The John Forsyth Shirt Company Ltd. (UPIC: FORSYTH), based in Toronto, Ontario, recently released a letter to its customers announcing that the Ontario Superior Court of Justice had issued an initial order under the Companies’ Creditors Arrangement Act (CCAA) authorizing Forsyth to restructure its business under a court-supervised process. This was necessitated by the loss of Duty Remission, a grant from the Canadian government that enabled the supplier to manufacture in Canada. However, in December 2012 the Canadian government decided to abandon this program, forcing the company to close its manufacturing facility and reorganize. The initial order also appointed BDO Canada Limited (BDO) as monitor during the CCAA proceedings.
The CCAA allows companies such as Forsyth that are experiencing financial difficulty to financially and operationally restructure their affairs. The monitor, a licensed restructuring professional and an independent third party approved and appointed by the court, will closely oversee Forsyth during the CCAA process and assist it in completing its restructuring in a timely and cost-effective manner. The company expects this process to be completed by the end of May.
Forsyth wishes to reassure its customers that it has the necessary cash flow to continue paying its day-to-day overhead and to purchase the goods and services it needs to operate and serve its customers. Forsyth’s senior lender supported its application under the CCAA and will continue to work with the company during the course of the proceedings. The CCAA proceedings are well planned, well financed and well organized. Forsyth will continue normal operations throughout this process.