Le Château Obtains Court Order for CCAA Protection

October 26, 2020

Source: Yahoo Finance

Le Château Inc. (TSX VENTURE: CTU) ("Le Château" or the "Company") announces today that, further to its news release issued this morning and the completion of proceedings before the Québec Superior Court (Commercial Division) (the "Court"), the Company has obtained an Initial Order (the "Order") pursuant to the Companies' Creditors Arrangement Act (the "CCAA") in order to proceed with the orderly liquidation of its assets (the "Liquidation") and wind down of its operations.

Under the terms of the Order, Gordon Brothers Canada ULC and Merchant Retail Solutions ULC have been appointed as the Company's consultants to implement the Liquidation and PricewaterhouseCooper Inc. has been appointed as monitor to the Company in these CCAA proceedings (the "CCAA Proceedings") to oversee the Company's operations during the Liquidation.

Further, the Company obtained 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 addition, the Company has received an order from the Court allowing the Company 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 having filed for protection under the CCAA, it is expected that the Company's exchange listing and tier classification will soon be downgraded from the TSX Venture Exchange to the NEX Board of Exchange.

The Company will provide further updates on these matters once more information is available. The full text of the Order will be available on the website of the Monitor at https://www.pwc.com/ca/en/services/insolvency-assignments.html.

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.

 

 

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