Canada Tire: who should control the liquidation

On October 1 and October 5, 2026, Gabriel Granatstein, Canada Tire's chief executive, and Gavinder Bhatia, its president and chief operating officer, met in person with the majority of the company's employees. They explained the company's situation, told them this would very likely be Canada Tire's last season, and asked for their support "in winding down the company with dignity and respect, while maximizing payments to its creditors." By the company's account the employees said they strongly supported the process, and also told Mr. Granatstein that if a receiver and liquidator took over, the uncertainty would make it difficult for them to stay should other opportunities arise, per the Wind-Down Application, Oct. 8, 2026, para. 62.

The company's application for that wind-down is dated October 8, the same day as the application meant to replace it. Canada Tire asks to sell its own stock through the winter-tire season, to February 27, 2027, under a monitor with expanded powers, per the Wind-Down Application, Oct. 8, 2026, para. 2. FGI Worldwide LLC, its first-ranking secured creditor and its interim lender, asks the Court under s. 243 of the Bankruptcy and Insolvency Act to appoint Raymond Chabot Inc. as receiver instead, and puts the dispute in two sentences: "There is no dispute that the Debtors' business must be liquidated. The only question is who should control that liquidation," per the Application for the Appointment of a Receiver, Oct. 8, 2026, paras. 1, 6, 10, 17. Both, with a third application under which Mr. Granatstein would buy six life insurance policies the company owns, are to be presented to Justice Michel A. Pinsonnault on October 14, per the notices of presentation of the Wind-Down Application, the receivership application and the vesting application. The stay, as extended on September 30, runs to that day, per the Stay Extension Order, Sept. 30, 2026, para. 9.

One hundred and eight letters

When this file was last reported here, on September 2, binding offers were due September 15, and the fights over two suppliers' tires in transit had been parked in trust until it could be seen whether the sale process would repay FGI in full. The debtors ran the process with Richter LLP as sale advisor, under the Monitor's supervision. As the company recounts it from Richter's information, a solicitation letter and non-disclosure agreement went to 108 parties as at September 11, "including liquidators"; 32 signed one, and 31 of those received a confidential information memorandum, per the Wind-Down Application, Oct. 8, 2026, paras. 3, 11, 32.

Five letters of intent arrived on September 15. Reviewing them in consultation with FGI, the sale team found none acceptable, and with FGI's consent gave every bidder still interested "a final and limited opportunity" to submit a new or revised letter by September 28. Four did, and the company says none of them, "whether going-concern or liquidation offers, provided a recovery comparable to that projected under a company-led wind-down," per the Wind-Down Application, Oct. 8, 2026, paras. 35–42. Every letter was put before the Court under seal. FGI's application describes the field as one going-concern bid, one bid from a liquidator with a committed purchase price, and offers from others to act as liquidation agents, none acceptable to FGI, per the Application for the Appointment of a Receiver, Oct. 8, 2026, para. 127.

From late September the company stopped placing new seasonal and spring orders with suppliers, and when production of about twenty Maxtrek containers was delayed it cancelled them, on or about September 29, at no cost, per the Wind-Down Application, Oct. 8, 2026, para. 43.

The company's winter

The Orderly Wind-Down Scenario was prepared by the debtors and the Monitor; its unredacted copy is under seal, and the application sets out its key terms. From October 1, 2026, to February 27, 2027, Canada Tire would keep selling to its existing customers under the Monitor's enhanced supervision, with everything on hand and inbound sold or returned by January 31 and February left for the last collections and the last repayment to FGI. The model behind it, which the application says the Monitor prepared using management's operating assumptions, prices October and November sales at about 125% of cost in its high case and 120% in its low, against the roughly 125% to 130% the company says it is realizing now, with lower prices modelled for December and January. It projects net sales of approximately $26.7 million (high) and $25.8 million (low), $12.9 million and $12.4 million of it in November. The six warehouses would close as stock runs down, from Dartmouth on November 14 to Valleyfield and Mississauga on January 31, and headcount would fall from 63 to 24 by December 31, the remaining 24 leaving on January 31, 2027, per the Wind-Down Application, Oct. 8, 2026, paras. 2(a), 44, 46.

The summer's supplier arrangements carry on inside it: suppliers are paid for their reserve goods as they are sold, and the amounts owing for the disputed Unicorn and Maxtrek goods are paid to the Monitor in trust and excluded from the projected recoveries (para. 46).

The projection is the application's centrepiece. On that model, FGI's revolving and interim facilities are repaid in full in both cases, with a projected position after FGI's full repayment of approximately $1.2 million in the high case and $0.1 million in the low, "taking into account the life insurance policies", "preserving a prospect of recovery for unsecured creditors," per the Wind-Down Application, Oct. 8, 2026, paras. 4, 60(a). Repaying the interim facility in November, the application's table says, assumes its maturity is extended and is subject to the Monitor's determination of the exact quantum of FGI's claim and a court order authorizing any distribution (para. 46).

The order sought would make MNP the "final decision-maker on the sale strategy and material pricing decisions", empower it to act for the debtors in the proceedings, to assign them into bankruptcy when it deems appropriate and to act as trustee, declare that the directors and officers incur no liability for the Monitor's acts in exercising those powers, and extend the stay to March 31, 2027, per the Wind-Down Application, Oct. 8, 2026, paras. 2(b)–(c), 70. Mr. Granatstein, who holds all of Canada Tire's voting shares, would step down as chief executive and stay on part-time at a reduced salary, "without commission, bonus or share of proceeds," while Ms. Bhatia runs the wind-down day to day. Her retention bonus agreement, under seal and subject to the Court's approval, provides for a sales bonus on each sale's gross proceeds net of sales taxes, and a deferred bonus payable only once FGI is repaid in full. An amended and restated retention plan for key employees, which the application calls the Third KERP, is also under seal, with the KERP Charge to remain at $350,000. Members of the sales team, the application says, have already left for competitors, per the Wind-Down Application, Oct. 8, 2026, paras. 46–49, 53, 55, 64 and sworn statement.

Who would fund it

The company seeks no new interim financing. It has drawn approximately $1.39 million of FGI's $2.5 million interim facility, which matures October 30, 2026. It believes the remaining room will fund the wind-down "provided that FGI cooperates," and says that if FGI will not extend the maturity or fund advances, Rockport Capital Inc. has confirmed its interest in refinancing on terms similar to its July term sheet, a $2.5 million facility at a fixed 12%, per the Wind-Down Application, Oct. 8, 2026, paras. 7, 76–78, 89–90. Rockport was the interim lender the company proposed in July, per the Application for the Issuance of a First Day Initial Order, July 17, 2026, paras. 131, 134.