In-Sport Fashions: an NOI wind-down, and 45 days to December 12

On October 28, 2026, a registrar in bankruptcy of the Superior Court in Montréal gave In-Sport Fashions Inc. 45 more days to file a proposal, "soit jusqu'au 12 décembre 2026", that is, until December 12, 2026 [translation]. The registrar granted the company's motion "selon ses conclusions" (in accordance with its conclusions [translation]), and those conclusions included declarations under the Wage Earner Protection Program Act, per the Endorsement on the Motion to Extend the Delay, Oct. 28, 2026, p. 1. The trustee, KPMG Inc., had reported the day before that since filing its notice of intention on October 2 the company had stopped buying new inventory and, on October 5, laid off nine of the approximately 26 employees it had before the filing, keeping 17 "to assist with the Wind-down." It was collecting its receivables and selling the stock on hand "through its regular sales channels," per the First Report of the Trustee, Oct. 27, 2026, paras. 4–5, 15.

In KPMG's description, In-Sport is "a Québec-based apparel and sporting goods distributor headquartered in Montreal," engaged for more than forty years in "the sourcing, distribution and sale of high-quality sporting apparel, outdoor products and related merchandise throughout Canada and internationally." It supplies wholesale and retail customers, major sporting goods and outdoor retailers among them, and sells online; before the filing it worked from a head office on Royalmount Avenue in Mont-Royal and two warehouses in Saint-Laurent, per the First Report of the Trustee, Oct. 27, 2026, paras. 11–14. The company's own letter to its "Valued Partners," dated October 7 and signed by its chief executive, describes a business "proud to be a leading distributor of high-quality outdoor, lifestyle, and fashion products across Canada and around the world," and gives the news in one sentence: "After careful consideration, In-Sport has made the difficult decision to wind down its operations and has commenced a formal, court-supervised insolvency process," per the Notice to Creditors, Oct. 8, 2026, p. 1 (company letter of Oct. 7).

Two customers and lost agreements, in the trustee's account

The trustee's report relies on information from the company, including unaudited financial information, which KPMG reviewed for reasonableness but did not audit, per the First Report of the Trustee, Oct. 27, 2026, para. 8. It places the company in "the highly competitive sporting goods and apparel distribution industry" and says that "In recent years, In-Sport faced financial difficulties as a result of, among other things, lower purchases from two of its key customers and the loss of significant distribution agreements." Those events, it says, "resulted in lower sales and downward pressure on the Company's profitability." Cost cuts and efforts to increase sales "were insufficient to restore the Company to profitability," the report goes on, and the lack of profitability brought liquidity pressure as the company "was unable to pay its creditors in the ordinary course of business," per the First Report of the Trustee, Oct. 27, 2026, paras. 16–18. The report names neither the two customers nor the agreements. The company's motion, whose facts its president affirmed on October 23, says: "Significant changes in the distribution industry and the outdoor-goods market have impaired the Debtor's ability to remain competitive," per the Motion to Extend the Delay, Oct. 23, 2026, para. 6 and affidavit, p. 5.

The report's summary of the income statement covers the three fiscal years to March 31. Sales were $14.996 million in fiscal 2024, $14.890 million in 2025 and $15.561 million in 2026. Gross earnings went from $6.454 million to $5.616 million to $5.007 million over the same years, and the net losses were $1.426 million, $2.487 million and $2.346 million, the first two including losses from discontinued operations of $758,000 and $508,000, per the First Report of the Trustee, Oct. 27, 2026, para. 23. "Ultimately, the Company's Board of Directors determined that a wind-down of the Company was the most appropriate course of action," the report says. "Given its insolvency, the Company filed an NOI on October 2, 2026," per the First Report of the Trustee, Oct. 27, 2026, para. 19.

The bank and the list

Royal Bank of Canada is In-Sport's secured operating lender, the report says, providing two revolving credit facilities "denominated in Canadian and U.S. dollars" and credit cards used to fund operating expenses. The trustee puts In-Sport's liabilities at October 2 at $9.386 million: $3.194 million of secured liabilities, all of it bank indebtedness to RBC, and $6.192 million unsecured. RBC has issued a notice under s. 244 of the Bankruptcy and Insolvency Act and the company has waived all delays under it, the report says, and when it was written RBC and "the Company and/or its advisors" were "in discussions with respect to a forbearance agreement," per the First Report of the Trustee, Oct. 27, 2026, paras. 20–22. The company's cash-flow forecast carries a $25,000 forbearance fee in its first week, per the First Report of the Trustee, Oct. 27, 2026, para. 24 and App. B.

The list of known creditors with claims of $250 or more, attached to the notice of intention, totals $9,386,279.39 and puts RBC at $3,193,936.01. Among the other creditors on it are Cotopaxi at $1,252,192.75, the Canada Border Services Agency at $731,435.66, Helinox at $567,597.38, Olymbec Development Inc at $270,000.00, CH Robinson Worldwide Canada Ltd at $234,188.92, Hangzhou ZK Apparel Co.,Ltd. at $170,291.41 and Exped at $165,338.15. Cotopaxi and Helinox are listed at addresses in Utah and California, Hangzhou ZK Apparel in China and Exped in Zurich, per the Notice to Creditors, Oct. 8, 2026, Form 33 list of creditors, pp. 4–8.

Selling the stock in the ordinary course

"Following a preliminary discussion with local liquidators," the trustee reports, it is "of the view that sales by the Debtor in the ordinary course should yield a higher recovery for the Debtor's stakeholders as compared to a bulk liquidation sale," per the First Report of the Trustee, Oct. 27, 2026, para. 6. The company's motion says it is selling its remaining inventory "with a view to repaying its operating lender, Royal Bank of Canada …, and generating proceeds for its creditors generally," and that more time "is required to continue these sales in an orderly manner and avoid an abrupt interruption of its selling process." Without an extension before the October 30 deadline, the motion says, the company would be deemed to have made an assignment in bankruptcy, and "In the Debtor's assessment, an interruption of the current selling process at this stage would reduce the realizable value of the remaining inventory and creditor recoveries," per the Motion to Extend the Delay, Oct. 23, 2026, paras. 2, 8–9, 11.