Closing Target Canada Owes Creditors Whopping $5 Billion

RTR4LLTV — The logo of Target, a discount retail store, is pictured in Richmond, British Columbia January 15, 2015. Target Corp's abrupt decision to withdraw from Canada is troubling news for many mall owners, as the most obvious potential buyer of property assets - Wal-Mart - is expected to cherry-pick from Target's 133 locations. Minneapolis-based Target, the second-biggest U.S. discounter, obtained creditor protection for the Canadian unit and said on Thursday it will seek to sell real estate assets, including leases for some 14.7 million square feet of retail space. REUTERS/Ben Nelms REUTERS/Ben Nelms

Now it can be told. Apart from the 17,000 jobs about to be sacked with the closure of Target Canada, the company also owns its creditors a whopping C$5 billion [A$5 billion], regarded as likely one of the largest bankruptcies in Canadian history.

Its creditors are a varied group, from companies, suppliers, landlords even municipalities and governments, a 45-page document that was included in the U.S. retail giant’s Canadian filing revealed. To name a few, they were Chapman’s Ice Cream, Coca-Cola Canada, even the City of Winnipeg, as well as the central Ontario city of Barrie. What’s more, it also owes the federal Canada Revenue Agency millions in taxes, as well as provincial governments.

The document listed Target Canada’s assets have just about the same value as its liabilities. These include 137 store leases, the merchandise inventory and some real estate. Still, even if everything gets to be sold, Target Canada knew the cash it would yield will not be sufficient to cover all its debts. Thus the filing of a bankruptcy protection effectively tells all creditors it can only collect a certain amount, until a court judge approves a repayment plan.

An unidentified Toronto agency president told Winnipeg Free Press they would just settle things off in the "few thousand" range, noting it is impractical to pursue legal action. "The legal costs and time involved outweigh the benefit," he said.

But their acceptance may not be the same thing as with the others, like with Carat Canada, Target Canada’s Montreal-based media agency. The company owes the latter $9.4 million. "(Nine million dollars) is a serious chunk of change worth fighting for," the Toronto agency president said. "If they're a public company, they will have the expertise and resources to work Target to get some of their money back. Eventually."

Names of creditors in the 45-page document that Target Canada owes to include:

- Acklands Grainger, owed $46,624;

- Bison Transport, owed $846,216;

- CAMAC, owed $6,150;

- Campbell Company of Canada, owed $184,407;

- Charles Scerbo Drugs Ltd., owed $10,369;

- City of Winnipeg, owed $14,153;

- Clinix Pharmacy Ltd., owed $3,399

- Industrial Truck Service, owed $8,660;

- Manitoba Finance-Taxation division, owed $1,003,130;

- Nygard International, owed $26,615;

- Old Dutch Foods Ltd., owed $219,661;