Goodwill files for bankruptcy amid month of turmoil

Goodwill's Toronto-based operation has filed for bankruptcy following a month of turmoil at the corporation, which saw locked out workers and what corporation president earlier called a "cash flow crisis."

Corporation locked out workers, had 'cash flow crisis' over the past month

Keiko Nakamura, CEO of Goodwill Industries of Toronto, Eastern, Central and Northern Ontario, made the announcement in a statement Monday afternoon. (CBC)

Goodwill's Toronto-based operation has filed for bankruptcy following a month of turmoil at the corporation, which saw locked-out workers and what the corporation president earlier called a "cash flow crisis."

The corporation's president, Keiko Nakamura, made the announcement in a statement Monday afternoon.

Nakamura said Goodwill Industries of Toronto, Eastern, Central & Northern Ontario (Goodwill TECNO) is making the filing to preserve the assets of the corporation for its creditors, who are the corporation's former employees.

Nakamura added that the corporation will consider whether to make a proposal to its creditors that would, if approved, annul the bankruptcy and allow them to open some stores.

The Canadian Airport Workers Union, which represents some of the chain's workers, supports the bankruptcy plan, Nakamura's statement says.

The Goodwill at Richmond and George streets in Toronto is one of the locations shuttered last month. (Grant Linton/CBC)

450 workers affected

Last month, the corporation announced it would shut all of its 16 GTA stores, 10 donation centres and two offices in southern Ontario, affecting about 450 employees.

Employees only found out about the closures when they showed up to the shuttered stores on Jan. 17.

Bags of donations began piling up outside some Goodwill locations after the closures. 

The GTA stores affected are in Toronto, Mississauga, Brampton, Newmarket, Barrie, Orillia and Brockville.

Other Goodwill locations in Ontario, including Hamilton, St. Catharines, Sarnia and London, are not affected, because they are operated by different boards. Goodwill's Ottawa outlet closed just before the end of 2015 after management said it had become unprofitable.

Goodwill receives an annual $4 million subsidy from the federal and provincial governments.

Last week, Goodwill Industries International said Goodwill Industries of Toronto, Eastern, Central and Northern Ontario has been "disaffiliated" with them. The international branch of Goodwill said the store closures, which it called "egregious acts," are not in compliance with their membership standards.

This means the Goodwill operation run by Nakamura will no longer be able to use the Goodwill name, trademarks and logos.

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