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Retail

Type of assignment: Companies Creditors Arrangements Act

Region: Canada
RSM firm: RSM Richter, Canada
RSM contact: Robert Kofman

Company Circumstances

The company operated a 300-store chain of owned and franchised dollar stores. The owned stores generated significant losses, while the core franchise locations were profitable and saleable.

Scope of the assignment

Under the supervision of RSM, the company was to eliminate money-losing operations at the outset of the restructuring and sold the core business on a going-concern basis. The transaction was completed after the company operated profitably in CCAA for 8 months.

Outcome

As a result of the cost cutting steps implemented at the outset of the proceedings the franchise network was preserved and the business continued. Secured creditors were repaid in full and unsecured creditors received a distribution. RSM saw the opportunity to salvage value by quickly eliminating the money-losing operations and selling the core franchise business once surplus costs and inefficiencies were eliminated.