We are the Court-appointed monitor in proceedings under the Companies’ Creditors Arrangement Act (“CCAA”) involving the partners of Metro 360 General Partnership (“Metro”). We were the Proposal Trustee until the proposal proceedings under the Bankruptcy and Insolvency Act were continued under the CCAA.
Since the early 1940s, Metro’s core business was primarily wholesaling and distributing books and magazines to thousands of retailers across Canada. At its peak, Metro’s annual revenue exceeded $500 million. Metro supplied to thousands of independent grocery and other retailers across Canada. The industry has been consolidating over a number of years – there were at one time as many as 33 Canadian distributors in this space; however, a major downturn and shift to digitalized media in the paper-back literature and periodical industry caused a significant period of consolidation whereby Metro was one of only two remaining major Canadian distributors. The Covid-19 pandemic accelerated the need for Metro to discontinue its literature business. As a result, Metro’s literature business and assets were sold at the outset of its insolvency proceedings to the sole remaining Canadian wholesale distributor.
A few years prior to the commencement of insolvency proceedings, Metro began to diversify its literature business by wholesaling consumer packaged goods (“CPG”), including food products, music, consumer electronic accessories and a line of items referred to as As-Seen-On-TV (“ASOTV”) products. Metro also owns equity interests and manages certain other CPG brands and businesses.
Our mandate with Metro includes:
- completing a transaction for the literature business, which was approved by the Court as part of the commencement of the insolvency proceedings and closed shortly thereafter;
- facilitating a restructuring of the Metro business around its CPG business, including certain investments in which it has an ownership interest; and
- assisting Metro to prepare a restructuring plan to its creditors, including considering tax implications and other issues.
Metro intends to continue to operate and grow its CPG businesses on a going-concern basis.