A court-appointed receiver has been given the green light to begin liquidating the assets and inventory of the embattled Nygard Group of companies.
Manitoba Court of Queen’s Bench Justice James Edmond approved a motion Wednesday by receiver Richter Advisory Group to begin selling off the assets at a date yet to be determined.
"I am satisfied that the receiver has acted reasonably and with a view to securing the best possible price for the large quantity of retail inventory and multiple leased locations," Edmond said.
The Nygard Group of companies was ordered into receivership last month after Edmond ruled it had not acted in good faith with its lenders and an insolvency trustee.
U.S. lenders White Oak Financial 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.
Under its proposal, Richter will receive the assistance of a consultant group of companies that will help co-ordinate "store closing or similar themed liquidation sales of all inventory at all retail stores."
Richter will receive 1.75 per cent of gross proceeds, while the consultant will assist in the sale of all store furniture, fixtures and equipment, receiving 17.5 per cent of the proceeds.
"I am satisfied that the consultant described by the receiver has extensive experience respecting the liquidation of inventory in the retail sector and is able to provide advice to the receiver respecting ongoing discussions with the parties that may be interested in purchasing (the companies)," Edmond said.
According to Richter, efforts to sell the business, either in whole or in part, have "not yielded any tangible results to date," Edmond said.
"A sale of the business as a going concern is usually in the best interest of all stakeholders to maximize the return," Edmond said. "Given the present circumstances, it is unlikely that there are other bidders that may come forward at this time."
Restrictions connected to the COVID-19 pandemic prevent setting a start date for any liquidation sales, which "may be timed differently, depending upon the region," Edmond said.
The Nygard Group of companies, already in financial distress, went into freefall after founder Peter Nygard was hit with a U.S.-based class-action lawsuit in February alleging he had sexually assaulted 10 women.
In the months since, the number of accusers in the lawsuit has risen to 46, including 18 Canadians and multiple Winnipeggers. The allegations span five decades, with 12 of the women claiming they were minors when Nygard allegedly raped them.
Nygard, 78, has repeatedly denied the allegations through his lawyers, claiming he’s the target of people with a personal vendetta against him intent on ruining his reputation.
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.
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