Warehouse One: every secured lender was an affiliate

Warehouse One opened in Winnipeg in 1977, and its customers knew it as "The Jean Store," according to the Affidavit of Shamsh Kassam, May 1, 2026, para. 9. WHO Industries Inc. bought the business out of receivership in 2002, and the company's director deposes that it made money from then until the COVID-19 pandemic, when its financial performance "began to deteriorate." In April 2025 the company bought the Bootlegger brand, founded in 1971, out of the CCAA restructuring of Bootlegger Clothing Inc., a business once run as a subsidiary of Comark Holdings Inc., which the affidavit describes as "previously owned by an affiliate of the Applicant's majority shareholder," per the Affidavit of Shamsh Kassam, May 1, 2026, paras. 10–12.

By the spring of 2026 the company ran 128 stores across eight provinces and one territory (95 under the Warehouse One banner, 25 Bootlegger, 8 carrying both) and employed 982 non-unionized people, directed from a head office and distribution centre at 1530 Gamble Place in Winnipeg that it leased from Parian Logistics Inc., an affiliate of its majority shareholder, per the Pre-Filing Report of the Proposed Monitor, May 4, 2026, paras. 5.2–5.7. The company attributes its decline to low-cost, "fast-fashion" and online competitors, to losses after the Bootlegger purchase, and to its small-town stores, about one-third of its retail footprint and 40% of its sales, where sales had fallen more than 10% year over year, "driven by an aging and shrinking customer base and increased e-commerce penetration." It lost approximately $15.0 million in the fiscal year ended February 28, 2026, after $6.5 million the year before, per the Affidavit of Shamsh Kassam, May 1, 2026, paras. 14–15.

On May 6, 2026, Madam Justice Grammond of the Court of King's Bench of Manitoba granted the company protection under the CCAA and appointed Alvarez & Marsal Canada Inc. as monitor. It filed, by its own account, to close its stores in an orderly liquidation and to use the stay to find value in a building, its intellectual property and its corporate attributes, per the Affidavit of Shamsh Kassam, May 1, 2026, para. 20 and the Pre-Filing Report of the Proposed Monitor, May 4, 2026, para. 1.10. By September the stores were shut and the brands sold, and the company had become 3883507 Canada Ltd. On September 9 Justice Grammond authorized the distributions that send what remains to the two lenders now at the top of its secured debt.

A bank taken out eight days before filing

On April 28, 2026, Highgate Capital Ltd., "an entity affiliated with the Applicant through common ownership," bought CIBC's rights under the company's senior credit facility. The purchase "was completed at 100-cent dollars and provided a full recovery for CIBC," per the Pre-Filing Report of the Proposed Monitor, May 4, 2026, para. 1.7. About $7,127,000 was then owing under the revolving facility to Highgate as senior lender, per the Pre-Filing Report of the Proposed Monitor, May 4, 2026, para. 6.7.

Behind that facility sat approximately $33,057,000 in what the record calls the Affiliate Secured Loans. Two were interest-free grid promissory notes dated October 15, 2020, from the company's shareholders: $8,250,000 from WHO Industries, which owns 75%, and $2,750,000 from 4565038 Manitoba Ltd., which owns 25%. The other two, under loan agreements dated May 20, 2025, were $14,012,862 from Highgate and $6,443,871 from R.I.S. Media Ltd., each at 10%, with interest capitalized rather than paid for the last four fiscal quarters, $1,600,083 of it by April 28, per the Pre-Filing Report of the Proposed Monitor, May 4, 2026, paras. 1.4, 6.9–6.11. The affidavit identifies R.I.S. Media as "an affiliate and indirect shareholder" of the company and Highgate as "an affiliate," per the Affidavit of Shamsh Kassam, May 1, 2026, paras. 24–26. The proposed monitor, while expressly giving no legal opinion on the intercreditor agreements, understood them to rank the senior facility first, the Highgate and R.I.S. Media loans next and pari passu, and the two shareholder notes last, per the Pre-Filing Report of the Proposed Monitor, May 4, 2026, para. 6.15. "The Senior Lender and the Affiliate Lenders are direct or indirect shareholders or affiliates of the Applicant," the monitor summarized in July, per the Second Report of the Monitor, July 20, 2026, para. 6.1.

Highgate also supplied the interim financing, a revolving facility of up to $3.0 million at 10%. The proposed monitor called Highgate "a natural and appropriate interim lender" given its existing position, said the company had no other immediate alternative, and set the rate against comparable facilities ranging from 4.2% to 18%, noting "no fees or other economics for the DIP Lender," per the Pre-Filing Report of the Proposed Monitor, May 4, 2026, paras. 9.3, 9.6. Through July 10 the company had not needed to draw on it, per the Second Report of the Monitor, July 20, 2026, para. 7.3.

Local counsel in Manitoba and British Columbia gave opinions that the security was valid and perfected under those provinces' law; for the seven other jurisdictions the monitor, citing cost, reported the lenders' registrations instead of opinions, per the First Report of the Monitor, May 12, 2026, paras. 8.3–8.4. Unsecured creditors were owed about $7.0 million, and gift card obligations came to about $900,000 more, per the Pre-Filing Report of the Proposed Monitor, May 4, 2026, paras. 5.11–5.12. In May the monitor told the court it was "not anticipated that there will be sufficient realizations that will result in a distribution to unsecured creditors," and that "the secured creditors are the fulcrum creditors in this case," per the First Report of the Monitor, May 12, 2026, para. 6.19.

A liquidation ahead of its forecast

Gordon Brothers Canada ULC ran the sale as consultant for 2% of gross merchandise proceeds and 20% of proceeds from furniture, fixtures and equipment. The company chose it partly for its "prior working relationship and familiarity with the Applicant and other retailers affiliated with the Shareholders," per the First Report of the Monitor, May 12, 2026, paras. 5.2, 5.4. Four stores closed shortly after filing, and the sale opened in the other 124 on May 15 with approximately $13.1 million of inventory at landed cost, per the Second Report of the Monitor, July 20, 2026, paras. 4.1–4.4.

By July 10 receipts had reached $25,210,000 against a forecast of $16,421,000. The monitor credited "materially greater-than-forecast gross margin and sales volumes" and better FF&E proceeds, and the company held approximately $14.0 million in cash where the forecast had projected $6,750,000, per the Second Report of the Monitor, July 20, 2026, paras. 7.1–7.3. The last stores closed on July 26. In all, the sale produced net proceeds of approximately $20.5 million from merchandise and approximately $613,000 from FF&E; store employees were terminated by July 29 and head office staff by August 14, each paid final wages and accrued vacation, per the Third Report of the Monitor, Sept. 1, 2026, paras. 4.1–4.6.

Some were owed termination and severance pay that the company was "unable to satisfy in the circumstances," per the Second Report of the Monitor, July 20, 2026, para. 9.5. On July 27 Justice Grammond declared the former employees to be individuals to whom the Wage Earner Protection Program Act applies. The same order directed the company to pay Highgate, as senior lender by assignment, everything owing under the 2010 CIBC credit agreement, and extended the stay from September 11 to December 18, 2026, per the Distribution, WEPPA Declaration and Stay Extension Order, July 27, 2026, paras. 2–4. The payment, approximately $7,128,000 in full satisfaction, was made on August 4, per the Third Report of the Monitor, Sept. 1, 2026, para. 4.9.