Nygard properties up for sale after Manitoba court approves liquidation of retail assets

By | April 29, 2020

Manitoba’s Court of Queen’s Bench has approved the liquidation sale of assets and inventory belonging to a group of companies owned by Winnipeg fashion mogul Peter Nygard.

Nine Nygard companies went into receivership on March 18 and are under the control of Richter Advisory Group Inc., after American lenders White Oak Commercial Finance and Second Avenue Capital Partners took them to court to recoup a loan worth more than $25 million US.

On Tuesday Richter was back in court seeking an order to approve the sale of Nygard’s assets.

“While the receiver has made efforts to obtain a sale of the business or certain parcels of it, these efforts have not yielded any tangible results to date,” Richter said in court filings.

It said the COVID-19 pandemic has made selling the business, or making any money off of it, next to impossible. 

“The debtors’ business activities have largely ceased and the loss of what may be significant portions of the spring/summer retail selling seasons will likely create a glut of seasonal inventory in the marketplace that will either need to be warehoused until next year’s selling season or liquidated (when circumstances permit),” said Richter.

Justice James Edmond granted the request for a store closing or liquidation sale to be held at a date to be determined.

A sale of the business as a point of concern is usually in the best interests of all stakeholders to maximize the return. Given the present circumstances, it is likely that there are other bidders that may come forward at this time,” Edmond said Tuesday.

The Nygard chain operated 169 retail stores in North America and had 1,450 employees worldwide.

In February, Nygard’s biggest customer — American retailer Dillard’s — publicly dumped the company after the FBI and NYPD raided Nygard’s New York and California offices as part of a police probe into sex trafficking allegations.

A total of 46 women are taking part in a class-action lawsuit accusing Canadian fashion mogul Peter Nygard, pictured in 2016, of sexual assault. (Gustavo Caballero/Churchill Downs/Getty Images)

30 Nygard companies ‘intermingled’

Edmond also approved the receiver’s request to access documents not connected to the nine companies under Richter’s control.

This company, the Nygard organization — and that’s more than just the respondents — chose to carry on their business in such a way that they intermingle records, electronic files for — it looks to be as many as 30 companies and they’ve done that for years,” said Richter’s lawyer Bruce Taylor.

Court heard Nygard’s electronic records are stored on 213 servers and contain 200 terabytes of data. 

Taylor said that has made accessing relevant documents incredibly complicated and expensive.

“There is a subpoena from a grand jury in the southern district of New York addressed to Nygard Inc. — one of the companies in receiverships, to which Nygard has to respond,” he said.

Taylor said Richter consulted a lawyer in New York for advice on how to do that when documents involving 30 companies are so intermingled.

“That’s not simple,” said Taylor. “Nygard Inc.’s obligations are to provide — in response to the subpoena — any document that’s in its custody or control. And that means any document in its control … whether it’s the Nygard document or not.”

Forty-six women have filed a class-action lawsuit against Peter Nygard, alleging he raped them and was running what they called a “sex trafficking ring.”

Nygard denies the allegations and none have been proven in court. No criminal charges have been filed against Nygard in relation to the sex assault claims.

In March, White Oak funded Nygard’s payroll in order to make sure employees would be paid. Nygard was supposed to pay that back. Court heard it hadn’t, even though Edmond ordered the companies to do so.

View original article here Source