Last September, deep in debt and with rising losses, Mountain Equipment Co-op filed for creditor protection and announced its sale to U.S.-based private investment firm Kingswood Capital Management, the Canadian Press reported. The B.C.-based retailer had been struggling with an enormous debt burden, inventory problems and steep online competition for years. Then COVID-19 hit, shuttering stores and obliterating in-person sales. Still, the decision to sell came as a surprise to members of the co-operative.
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Canada
Insolvent beverage company DavidsTea Inc. says its net losses nearly doubled last year on surging losses in the fourth quarter, the Canadian Press reported. The Montreal-based company says it lost $55.9 million or $2.14 per diluted share for the year, compared with a loss of $31.2 million or $1.20 per share in 2019. Deeper losses came as the company's sales plunged 38 per cent to $121.7 million from $196.5 million as it felt the effects of lockdowns and it exited its entire retail network except 18 Canadian stores. In the three months ended Jan.
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Insolvent Laurentian has cleared a critical obstacle to move forward with its plan to become financially stable, after a judge on Sunday agreed to allow the Sudbury, Ont., university to continue to operate while protected from creditors until Aug. 31, CBC News reported. Justice Geoffrey Morawetz of Ontario Superior Court has also given the university the go-ahead to cut ties with three federated universities, which will qualify Laurentian for a $10-million loan. Morawetz's decisions following hearings last week come at the expense of the University of Sudbury, Thorneloe and Huntington.
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The Calgary-based GYMVMT fitness chain will close multiple locations as part of a restructuring effort aimed at saving the business in the face of COVID-19 restrictions, the Calgary Herald reported. International Fitness Holdings Inc. — which operates 21 fitness centers in Calgary and Edmonton under the names GYMVMT, HER GYMVMT, Bankers Hall Club and ClubFit — filed a notice of intention last week to file a proposal under the Bankruptcy and Insolvency Act.
If it makes you feel better to say Canada’s housing market is a bubble, go ahead and say it. Everyone else has, The Globe and Mail reported. Ten years ago, The Economist magazine concluded Canadian real estate was grossly overvalued. Nine years ago, Merrill Lynch declared Canadian housing was afflicted by “overvaluation, speculation and oversupply.” Seven years ago, the Organization for Economic Co-operation and Development and the International Monetary Fund began sounding sirens about the dysfunctional state of Canadian housing.
The national average selling price for existing homes last month was about 32 percent higher than in March 2020, and owners in communities across Canada are feeling the benefits, The Globe and Mail reported. Average prices in Chilliwack, B.C., Bancroft, Ont., and Yarmouth, N.S., were at least $100,000 higher than a year earlier, right in line with big cities such as Vancouver. By handing owners these lottery-like gains in equity, the housing market has validated the almost religious belief of Canadians that owning a house is the foundation of financial success.
The three-month trial of a lawsuit against Toronto-Dominion Bank, in which the liquidators of the collapsed Antigua bank of former Texas financier Robert Allen Stanford are seeking $4.5 billion in damages, is expected to end on Wednesday, Reuters reported. A written judgment from the court is expected in a few months. In closing arguments at the Ontario Superior Court, lawyers for the court-appointed joint liquidators of Stanford International Bank (SIB) alleged negligence and "knowing assistance" by TD in providing a correspondent banking account that Stanford used to perpetuate fraud.
Apartment building owners in major Canadian cities are quietly selling billions of dollars worth of properties at premium valuations, despite the pandemic, with pension funds, private equity firms and other investors desperate to swallow large portfolios that rarely hit the market, The Globe and Mail reported.
The Bank of Canada took the biggest step yet by a major economy to reduce emergency levels of monetary stimulus as it hailed a stronger-than-expected recovery from the pandemic, Bloomberg News reported. Policy makers led by Governor Tiff Macklem said Wednesday they would scale back their purchases of government debt by a quarter to C$3 billion ($2.4 billion) and accelerate the timetable for a possible interest-rate increase. The upbeat turn toward plotting a return to more normal policy has been resisted by counterparts elsewhere, including the U.S. Federal Reserve.
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Spartan Bioscience, which filed for bankruptcy protection on April 5, plans to start accepting letters of intent from prospective buyers or investors interested in restructuring the insolvent firm until May 17, The Logic reported. It will select two bids—one winning bid and one backup—from a short list of qualified bidders, with plans to have a transaction complete by the end of June. The Ontario Superior Court first has to approve the process. The Ottawa-based company is seeking protection from creditors, after spending heavily on developing a COVID-19 rapid test.
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