That's old news. What you may not have learned is that the giant retailer also left behind 5 BILLION dollars in unpaid bills, severances, rent, and taxes. The parent US company is not liable for any of this debt because Target Canada was/is a separate corporate entity that has declared bankruptcy.
It's not clear what assets remain for the creditors, but it is clear that only secured creditors have any hope of recouping some of their loss. That probably means the banks: you will doubtless recall that when Target entered Canada it did so by a leveraged buyout of Zellers, probably financed by one or more banks. Only that loan is secured. Employees owed back wages are unsecured creditors, as are Canadian suppliers of Target's merchandise, meaning they will get nothing! Oh yes, since Target used part time and contract labour, many of its ex-employees will not qualify for EI either. It's all one big mess.
No doubt the management of Target Canada messed up royally (though not, apparently, its CEO who bailed out with a $76 million golden handshake). Such things happen, though not usually on such a scale. This may be the largest corporate bankruptcy in Canadian history. Still, companies do fail, and investors, employees and creditors know, or ought to know, the risks when dealing with a start-up.
There is however another player in this league who is left out of the loop altogether. That player is the public. Unlike Joe the mechanic who starts up a…
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