Properties Corp. and Ivanhoe Cambridge.
Follow @dj_friend on Twitter.
Do you have a news tip or a story idea?
Send it our way!