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Hoo boy.
MEC's many financial woes are outlined in this 735 (!!) page affidavit: https://www.alvarezandmarsal.com/sites/default/files/canada/first_affidavit_p._arrata_september_14_2020.pdf
I am not a bankruptcy lawyer, but here's a
with some things that jumped out at me:
1) The expansion plan started out OK but put MEC in a vulnerable financial position:
MEC's many financial woes are outlined in this 735 (!!) page affidavit: https://www.alvarezandmarsal.com/sites/default/files/canada/first_affidavit_p._arrata_september_14_2020.pdf
I am not a bankruptcy lawyer, but here's a
with some things that jumped out at me:1) The expansion plan started out OK but put MEC in a vulnerable financial position:
2) Despite online sales nearly doubling during the pandemic, total sales were down $90 million from the same time last year:
3) MEC had been losing a lot of money on operations for years and was staying afloat largely through real-estate sales:
4) Among its many liabilities was more than $15 million in unredeemed gift cards and sales returns:
5) Its borrowing limit was reduced and the maturity date on its debt pushed back but it became clear a default was imminent:
6) MEC has about 1,500 employees
&
6a) It sounds like they will get $1.7 million in accrued OT & vacation pay? (Someone correct me if I'm reading the 2nd part wrong)
&
6a) It sounds like they will get $1.7 million in accrued OT & vacation pay? (Someone correct me if I'm reading the 2nd part wrong)
7) And in this additional document -- https://www.alvarezandmarsal.com/sites/default/files/canada/monitors_pre-filing_report_september_13_2020.pdf -- it's forecast that MEC would lose another $17 million in the next 11 weeks (despite receiving $6M in Canada Emergency Wage Subsidy).
It's estimated it will need $89 million in interim financing during that time.
It's estimated it will need $89 million in interim financing during that time.
