Claire's Canada: 62 cents on the plan, 12 in a bankruptcy

The company that sold jewellery and fashion accessories and pierced the ears of Canadian teenagers has no employees, no directors and no officers, and has not carried on business for a year. It is now called 6045073 Canada Inc.; it was Claire's Stores Canada Corp., and as of September 1, 2025 it ran approximately 103 stores across ten provinces, per the Fifth Report of the Monitor, Sept. 4, 2026, §2.0 paras. 1–2. What is left of it is roughly $4.8 million in a bank account and a fight, now settled, about how much of that money goes back to the United States.

The claim from the parent

On February 13, 2026 the Claire's Liquidating Trust filed four proofs of claim on behalf of Chapter 11 debtors, totalling approximately US$52.80 million — about $72.59 million converted at the filing-date rate. The monitor notes the quantum is consistent with the intercompany payable in the applicant's own unaudited financial statements, per the Fifth Report of the Monitor, Sept. 4, 2026, §3.1 para. 1 and n. 3.

It came in two parts. About $32.15 million was claimed for inventory supplied to the Canadian company by a Chapter 11 debtor and recorded as intercompany transfers. About $49.54 million was claimed on a promissory note made by the Canadian company in favour of a Chapter 11 debtor, dated February 1, 2020, per the Fifth Report of the Monitor, Sept. 4, 2026, §3.1 para. 2.

From April through August 2026 the monitor, Goodmans and the applicant's counsel negotiated with the liquidating trustee. The settlement and support agreement dated September 3, 2026 leaves the trust with a single allowed general unsecured claim of approximately $32.15 million. Every other claim of the relevant Chapter 11 debtors is disallowed in full — the note goes to nothing — mutual releases are exchanged, and the settlement is subject to court approval, per the Fifth Report of the Monitor, Sept. 4, 2026, §3.1 paras. 4–5.

There is a further term, and it is the one that moves the money. Section 22(3) of the CCAA bars the trust from voting in favour of the plan, so instead it consents to the plan, will support it and will not vote against it — and it will not participate in or receive any distribution from the first US$1 million, or $1,374,600, of aggregate distributions to unsecured creditors, per the Fifth Report of the Monitor, Sept. 4, 2026, §3.1 para. 5(d). The monitor calls the settlement a reduction of roughly $40 million against the amount asserted, one that increases recoveries for other creditors and avoids the expense, risk and delay of litigating the disputed parts, per the Fifth Report of the Monitor, Sept. 4, 2026, §3.1 para. 6.

What the arithmetic does

The plan puts every affected creditor in a single unsecured class and distributes in two tranches: the first $1,374,600 of the unsecured cash pool pro rata among affected creditors other than the trust, and the balance pro rata among everyone including the trust on its allowed claim, per the Fifth Report of the Monitor, Sept. 4, 2026, §4.1 paras. 2–3.

The monitor's own comparison of the plan against a straight pro rata bankruptcy distribution is a table of eight lines, and it is the most persuasive document in the motion record. Cash on hand is $4,826,000 either way. Professional fees of $750,000 come off either way. A bankruptcy would also lose $68,000 to the levy imposed under the BIA, leaving $4,008,000 distributable against the plan's $4,076,000.

Under the plan, the intercompany creditor takes nothing in the first tranche and $2,622,000 in the second; other creditors take $1,375,000 and then $79,000. In a bankruptcy the intercompany creditor takes $3,736,000 and the other creditors $272,000. Stated as recoveries: 8% for the intercompany creditor and 62% for everybody else under the plan, against 12% and 12% in a bankruptcy, per the Fifth Report of the Monitor, Sept. 4, 2026, §6.0 para. 4. The parent's trust is giving up about $1.1 million so that the trade creditors recover five times what the statute would have given them.

The monitor's stated view is that the subordination agreement would have been enforceable in a bankruptcy anyway, and that the plan is the effective and efficient way to implement it and avoid a dispute about it, per the Fifth Report of the Monitor, Sept. 4, 2026, §6.0 para. 3.

Nine months of claims

The claims process behind those numbers ran from the claims procedure order of November 14, 2025 to a claims bar date of February 18, 2026, per the Claims Procedure Order, Nov. 14, 2025. By the fourth report in May 2026 the monitor had 550 claims with a face value of about $76.05 million, of which only $1.605 million had been provisionally accepted and $74.387 million was still under review, per the Fourth Report of the Monitor, May 8, 2026. By September the total was 548 claims at about $76.056 million, of which $34.338 million had been accepted. Ten unresolved landlord claims of roughly $1.49 million were settled consensually for about $629,400 in aggregate, per the Fifth Report of the Monitor, Sept. 4, 2026, §3.0 para. 7.

There are no known secured creditors. PPSA searches by the monitor's counsel across the provinces where the applicant operated found none, which is why the whole estate is a single unsecured pool, per the Fifth Report of the Monitor, Sept. 4, 2026, §4.1 para. 1.

The company that is only a monitor now

The reason the monitor rather than the company is doing all of this was settled last November. The going-concern sale closed on September 18, 2025 and the purchaser assumed 73 of 77 eligible Canadian leases and 360 employees; by early November the applicant had no employees left in Canada and its remaining directors and officers had resigned or been removed, per the Third Report of the Monitor, Nov. 12, 2025, §3.3 para. 1, §6.0 para. 1. Justice Dietrich put it flatly in her endorsement: "The result is that at the present time, the Applicant no longer has any employees in Canada," per the Endorsement of Dietrich J., Nov. 14, 2025, para. 26. She granted the expansion of the monitor's powers the same day, per the Expansion of Monitor's Powers Order, Nov. 14, 2025.

The monitor itself changed identity along the way. KSV Restructuring Inc. was replaced by AlixPartners Restructuring, Inc. effective June 1, 2026, with the report noting that "the professionals involved in this mandate remain unchanged," per the Fifth Report of the Monitor, Sept. 4, 2026, n. 1.

Fees for the three months to July 31, 2026 were $112,413.25 for the monitor, over 165.55 hours at an average of $679.03, and $70,186.50 for Goodmans over 79 hours at an average of $888.44, both before HST, per the Fifth Report of the Monitor, Sept. 4, 2026, §10.0 para. 2. When Justice Steele approved the prior period's accounts in May she recorded that the monitor and its counsel "charge rates comparable to the rates charged by similar firms in the Toronto market in the industry," per the Endorsement of Steele J., May 13, 2026, para. 8.

The calendar

Cash was about $4.37 million on August 28, 2026, roughly $280,000 ahead of forecast on the timing of professional fees, per the Fifth Report of the Monitor, Sept. 4, 2026, §7.0 para. 3.

The motion returnable September 14, 2026 asks for a meeting order and a stay extension to March 12, 2027, per the Motion Record of the Monitor, Sept. 4, 2026, Notice of Motion, para. 2. If it is granted, meeting materials go out by October 3, proxies are due at 5:00 p.m. on November 10, the creditors' meeting sits virtually at 10:00 a.m. on November 17, and the sanction motion follows on December 3. The plan must be implemented by February 26, 2027, per the Fifth Report of the Monitor, Sept. 4, 2026, §5.0.

The required majority is the usual one: a majority in number and at least two-thirds in value of the voting claims actually voted. The largest claim in the room, at $32,149,513.19, is not allowed to vote for it.