Target Canada announces it has the support of landlords for amended plan

TORONTO, March 4, 2016 /CNW/ - Target Canada Co. (together with its affiliates, "Target Canada") announced today that a settlement has been reached with all of Target Canada's former landlords whose leases were terminated as part of Target Canada's wind-down under the Companies' Creditors Arrangement Act (Canada) (the "CCAA"). The settlement provides the framework for a global, consensual resolution of the CCAA proceedings and addresses the landlords' claims against both Target Canada and Target Corporation.

Under the settlement, all landlords will support an Amended and Restated Plan (the "Amended Plan") to be presented by Target Canada in the CCAA proceedings. As part of the settlement, those landlords holding guarantees from Target Corporation will receive payment on account of such guarantees in exchange for a contractual release of their guarantee claims against Target Corporation.

Based on information available as at February 24, 2016, and subject to certain important assumptions and qualifications, including those set out in the Twenty-Third Report and the Twenty-Fourth Report of Alvarez & Marsal Canada Inc., the Court-appointed Monitor (the "Monitor") of Target Canada, dated November 27, 2015 and February 9, 2016, respectively, the Monitor estimates an illustrative range of recovery under the Amended Plan for unsecured creditors of approximately 66% to 77%.

"This agreement is the result of months of tough negotiations with stakeholders. We are delighted to have achieved a consensual path forward and believe that the Amended Plan is in the best interests of the stakeholders of Target Canada. We remain focused on achieving a timely wind-down of the CCAA proceedings, and distributing proceeds to stakeholders as soon as possible," said Aaron Alt, Target Canada CEO.

The settlement transaction and Amended Plan involve contributions from Target Corporation, including the subordination of the vast majority of Target Corporation's intercompany claims.

"We are pleased that we were able to negotiate an outcome that preserves meaningful value for creditors of Target Canada, avoids protracted litigation and is supported by the Monitor. Target Corporation has demonstrated its commitment to a global resolution of the CCAA proceedings through subordination of its claims in the estate and additional cash contributions. Each member of the Court-appointed Consultative Committee, which is comprised of senior counsel representing a broad cross section of Target Canada's stakeholders, also supports the filing of the Amended Plan," said Tracy Sandler of Osler, Hoskin & Harcourt LLP, counsel to Target Canada.

Consistent with the timeline presented to the Court overseeing Target Canada's CCAA proceedings, Target Canada will seek an extension of the CCAA stay of proceedings on March 14, 2016.  Thereafter, Target Canada intends to bring a further motion on April 13, 2016 seeking an order approving the filing of the Amended Plan with the Court and authorizing it to call a creditors' meeting to vote on the Amended Plan on May 25, 2016 at the Toronto Board of Trade. Subject to approval at the creditors' meeting, Target Canada intends to seek Court approval of the Amended Plan on June 2, 2016.

SOURCE Target Canada

Further information regarding the CCAA proceedings, including copies of motion materials and the Amended Plan, will be posted on the Monitor's website at www.alvarezandmarsal.com/targetcanada. For all inquiries, please contact the Monitor at [phone] or [email protected].