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Aldo asks for creditors' protection

May 11, 2020 Canada
Aldo asks for creditors' protection
The Canada-based group, created in 1972, requested a creditors' agreement at the Quebec Superior Court. The same procedure was initiated in the United States and Switzerland might follow
“Aldo is one of the main brands of footwear and fashion accessories in the world, with a solid history of growth for almost half a century. It is no secret that the retail sector has undergone rapid and significant changes in recent years”, underlined David Bensadoun, CEO of the Aldo Group. “We were evolving in a model for transforming our businesses to face these challenges; however, we did not count on the impact that the Covid-19 pandemic would have on our businesses and our cash flows”.

The Aldo Group has announced that an order of protection was granted in their favour in Canada under the Companies’ Creditor Arrangement Act (CCAA). In addition, and triggered by the CCAA process in Canada, the Aldo Group has voluntarily filed for Chapter 15 in the United States and will be filing a similar reorganization proceeding in Switzerland.
 
The CCAA is a Canadian law that facilitates the restructuring of debtor companies and facilitate compromises and arrangements between debtor companies and their creditors. It provides a path for companies to restructure operations while continuing to operate day-to-day with continuity and stability.

As Aldo underlined in a release, the proceedings are not bankruptcy proceedings and the companies’ intention is to restructure and reach a settlement with its creditors with a view to continue as a going concern without interruption: "Reorganization proceedings facilitate this process by providing a framework to carry out negotiations with creditors, and by prohibiting certain actions that could be detrimental to the companies or their operations while the restructuring progresses. In this respect, the CCAA and similar proceedings seek to balance the interests of stakeholders, and will, among other things, be subjecting the operations of Aldo to an oversight by the Court and prohibiting certain actions by creditors, such as prohibiting cancellation of agreements by co-contracting parties; claiming an acceleration of payments; or initiating proceedings against Aldo, their assets or operations".
 
Aldo has also reiterated its engagement towards its franchisee network recognising they "are an integral part of their success". The International Franchisee & wholesale business is a very strong profitable business. It is an integral part of the future and will continue to operate hand in hand with its partners across the world".

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