ksv advisory inc. Page 3 of 5
2.0 Background
1. The Company was founded in 1972. The Company was Canada’s largest retailer of
leather apparel and accessories. The Company’s subordinated voting shares were
listed on the Toronto Stock Exchange (“TSX”) and, until February 4, 2016, traded
under the symbol “DL”. On February 4, 2016, the Investment Industry Regulatory
Organization of Canada issued a cease trade order in respect of the shares. On
March 17, 2016, the Company’s shares were delisted from the TSX.
2. The Company leases its Toronto based head office (the “St. Clair Facility”). The St.
Clair Facility also served as the Company’s manufacturing, warehouse and
distribution center. The Company also leases a separate distribution facility in
Toronto.
3. The Company’s merchandise is predominantly marketed under the “Danier” brand
name and is currently sold in 81 leased stores across Canada.
4. As a result of the bankruptcy, all of the Company’s employees were terminated on the
date of bankruptcy. Pursuant to the terms of the Receivership Order, the Receiver
engaged approximately 900 of the Company’s former employees on a temporary and
day-to-day basis to assist with the wind-down of the Company’s business. The
Company’s workforce is not unionized and the Company does not maintain a pension
plan.
5. Additional information about the Company’s insolvency proceedings is available on
the Trustee’s website at: http://www.ksvadvisory.com/insolvency-cases-2/danier-
leather-inc/.
3.0 Agency Agreement and Exiting Locations
1. The Agency Agreement was approved by the Court on March 7, 2016. Pursuant to
the Agency Agreement, inter alia, the Agent is selling the Company’s inventory and
furniture, fixtures and equipment located at 76 of the Company’s store locations (the
“Sale”).
2. Pursuant to the Agency Agreement, the Agent is required to reimburse the Company
for occupancy costs for store locations subject to the Sale and to provide the Company
with seven days’ notice prior to vacating a store location, following which occupancy
costs for that location(s) would become the Company’s obligation.
3. The Sale is performing better than expected. The Agency Agreement contemplates
an exit date of June 30, 2016; however, the Agent has advised that the Sale is likely
to be completed several weeks earlier and that it will soon be exiting some stores.
4. Monthly occupancy costs for the Company’s leased locations total approximately
$1.6 million, inclusive of base rent, common area and maintenance charges. A
schedule of the Company’s leases is provided in Appendix “B”.