Renowned furniture retailer Bad Boy Furniture is officially bankrupt.
Back in November, the Toronto-area company filed a notice of intention under the Bankruptcy and Insolvency Act, citing the goal to restructure its business.
That same month, an Ontario court approved Bad Boy to get started with its liquidation sales and gave the business until Jan. 23 to file its restructuring proposal.
Bryan Gelman, senior managing partner of Albert Gilman Inc., a licenced insolvency trustee firm, told CTV News Toronto that a notice of intention is a process under the Bankruptcy Insolvency Act.
“[It] allows you to effectively take 30 days or more with extensions of the court to assess whether you can make an offer to your creditors to try and settle the financial dilemma that you’re in,” Gelman said.
But, Bad Boy failed to do this, as revealed in a document filed Jan. 24.
“The debtor has failed to file a cash-flow statement or a proposal within the provided period following the filing of the notice of intention or within any Court-granted extension and is thereupon deemed to have made an assignment,” KSV Restructuring Inc., the bankruptcy trustee Bad Boy hired, said.
Since they did not do this in time, Gelman said the company effectively made an assignment of bankruptcy, meaning Bad Boy has to turn over its assets and property to a trustee in order to make a distribution to the creditors.
Bad Boy’s debts owed to unsecured creditors total $13.7 million, including $2.3 million to Whirlpool Canada and $840,921 to Samsung Appliances. Additionally, the retailer collected $4.5 million in deposits from customers for furniture that had not yet been delivered at the time the notice of intent was filed.
With files from The Canadian Press