The company that filed in February had stores. By the end of July it had cash, a receivable from an auctioneer, and some life insurance policies, per Report of the Trustee on the Financial Situation of the Debtor and on the Proposal, August 4, 2026, paras. 15, 21.
On August 4, 2026 — the last day of its final extension — Steve's Music Store Inc. filed its proposal, and Ernst & Young Inc. reported to creditors on it under ss. 50(5) and 50(10)(b) of the BIA.
Five months, four closures, one auction
The notice of intention was filed on February 4, 2026, with EY consenting to act as trustee. Six days later the court authorised the machinery of a retail wind-down all at once: a key employee retention plan, an interim financing facility, and a liquidation services agreement with CICI Détail Inc./CICI Retail Inc. — Continental — together with four charges securing them, being a KERP charge, an administration charge, an interim financing charge and the Continental charge, per Trustee's Report, August 4, 2026, paras. 8–9.
What followed reads as a countdown:
``` February–March 2026 liquidation sale across all retail locations March 16, 2026 three locations closed March 22, 2026 a fourth closed — one store left, downtown Montreal June 30, 2026 final location closed to walk-in customers July 22–23, 2026 auction of remaining inventory July 31, 2026 lease disclaimed, effective ```
per Trustee's Report, August 4, 2026, paras. 11–14.
Between those dates, as the report puts it with no elaboration, a number of employees saw their employment with the company terminated as a result of the decrease in its size, per Trustee's Report, August 4, 2026, para. 13.
The proposal deadline was extended four times — March 5, April 16, May 27 and July 9 — ultimately to August 4, per Trustee's Report, August 4, 2026, para. 10.
That sequence is worth reading as a whole. The extensions were not buying time to restructure a going concern; each one bought the time to close another store in order rather than at once, run the auction properly, and get out of the last lease on a date the estate chose.
What the estate is now
The company's assets consist primarily of cash on hand, accounts receivable from the auctioneer relating to the July auction, and life insurance policies. Its liabilities comprise preferred claims and ordinary unsecured claims.
And one sentence that changes the shape of everything: the company does not have any remaining secured creditors, per Trustee's Report, August 4, 2026, para. 21.
The liquidation has done its work. What is left is a pot of money and a queue.
Updated cash flow projections through to October 25, 2026 were filed with the Office of the Superintendent of Bankruptcy alongside the proposal, per Trustee's Report, August 4, 2026, para. 20.
The proposal, and the claim that was given up
The proposal contemplates a dividend of $750,000, to be distributed to preferred creditors and ordinary creditors and to pay the proposal expenses, per Trustee's Report, August 4, 2026, para. 24.
Then the paragraph the trustee flags as most significant:
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