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Goodwill CEO resigns, bankruptcy process goes ahead

Last Updated Feb 29, 2016 at 12:17 pm EDT

The closed Goodwill store at Richmond and Jarvis.

The CEO of Goodwill Industries of Toronto, Eastern, Central and Northern Ontario has resigned, as the bankruptcy process moves ahead for the non-profit group.

“With a trustee in place, there is no longer a role for a CEO,” Keiko Nakamura said in a statement Monday, adding she will continue to assist the trustee on a voluntary basis.

“I have had the privilege of being part of this organization and I have witnessed over the last month what Goodwill has meant to many. I deeply regret that there is no way to save this company.”

On Jan. 17, Goodwill closed 16 stores, 10 donation centres and two offices – affecting more than 430 workers – due to cash flow problems. Goodwill locations in London, Sarnia, St. Catharines and Hamilton were not affected.

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Goodwill owes $6M after declaring bankruptcy, has $1,300 in bank account

Goodwill employees to be paid, CEO says

Goodwill declared bankruptcy on Feb. 7, but contemplated making a proposal to its creditors that would annul the bankruptcy and allow the company to reopen some stores.

However, on Monday, Nakamura also said a plan to reopen profitable stores “cannot be achieved without significant financial investment.”

She added that after an “exhaustive” search, there is no “viable option that allows the organization to reemerge from the bankruptcy process.”

According to Goodwill’s bankruptcy proposal, 711 creditors are owed $6-million. Of that amount, $4.2 million is owed to former employees in vacation entitlement and severance.

In a document attained by CityNews earlier this month, Goodwill declared bankruptcy with $1,300 in its bank account, $835,308 in assets and $6,011,521 in liabilities.

(Click here to watch the video on mobile.)

A first meeting of creditors is being held Wednesday at the Richmond Hill Centre for the Performing Arts.

After the store closures, employees were initially told they would not be receiving their regular pay, but Goodwill later said they will be paid for the hours they worked up until Jan. 16, the day before the stores closed.

A website called Renew the Good has been set up to help ousted employees receive food, medication and rental assistance.

The non-profit group had operated for more than 80 years in Ontario providing affordable goods and helping people gain access to training and work.

(Click here to watch the video on mobile.)