Our Montreal office advised Deloitte Restructuring Inc., in its capacity as monitor, in the CCAA proceedings of Groupe Dynamite Inc. and its affiliates (Dynamite). In 2020, Dynamite initiated proceedings under the CCAA before the Superior Court of Québec that were subsequently recognized under Chapter 15 of the United States Bankruptcy Code (Chapter 15). The filing occurred in the context of the COVID-19 pandemic (the Pandemic).

At the initiation of the proceedings, Dynamite was indebted to its secured and unsecured creditors for around C$360 million. During the 13 months that followed, Dynamite implemented a CCAA restructuring process, which notably involved a renegotiation of its lease portfolio and the determination of various complex and disputed claims.

In the course of the proceedings, the supervising court rendered two judgments of interest to insolvency practice dealing with a CCAA debtor company’s obligations to pay post-filing rent (Groupe Dynamite Inc. c. Deloitte Restructuring Inc., 2021 QCCS 3) and to pay pre-filing arrears in sales taxes (Groupe Dynamite Inc. (18 May 2021), Que SC, Montréal 500-11-058763-208) both in the particular context of the Pandemic.

Dynamite was ultimately able to develop a CCAA plan of compromise and arrangement (the Plan) that was approved nearly unanimously by its creditors and sanctioned by the court on October 7, 2021. The Plan was thereafter recognized under Chapter 15 and has now been implemented, such that Dynamite has successfully completed its restructuring under the CCAA.

Dynamite is a Montréal-based fashion retailer that has been operating two brands (Dynamite and Garage) since 1975. It has 300 stores across North America, including 86 in the U.S., and employs over 4,000 people.

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