{"id":5221,"date":"2014-11-10T00:00:00","date_gmt":"2014-11-10T05:00:00","guid":{"rendered":"https:\/\/dev-ginsberg-gingras.flywheelsites.com\/impacts-courte-echelle-jacob-bankruptcies\/"},"modified":"2021-04-13T18:16:21","modified_gmt":"2021-04-13T22:16:21","slug":"impacts-courte-echelle-jacob-bankruptcies","status":"publish","type":"post","link":"https:\/\/ginsberg-gingras.com\/en\/impacts-courte-echelle-jacob-bankruptcies\/","title":{"rendered":"The Impacts of La courte \u00e9chelle and Jacob\u2019s Bankruptcies"},"content":{"rendered":"

This time, it is official! La courte \u00e9chelle and Boutique Jacob Inc. are bankrupt.<\/strong> These two flagships of the Qu\u00e9bec economy are permanently closing their doors, a fact that will have impacts on many individuals.<\/p>\n

A contentious bankruptcy for La courte \u00e9chelle<\/h2>\n

The bankruptcy of La courte \u00e9chelle, on October\u00a010th 2014, saddened many people, given the major niche this business occupied in the Qu\u00e9bec publishing and literature world. However, it is rather the handling of the copyrights that has made the headlines lately.<\/p>\n

The problem stems from a contradiction between two acts. Authors were convinced that a clause in their contracts would enable them, should a bankruptcy occur, to reacquire their copyrights. But section\u00a083 of the Bankruptcy and Insolvency Act (BIA)<\/em> overrides this clause, as well as Qu\u00e9bec\u2019s Act Respecting the Professional Status of Artists<\/em> which supports that clause.<\/p>\n

Section\u00a083<\/a> of the BIA<\/em> offers three possible ways to consider the case of La courte \u00e9chelle:<\/p>\n

    \n
  1. Copyrights are reverted to the author if the work has not been published and if La courte \u00e9chelle incurred no expense for that work<\/strong>. The contract in force between the author and the publisher then becomes null.<\/li>\n
  2. Copyrights are reverted to the author, provided that:\n
      \n
    1. the work is not yet available in bookstores<\/strong>;<\/li>\n
    2. the author reimburses La courte \u00e9chelle <\/strong>for work already done\u00a0\u2014\u00a0editing, proofreading, layout, etc.
      \nAfterwards, the contract in force between the author and the publisher becomes null.<\/li>\n<\/ol>\n<\/li>\n
    3. Copyrights are reverted to the trustee in bankruptcy if the work has already been published<\/strong>. This trustee is then responsible to resale these copyrights. The amounts thus recovered are afterwards distributed amongst the various creditors of La courte \u00e9chelle in order to reimburse part of their losses.<\/li>\n<\/ol>\n

      Obviously, scenario\u00a03 applies to the majority of authors. Ironically, most of them are also creditors, given that La courte \u00e9chelle amassed more than $300,000 in unpaid royalties. In total, the debts of this business reach $4.1\u00a0million.<\/p>\n

      The call for tenders process began on Friday October\u00a031st 2014. Potential scenarios include:<\/p>\n

        \n
      1. A publisher makes an offer to rebuy the totality of La courte \u00e9chelle\u2019s catalogue. Such a scenario would definitely be ideal for the creditors, but is there a publisher who can afford to buy a business worth some millions of dollars?<\/li>\n
      2. A multinational decides to seize the opportunity to enter the publishing market by acquiring both La courte \u00e9chelle\u2019s catalogue and corporate name. However, before a multinational can proceed with such an acquisition, it generally conducts market studies and also develops business plans, all that to ensure that conditions are favourable. But all these measures take time.<\/li>\n
      3. Offers could be made to buy separately the various La courte \u00e9chelle\u2019s catalogues (youth literature, how-to books and adult literature). Proposals could even be made in order to acquire very specific copyrights, whose effect would be to fragment the catalogues. In such a scenario, revenues thus earned could be lower since less known works and their related copyrights may not find buyers.<\/li>\n<\/ol>\n

        Furthermore, the government\u2019s level of intervention remains to be seen. The Qu\u00e9bec\u2019s Culture and Communications Minister H\u00e9l\u00e8ne David has already promised that the government will help illustrators and authors to recover the copyright royalties that are owed to them.<\/p>\n

        No buyer interested in acquiring Jacob<\/h2>\n

        Last May, the financial difficulties of Boutique Jacob Inc. were fully exposed. In fact, the women\u2019s apparel retailer then instructed a trustee in bankruptcy to find a potential buyer, while protecting itself against its creditors. A notice of intention was therefore presented to allow for the preparation of a proposal.<\/p>\n

        In order to make the business more profitable and to spark the interest of prospective buyers, a major restructuring operation was initiated. This restructuring included in particular:<\/p>\n

          \n
        • the closing down of 52\u00a0stores (only stores in Qu\u00e9bec and Ontario were to remain in operation);<\/li>\n
        • the elimination of several positions at the business\u2019s head office, in Montr\u00e9al;<\/li>\n
        • the hiring of Ms.\u00a0\u00c9laine Zaka\u00efb as head of the restructuring and vice-president, Strategy and Finances;<\/li>\n
        • Ms.\u00a0Zaka\u00efb\u2019s recovery plan, which mainly focused on offering apparel that is \u201cmade in Qu\u00e9bec\u201d (design, making and manufacturing in Qu\u00e9bec).<\/li>\n<\/ul>\n

          Unfortunately for Boutique Jacob Inc., six months after the beginning of the restructuring process, no potential buyer had submitted a tender<\/strong>. Its founder, Mr. Joseph Basmaji, would have envisioned rebuying the business, but, given the disappointing volume of sales recorded this fall, he abandoned the idea. It seems that the prospects of recovery were not at all promising when considering the difficult economic times, and the changing consumers\u2019 shopping patterns.<\/p>\n

          The business has officially filed for bankruptcy on October\u00a021st 2014.<\/strong> No date has been specified since for the permanent closure of the shops. In any event however, the 42\u00a0remaining shops will cease their activities and 475\u00a0employees will lose their job<\/strong>. This may create, at the start of the holiday season, an important stress on the finances of these employees and on their family. Moreover, even though there is no such indication for now, it is not uncommon for employees to be unable to obtain all their wages when a business goes bankrupt.<\/p>\n

          Between now and its permanent closure, Boutique Jacob Inc. will sell its stores inventories to create the estate of the bankrupt. Afterwards, any property having a resale value\u00a0(clothing, display units, office furniture and equipment, etc.) will be seized and liquidated. The creditors will then share the bankruptcy receipts, which will be used to reimburse partially the debt owed to them by Boutique Jacob Inc. The first creditors\u2019 meeting is incidentally scheduled for November\u00a012th 2014.<\/p>\n","protected":false},"excerpt":{"rendered":"

          This time, it is official! La courte \u00e9chelle and Boutique Jacob Inc. are bankrupt. These two flagships of the Qu\u00e9bec economy are permanently closing their doors, a fact that will have impacts on many individuals.<\/p>\n","protected":false},"author":37,"featured_media":5222,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"footnotes":""},"categories":[667,675],"tags":[768,740,757],"class_list":["post-5221","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-blog","category-insolvency-news","tag-bankruptcy","tag-job-losses","tag-retail-stores-and-businesses"],"acf":[],"yoast_head":"\nThe Impacts of La courte \u00e9chelle and Jacob\u2019s Bankruptcies | Ginsberg Gingras<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/ginsberg-gingras.com\/en\/impacts-courte-echelle-jacob-bankruptcies\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"The Impacts of La courte \u00e9chelle and Jacob\u2019s Bankruptcies\" \/>\n<meta property=\"og:description\" content=\"This time, it is official! 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