Le Château seeks creditor protection
pursuant to the CCAA to ensure a responsible, controlled and
orderly liquidation of its assets
MONTRÉAL, Oct. 23, 2020 /CNW
Telbec/ - Le Château Inc. (TSX VENTURE: CTU) ("Le Château"
or the "Company") filed today an application
(the "CCAA Application") pursuant to the Companies'
Creditors Arrangement Act ("CCAA") seeking protection of
the court in order to proceed with the orderly liquidation of its
assets (the "Liquidation") and wind down of its operations.
The CCAA Application will be heard by the Superior Court of
Quebec (Commercial Division) (the
"Court") today. It is expected that Gordon Brothers Canada
ULC and Merchant Retail Solutions ULC will be appointed as the
Company's consultants to implement the Liquidation and that
PricewaterhouseCooper Inc. will be appointed as monitor to the
Company in these CCAA proceedings (the "CCAA Proceedings")
to oversee the Company's operations during the Liquidation. It is
expected that the current six directors of the Company will remain
on the Company's Board of Directors to assist with the
Liquidation.
If the CCAA Application is granted, the Company will obtain
interim (DIP) financing from Wells Fargo Capital Finance
Corporation Canada which will allow the Company to fund its
post-filing working capital requirements during the Liquidation and
the CCAA Proceedings.
Management and the Board of Directors of the Company have come
to the very difficult decision that the Company can no longer
continue its operations as a going concern after having used its
best efforts over the preceding months, with the assistance of
professional advisors, to refinance or sell the Company to a third
party that would continue operating the business. The retail
industry faced numerous challenges due to the ongoing COVID-19
pandemic and the second wave currently hitting our communities
across Canada. Its already evident
impact on consumer demand for Le Château's holiday party and
occasion wear, which represents the core of our offering, has
diminished Le Château's ability to pursue its activities.
Regrettably, these circumstances leave the Company with no option
other than to commence the Liquidation process.
Management and the Board of Directors would like to thank and
recognize its 1,400 employees, including its 500 Head Office
employees, whose dedication, talent and innovation have made Le
Château a proudly Quebec grown
fashion brand for the past 60 years. We also sincerely thank our
900 retail store employees for their passion, loyalty and service.
We regret the impact this will have on our people and can assure
you that we explored all options available to us prior to taking
this difficult decision. We also thank the fashion schools and the
business partners that have been part of our legacy and wish them
continued success in keeping Montréal the fashion centre of
Canada. Most importantly, we thank
the millions of Canadians whom we have had the privilege of serving
over the past 6 decades.
Le Château, headquartered in Montréal, currently has 123 stores
across Canada, in addition to its
e-commerce website. Throughout this Liquidation process, the
Company will remain fully operational, and physical stores are
expected to remain open in conformity with provincial and regional
guidelines.
In light of the foregoing, the Company will also be seeking an
order from the Court allowing it to suspend its obligation to hold
meetings of the shareholders until further order of the Court and
cancellation of the annual and special meeting of the shareholders
of the Company that was initially scheduled to be held this
day.
As a result of the CCAA Proceedings, it is anticipated that the
TSX Venture Exchange (the "Exchange") will undertake a
review regarding the suitability of the Company for listing on the
Exchange, and that the Company's exchange listing and tier
classification will be downgraded from the Exchange to the NEX
Board of Exchange. Computershare Investor Services Inc., the
Company's transfer agent for the Class B voting shares, will remain
in place until further notice.
The Company will provide further updates on these matters once
more information is available.
Neither the TSX Venture Exchange nor its
Regulation Services Provider (as that term is defined in the
policies of the TSX Venture Exchange) accepts responsibility for
the adequacy or accuracy of this news release.
Profile
Le Château is a Canadian specialty retailer
and manufacturer of exclusively designed apparel, footwear and
accessories for contemporary and style-conscious women and men,
with an extensive network of 123 prime locations across
Canada and an e-com platform
servicing Canada and the U.S.
Forward-Looking Statements
This news release may
contain forward-looking statements relating to the Company and/or
the environment in which it operates that are based on the
Company's reasonable expectations, estimates and forecasts.
Forward-looking statements in this press release include, but are
not limited to, statements with respect to the CCAA Application and
CCAA Proceedings, the liquidation process and the downgrade of the
Company's listing and tier classification to the NEX Board of
Exchange. These statements are not guarantees of future performance
and involve risks and uncertainties that are difficult to predict
and/or are beyond the Company's control. A number of factors may
cause actual outcomes and results to differ materially from those
expressed. These factors also include those set forth in other
public filings of the Company. Therefore, readers should not place
undue reliance on these forward-looking statements. In addition,
these forward-looking statements speak only as of the date made and
the Company disavows any intention or obligation to update or
revise any such statements as a result of any event, circumstance
or otherwise except to the extent required under applicable
securities law.
Factors which could cause actual results or events to differ
materially from current expectations include, among other things:
the risks and uncertainties related to the CCAA Proceedings and
Liquidation process, including the ability for the Company to
obtain interim (DIP) financing on acceptable terms during the CCAA
Proceedings, health crises & economic downturn; liquidity
risks; general economic conditions and normal business uncertainty;
competitive conditions in the businesses in which the Company
participates; changes in consumer spending; seasonality; changes in
the Company's relationship with its suppliers; inventory
management; extreme changes in weather; lease renewals and
obligations; information technology security and loss of customer
data; fluctuations in foreign currency exchange rates; interest
rate fluctuations and changes in laws, rules and regulations
applicable to the Company. The foregoing list of risk factors is
not exhaustive and other factors could also adversely affect our
results. The risks and uncertainties faced by the Company are
substantially the same as those outlined in the annual MD&A for
the year ended January 25, 2020.
SOURCE LE CHATEAU INC.
