Nygard companies plan to seek bankruptcy protection in Canada
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Hey there, time traveller!
This article was published 10/03/2020 (1182 days ago), so information in it may no longer be current.
The group of companies founded by Peter Nygard will seek protection under the Canadian Bankruptcy and Insolvency Act amid mounting sex crimes allegations against the Winnipeg fashion mogul.
A spokesman for the group of companies said Tuesday the move is designed to facilitate a corporate restructuring and does not mean it is declaring bankruptcy or in receivership.
Nygard, 78, announced his intention to divest ownership from the companies in late February amid the sexual misconduct scandal and various legal troubles.
The companies filed a notice of intention to file a proposal under the Canadian Bankruptcy and Insolvency Act, according to a written statement sent to the Free Press.
“The company is committed to positioning itself for long-term financial stability and is developing a restructuring plan that is acceptable to the company’s various stakeholders,” the statement reads.
“In the interim, it is ‘business as usual,’ at the company and at its retail stores.”
Nygard is the subject of an ongoing U.S. federal law enforcement investigation led by a joint child-exploitation task force. Agents with the Federal Bureau of Investigation and detectives with the New York Police Department raided his international headquarters in Times Square Feb. 25.
He is also the subject of a class-action lawsuit filed in the United States District Court for the Southern District of New York on Feb. 13 by 10 women who claim he drugged, raped and sodomized them.
The law firm handling the class-action suit said 50 women have since come forward with similar allegations of abuse. The accusations span five countries, three continents and four decades.
Nygard, through his attorneys, has repeatedly maintained his innocence. He claims he’s the subject of an elaborate conspiracy to ruin his reputation by people with a personal vendetta against him.
“Over the past month, the company has been maliciously battered as a result of actions that were predicted in Nygard’s RICO lawsuit against billionaire Louis Bacon,” the statement reads.
“The lawsuit alleges that people were paid to make false statements and accusations about Peter Nygard, for the purpose of ruining him and his business.”
Bacon, an American hedge-fund billionaire, is Nygard’s neighbour in the Bahamas, where both men own estates in the exclusive, gated community of Lyford Cay.
The men have a highly publicized feud which has turned increasingly vitriolic, spawning more than two dozen lawsuits and accusations of insider trading, murder plots and membership in the Ku Klux Klan.
“This was further revealed in a New York Times article which, despite publishing the heinous and vicious allegations as the lead to its fake news story, acknowledged the credibility of the witnesses was suspect,” the statements reads.
“With the paid-for lawsuit against Nygard, the unfair publishing of the New York Times article and the devastating media onslaught that merely republished the heinous allegations, damage was certain to occur.”
Jillian Taylor-Mancusi, a licensed insolvency trustee, said Tuesday’s announcement from the Nygard companies is a common strategy when a corporation finds itself in crisis.
It will give the company the breathing room needed to put together a proposed debt-repayment plan and will temporarily put a halt to anyone taking collection against it, she said.
“There is a stay of proceedings as soon as you file that notice of intention. It gives you time to put together the details of your proposal, to figure out your cash flow,” Taylor-Mancusi said.
The group of companies is likely to call a creditors meeting in the coming weeks where they will present their proposal, she said.
If the proposal is accepted by the creditors, the matter will then go before the courts. If not, it could push the companies into bankruptcy, she said.
In the statement, the spokesman said the group of companies is creating a restructuring plan to “protect the livelihood of (its) thousands of dedicated employees.”
“A successful restructuring will ensure the long-term viability and continuing operations of the company,” the statement reads.
Ryan Thorpe likes the pace of daily news, the feeling of a broadsheet in his hands and the stress of never-ending deadlines hanging over his head.
Updated on Tuesday, March 10, 2020 4:18 PM CDT: updates story, updates formatting