Canada Tire: the court keeps MNP and turns down FGI's receiver

On October 24, 2026, Justice Michel A. Pinsonnault of the Superior Court of Québec left the liquidation of Canada Tire with its monitor. After hearings on October 14, 19 and 21 at which the court heard witnesses, the judgment dismisses FGI Worldwide LLC's application to have Raymond Chabot Inc. appointed receiver under s. 243 of the Bankruptcy and Insolvency Act, dismisses FGI's contestation of the company's own application, and grants that application: an orderly wind-down of the business under enhanced powers for the monitor, MNP Ltd. The court signed the companion Re-Re-Re-Amended and Restated Initial Order concurrently, and ended the judgment "with legal costs against FGI Worldwide LLC," per the Judgment, Oct. 24, 2026, paras. 55, 98, 124–128 and p. 23.

Both applications were dated October 8 and were reported here on October 9. The judgment frames the main issue as "who should lead the liquidation": the monitor, with enhanced powers and management's help, or Raymond Chabot, "an affiliate of FGI's own financial advisor," with Hilco Global as liquidator, per the Judgment, Oct. 24, 2026, paras. 2, 24. MNP's Second Report of October 13 had called the wind-down "more likely to maximize net realizations than the Proposed Receivership" and said the debtors "have acted and continue to act in good faith and with due diligence," per the Monitor's Second Report, Oct. 13, 2026, paras. 90, 95. The stay now runs "until and including March 31, 2027," per the Re-Re-Re-Amended and Restated Initial Order, Oct. 24, 2026, para. 21.

"A remarkably similar attempt"

The judgment calls a receivership under s. 243 "an extraordinary remedy that must be justified in light of all the circumstances," one in which the court weighs, among other things, "the applicant's good faith." It also weighed FGI's own part in the file: FGI, the court found, had consented to the initial order and to MNP's appointment, "participated in and supported the SISP and its relaunch, insisted on acting as interim lender, and did not oppose the homologation of the suppliers' settlements," and sought "to all intents and purposes, the removal of MNP" only three months later, per the Judgment, Oct. 24, 2026, paras. 32–35, 74.

The court's comparison is Séquestre de Canadoil Forge Ltd., 2025 QCCS 3763, which it describes as involving "a remarkably similar attempt to replace an existing Court officer with RCI, the very same Proposed Receiver." There, the judgment says, Justice Luc Morin treated receivership as an extraordinary measure requiring demonstrated necessity rather than a creditor's preference for its own officer. It quotes that decision: "Receivership should never be perceived as a 'nice to have', an add-on or an enhancement offered on the menu," per the Judgment, Oct. 24, 2026, para. 43.

"The Court shares the view of the Debtors' counsel that the parallels with the present matter are striking," the judgment goes on: FGI consented to the appointment of MNP, which "has acquired a deep knowledge of the Debtors' operations"; FGI identified no deficiency in the monitor's work "other than considering projections that FGI disagrees with"; it "adduced no evidence that their proposed receivership would enhance recoveries, on the contrary"; the proposed receivership order would add a new $500,000 Receiver Administration Charge; and FGI wished to impose its own advisors. "The Court finds that the same solution is available here," per the Judgment, Oct. 24, 2026, paras. 44–45.

FGI's case, as the judgment summarizes it, rested in part on its Revolving Credit and Guarantee Agreement of December 18, 2025, which provides for its right to appoint a receiver on an event of default, and in part on the view that a CCAA proceeding continued only to liquidate runs against the statute's restructuring purpose. To the second the court answered that "the provisions of the CCAA are not restricted to restructuring only." To the first: "It is not sufficient for FGI to invoke, at this juncture, a contractual right and claim to prefer RCI as opposed to MNP who is already fully invested in the CCAA process. It is not sufficient to claim that since FGI will incur a significant loss, they should be the sole one to control the liquidation process outside the CCAA Proceedings." Earlier, the court had quoted a 2019 article in the Annual Review of Insolvency Law on large creditors, "who often enjoy secured status": "To allow them to call the shots by freely choosing between CCAA liquidation, receivership or bankruptcy will lead to inappropriate risk-taking," per the Judgment, Oct. 24, 2026, paras. 5–6, 42, 49, 67.

Hilco, and $8.8 million

The figures in dispute come from the wind-down model, which the judgment describes as "validated by" MNP. As the judgment gives them, the model projects FGI's revolving and interim facilities repaid in full in both its high and low cases, with a potential surplus after FGI of $1,178,000 in the high case and $127,000 in the low. The court wrote: "Albeit optimistic, their repayment in full is projected under both scenarios of the Monitor's financial model"; MNP's representative "never professed to guarantee those projections," and the monitor had "challenged significantly the initial projections submitted by management"; the anticipated surplus "may turn out to be a deficit, the size of which is unknown at this juncture," per the Judgment, Oct. 24, 2026, paras. 2, 48, 50, 65–66.

Raymond Chabot's witness disputed "wholeheartedly the seriousness" of those projections, the judgment records, and held such an outcome "completely impossible" given the risks of a liquidation, especially one of this scale. Asked in cross-examination for the witness's own estimate of a more realistic outcome, the witness answered that the shortfall would be worse than the loss projected for FGI under Hilco's offer in the sale process, $6,885,000 in the high case and $8,838,000 in the low; no comparative analysis had been prepared, the judgment says. The court wrote that it "was essentially invited by the Proposed Receiver to conclude that the Orderly Wind-Down Plan was so out of whack with reality that it should expect, instead, a loss of epic proportion for FGI greater than $8.8 M without any backup whatsoever." The testimony, in the court's words, "convinced the Court that it is far more just, convenient and reasonable to leave the liquidation process to the Monitor with the assistance of management. FGI stands to lose far less with a potential upswing for the other stakeholders," per the Judgment, Oct. 24, 2026, paras. 65, 68–70.

Hilco's place in FGI's plan the court called "particularly striking, if not bewildering." FGI had selected Hilco on the strength of its offer in the sale process, an offer that, the judgment says, FGI had itself rejected because it resulted "in a significant loss to FGI," and which, of all the liquidation offers, "offered the worst outcome for FGI." RCI's witness expected two days to be enough to settle Hilco's mandate, but there were "no assurances that Hilco would rely upon or stick to the terms and conditions of their offer," and Hilco's presence at the hearing "was not sought." The court called the approach "somewhat 'désinvolte'" [translation: somewhat offhand], "not befitting of a major experienced lending corporation, such as FGI," per the Judgment, Oct. 24, 2026, paras. 3(b), 24, 58–60, 113–114.

FGI's argument, as the judgment sets it out, was that the sale process had produced three liquidation proposals, each contemplating a shortfall to FGI, and that those bids were "the best available market evidence of the realizable value of the Debtors' assets." The court replied that FGI had rejected all three when they were made, and said nothing prevents the monitor from bringing in professional liquidators "should they consider such assistance to be beneficial," per the Judgment, Oct. 24, 2026, paras. 47, 108, 112.