Hart Stores Obtains Approval for Plan of Arrangement Under CCAA
Hart Stores Inc. announced that the Quebec Superior Court granted an Order authorizing Hart Stores to file a Plan of Arrangement under the Companies’ Creditors Arrangement Act (Canada) (CCAA). The Plan of Arrangement calls for Hart Stores to make payments totaling $6 million over three years to the Monitor (RSM Richter Inc.) under the CCAA, for distribution to Hart Stores’ creditors. Under the plan, creditors may elect to receive their pro rata share of the $6 million, or a lump-sum payment equal to the lesser of the value of their claim or $1,000.
Hart Stores will call a meeting of creditors to vote on the Plan of Arrangement, expected to be held in February. If the Plan of Arrangement is approved by creditors at the meeting, it will be presented to the Quebec Superior Court for ratification.
The order also extended to March 14, 2012 the period during which all proceedings on the part of Hart Stores’ creditors are stayed. This is a further extension of the stay period initially granted by the Superior Court on August 30, 2011. The order also granted a concurrent extension to March 14, 2012 of the maturity date of Hart Stores’ interim credit facility with Wells Fargo Capital Finance Corporation Canada.
Hart Stores also announced that it has entered into a commitment letter with CIBC Asset-Based Lending for a secured credit facility of up to $25 million. The new credit facility is intended to replace Hart Stores’ existing credit facility with Wells Fargo Capital Finance Corporation Canada, in order to fund the company’s operations upon completion of its financial restructuring under the CCAA.
The new credit facility with CIBC Asset-Based Lending is conditional upon numerous factors, including execution of appropriate legal documentation and registration of security, termination of Hart Stores’ existing credit facility with Wells Fargo Capital Finance Corporation Canada, CIBC’s satisfaction with the Plan of Arrangement and the other terms and conditions of Hart Stores’ exit from CCAA proceedings, and the obtaining by Hart Stores of all necessary creditor and court approvals relating to the Plan of Arrangement on terms and conditions satisfactory to CIBC.
RSM Richter Inc. has been appointed Monitor pursuant to the Initial Order of the Quebec Superior Court.
Hart Stores Inc. operates a network of 88 mid-sized department stores of which 28 stores have been slated for closure in early 2012, under the Hart, Bargain Giant and Geant des Aubaines banners.
Previously on abfjournal.com: