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This article was published 19/3/2020 (254 days ago), so information in it may no longer be current.
The Nygard Group of companies has been ordered into receivership, after a judge ruled Wednesday it had not acted in good faith with its lenders and an insolvency trustee.
"I am satisfied in light of the materials filed that a receiver should be appointed immediately to take control of the Nygard Group of companies," Manitoba Court of Queen’s Bench Justice James Edmond said.
"I am satisfied… the Nygard Group of companies, regrettably, has not co-operated with the proposal trustee and have not acted in good faith and with due diligence."
U.S. lenders White Oak Commercial Finance and Second Avenue Partners launched receivership proceedings after Nygard — which has corporate headquarters in Winnipeg, New York and Toronto — failed to repay a US$25-million loan.
Edmond adjourned proceedings last week, giving the international clothing manufacturer until March 20 to come up with a repayment plan. However, in affidavits filed this week, White Oak and now-appointed receiver Richter Advisory Group urged Edmond to expedite the matter, arguing Nygard was continuing to breach its obligations to the lender and the court.
White Oak lawyer Jeremy Dacks told court Nygard has made no move to repay extra money White Oak provided to meet company payroll on several occasions, and repeatedly "stonewalled" the trustee’s request it be provided with cash-flow projections.
"If the company is left in charge, they will be bankrupt tomorrow," Dacks said. "Our proposed way forward fixes that for all the stakeholders… The Nygard Group has no plan to fund its operation.
"The company is in chaos, crisis and peril."
Court was told last week the company was in negotiations with finance company Great American Capital to reach a deal that would satisfy its debt to White Oak and Second Avenue Partners. In an affidavit filed Wednesday, Nygard Group director of systems Greg Fenske said that deal fell through.
Nygard closed its stores last week in response to the coronavirus pandemic, but did not notify the court, trustee or White Oak, as was required by the court, Dacks said.
"The fact the stores are closed may be appropriate, the breach is not telling your court officer or lenders what is going on," Dacks said. "We have no clue what happened… to the stores, what happened to the employees. I don’t understand why the company doesn’t say that."
Fenske said the decision was "made quickly" in response to safety concerns and Nygard Group intended to notify the court of the move March 17.
Company founder Peter Nygard announced his intention to divest ownership last month, following the filing of a U.S.-based class-action lawsuit accusing him of orchestrating a sex-trafficking ring.
Dacks said communications between Nygard Group and White Oak, the trustee and court show Peter Nygard is still holding the reins of power.
"The person we were told has resigned, clearly, is the only one in control here," Dacks said.
Someone once said a journalist is just a reporter in a good suit. Dean Pritchard doesn’t own a good suit. But he knows a good lawsuit.