Dylex creditors to receive part of their claim

To date, Richter's investigation has led it to suggest Dylex's new owners paid down McCrory's debts with money that should have gone to for Dylex creditors. McCrory subsequently filed for bankruptcy protection in the U.S. Richter lawyers believe their evidence points to a case of fraud, and are in the process of interviewing Dylex's former directors.

The Financial Post
February 20, 2002

Dylex creditors to receive part of their claim
$2.8M disbursement
Hollie Shaw

Creditors of Dylex Ltd. will get a piece of their claims today when the bankrupt retailer's interim receiver makes a $2.8-million disbursement.

The creditors, including landlords and apparel suppliers, have made $88-million in claims to Richter & Partners Inc. and the disbursement represents about 10¢ for every dollar they are owed.

Richter is trying to piece together what happened to the former retail heavyweight before and after it was sold for $68-million last May by Hardof Wolf Group, a shell company tied to U.S. dollar store chain McCrory Corp.

By mid-August, the operator of the Fairweather and BiWay chains had been forced into receivership after failing to pay its creditors.

To date, Richter's investigation has led it to suggest Dylex's new owners paid down McCrory's debts with money that should have gone to for Dylex creditors. McCrory subsequently filed for bankruptcy protection in the U.S. Richter lawyers believe their evidence points to a case of fraud, and are in the process of interviewing Dylex's former directors.

Peter Farkas, a partner at Richter, said the receiver has disallowed $2.5-million in claims and is currently reviewing $57-million in outstanding claims. Richter expects to make another 10¢ disbursement in "in a few more months," Mr. Farkas said.

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