ANN Canada Inc. and Tween Brands Canada Stores Ltd.

Proposal

^{Page last updated: October 19, 2021}

This page is for information purposes only and you should consult your professional adviser if you have any questions or are uncertain as to your rights or obligations.

On July 23, 2020, each ANN Canada Inc. (“Ann Canada”) and Tween Brands Canada Stores Ltd. (“Tween Canada” and collectively with Ann Canada the “Companies”) filed a Notice of Intention to Make a Proposal (“NOI”) pursuant to Section 50.4(1) of the Bankruptcy and Insolvency Act (Canada) (“BIA”) and PricewaterhouseCoopers Inc., LIT (“PwC”) was named as the Licensed Insolvency Trustee under the NOI (the “Proposal Trustee”).

As a result of the filing of the NOI, all creditors are stayed from commencing or continuing any proceedings against the Companies which now have a period of 30 days to file their proposal with the Proposal Trustee pursuant to the provisions of the BIA (the “Stay Period”), subject to any extensions of the Stay Period that the Court may grant upon application by the Companies.

The Notice of the NOI and the Proposal Trustee’s appointment will be sent to all known creditors of the Companies in accordance with the provisions of the BIA.

Status of File as of November 13, 2020

On November 12, 2020, following the inspectors approval, PwC, in its capacity as the Licensed Insolvency Trustee of the bankrupt estate of Tween Canada, filed a proposal (the “Proposal”) with the Official Receiver in accordance with Section 50(1)(e) of the BIA (the “Trustee”) with respect to Tween Canada.

A copy of the Notice of Proposal, the Proposal, the Report of the Trustee to Creditors on the Proposal, the Statement of Affairs of the Company, which shows the Company’s assets and liabilities, sworn November 12, 2020, a list of the creditors whose claims amount to $250 or more, a Proof of Claim form, a Proxy Form and a Voting Letter (the “Notice of Proposal”) were sent to all known creditors of Tween Canada on November 13, 2020.  The Notice of Proposal is posted under “Notices and FAQ” section of this website.

Status of File as of August 20, 2020

On August 20, 2020 the Court issued an order (the “Stay Extension Order”) extending the time to file the Proposal and the Stay Period to and including September 15, 2020.

Status of File as of August 18, 2020

On August 17, 2020, Ann Canada filed its motion with the Court to extend the Stay Period and the time to file a proposal (the “Proposal”) to September 15, 2020.

On the same date, the Proposal Trustee filed its Second Report (the “Second Report”) to provide the Court with information concerning:

1. The activities of Ann Canada and the Proposal Trustee since the First Report; 
2. Ann Canada’s actual cash flow results as compared to the Cash Flow Forecast (as defined in the Second Report); 
3. Ann Canada’s motion for an extension of the Stay Period from August 22, 2020 to September 15, 2020; and
4. The Proposal Trustee’s recommendations with respect to the relief sought by Ann Canada.

The motion will be heard on August 20, 2020

Status of File as of July 24, 2020

On July 24, 2020, the Ontario Superior Court of Justice (Commercial List) (the “Court”) issued

1.    An order (the “Ann Canada Consolidation Order”) which, among other things:

a)    Approved the consolidation of the NOI proceedings initiated by each, Ann Canada and Tween Canada for administrative purposes only;

b)    Approved the Consulting Agreement (the "Master Service Agreement") entered into between SB360 Capital Partners, LLC (“SB360” or the “Consultant”) and Ascena Retail Group Inc. (“Ascena Retail”), together with the Brand Participation Agreement (the “Participation Agreement”, together with the Master Service Agreement, the “Consulting Agreement”);

c)    Approved the transactions contemplated in the Master Service Agreement, Participation Agreement and Consulting Agreement;

d)    Approved the sales guidelines (the “Sale Guidelines”) for Ann Canada;

e)    Authorized Ann Canada and the Consultant to conduct the liquidation sale;

f)      Approved the Key Employee Retention Plan (the “Ann Canada KERP”);

g)    Granted a first ranking charge (the "Ann Canada Administration Charge") on the property of Ann Canada, in the amount of $215,000 as security for fees and disbursements of the Proposal Trustee, its counsel and counsel of Ann Canada and Consultant or, in the case of the Consultant, as security for the Consulting Fee and the FF&E Commission;

h)    Granted a second ranking charge, in the amount of $950,000 (the “Ann Canada D&O Charge”), on the property of Ann Canada, as security for the indemnity granted to the directors and officers of Ann Canada; and

i)      Granted a third ranking charge (the “Ann Canada KERP Charge”) on the property of Ann Canada, in the amount of $45,000, as security for payment of the obligations set forth under the KERP;

j)      Sealed the Consulting Agreement, KERP and summary table related to KERP; and

2.    An order (the “Tween Canada Consolidation Order”), which among other things:

a.    Approved the consolidation of the NOI proceedings initiated by each, Ann Canada and Tween Canada for administrative purposes only;

b.    Approved the Master Service Agreement entered into between SB360 Ascena Retail, together with the Participation Agreement, together with the Consulting Agreement;

c.     Approved the transactions contemplated in the Master Service Agreement, Participation Agreement and Consulting Agreement;

d.    Approved the Sale Guidelines for Tween Canada;

e.    Authorized Tween Canada and the Consultant to conduct the liquidation sale;

f.      Approved the Key Employee Retention Plan (the “Tween Canada KERP”);

g.    Granted a first ranking charge (the “Tween Canada Administration Charge”) on the property of Tween Canada, in the amount of $265,000, as security for fees and disbursements of the Proposal Trustee, its counsel and counsel of Tween Canada and Consultant or, in the case of the Consultant, as security for the Consulting Fee and the FF&E Commission;

h.    Granted a second ranking charge, in the amount of $1,100,000 (the “Tween Canada D&O Charge”), on the property of Tween Canada, as security for the indemnity granted to directors and officers of Tween Canada; and

i.      Granted a third ranking charge (the “Tween Canada KERP Charge”) on the property of Tween Canada, in the amount of $220,000, as security for payment of the obligations set forth under the KERP; and

j.      Sealed the Consulting Agreement, KERP and summary table related to KERP.