MONTRÉAL, Oct. 23, 2020 /CNW
Telbec/ - 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.
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 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, 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.
