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w w w . C A N A D I A N L a w y e r m a g . c o m J U N E 2 0 1 5 45 In the Target proceeding, its parent company is also the debtor-in-possession lender and offered up to $175 million in credit during the liquidation process, at an annual interest rate of five per cent. The law firm representing laid-off employees was retained by Target to administer the $70-million trust, which works out to about $4,000 per each former employee, during the wind-down period. Brown says it is appropriate for Target to pay for the employ- ees' legal representation because it would be difficult for them to organize on their own. Changes should be made though to formally protect everyone's interests. "Because the company controls the information, it is highly unlikely employees or creditors, can access it early enough" to make the necessary challenges in court during this process, says Brown. Information about just what was happening within Target and its Canadian subsidiary in the weeks and months leading up to the filing has been an ongoing issue. Materials filed with the court on behalf of Target state that very few individuals knew about the possibility of a CCAA filing before the final decision was made. The person in charge of merchandising at Target Canada was not informed of the possibility of liquidation until the week before the application was filed. "At no time did TCC or Target Corporation direct any TCC employee to increase (or reduce) inventory levels as a result of possible or contemplated proceed- ings under the CCAA or BIA or otherwise," wrote Sandler in a March 16 letter. An intercompany debt of $1.9 billion related to the leasing arrangements for Target is also a source of contention, in terms of how this claim will be handled by Morawetz. Lou Brzezinski, who represents some of the Target Canada suppliers, says, "there is no real mechanism to challenge the inter-company debt," under the CCAA. "That is why Justice Morawetz has given suppliers large examination rights to try to ensure there is a level playing field," says Brzezinski, a partner at Blaney McMurtry LLP. He has praise for the way Morawetz has presided over the case, but he too would like changes to the CCAA. "There should be some minimum statutory protection for stakeholders if CCAA is going to be used more for liquidation," says Brzezinski. There is nothing unusual about a court being asked to assess a claim related to intercompany debt, says Sandler. "It is very com- mon and appropriate in CCAA proceedings for intercompany claims to be addressed through a transparent court ordered claims process," she explains. Meanwhile, as the arguments in Ontario Superior Court con- tinue toward its eventual conclusion, the Canadian experience for Target is a brief, if unsuccessful event in its corporate history. The loss in 2014 for US$4 billion was offset partially by a $1.6-billion tax benefit. The additional expenses from the wind down in Canada are not expected to be "material" to Target's future quarterly results it said in SEC filings this spring. And in the three months after Target's CCAA filing, its share price had increased by just over 10 per cent. On WestlawNext Canada, you can search all content with a single request. Case law and legislation, as well as exclusive annotations, commentary, legal memos and court documents. Related content is continuously recommended, allowing you to expand your search for additional insight. Discover more at westlawnextcanada.com 00227MO-A48600 SEARCH RESULTS SUGGEST RELATED CONTENT FOR ADDITIONAL INSIGHTS. DEBTOR–CREDITOR LAW Sam Babe, Laurence M. Olivo, and DeeAnn Gonsalves An essential practice guide from the Emond Professional Series 60 Shaftesbury Ave, Toronto ON w. emond.ca e. orders@emond.ca p. 416-975-3925 f. 416-975-3924 Emond_CL_June_15.indd 1 2015-05-11 10:47 AM

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