Target’s Canadian Woes Worsen With Supplier Spat

The dispute between Target Canada and its suppliers fighting to get paid since the retail chain went bust in the nation has reached a new peak since those suppliers brought Target Canada to court.

According to reports, accusations are now emerging that Target Canada strategically told suppliers to switch invoices in order to benefit from the company’s creditor protection granted after filing for bankruptcy.

Toronto-based market research company Advitek claims Target told the firm to switch an invoice from Target’s US corporate, where it normally sent invoices, to Target Canada just two days before Target Canada filed for bankruptcy.

In an email to Target’s US operations, Target Canada manager Kathrin Menge said that this switch is “very suspicious.” That email, dated Jan. 22 – one week after Target Canada received creditor protection – has reportedly been entered into evidence at Ontario Superior Court as suppliers fight to receive at least partial payment left from Target Canada’s unpaid invoices.

According to reports, that alleged invoice switch has left Advitek with an unpaid $232,328 bill.

In their court battle, numerous suppliers are now seeking to determine the exact moment Target decided to exit Canada on suspicions the company may have avoided paying suppliers while buying up inventory ahead of its bankruptcy filing, a move that would have allowed Target Canada to cash in on going-out-of-business sales without paying its vendors.

On Thursday (Feb. 19), Justice Geoffrey Morawetz agreed to a deadline for Target to produce information relating to the dispute, as well as allowed suppliers’ lawyers to cross-examine Target Canada’s legal counsel, moves reports say are small victories for the nearly 2,000 vendors now seeking compensation from Target Canada.