Target gets court approval to sell 11 leases

Target Canada has received court approval to sell leases on 11 of its Canadian locations to Oxford Properties Corp. and Ivanhoe Cambridge.

An Ontario judge gave the go ahead to the transaction, though the value of the agreement is being kept under wraps until Friday.

The decision marks a small step in the liquidation of Target Canada, which made its insolvency filing in January after determining it would take years to turn a profit.

However, there are still several hurdles to overcome.

Court filings made earlier this week show that Target Canada ended an agreement with a property company it established for its real estate assets, and it now claims to be owed $1.9 billion, which makes it the largest creditor in the proceedings.

Suppliers dispute Target's move, saying it could eat up all the $400 million they claim to be owned in the insolvency.

"This has to be a very full, transparent process not run by Target Canada,'' said Justice Geoffrey Morawetz of Ontario Superior Court .

He added that "creditors have to be satisfied'' that claims made by Target's former property company have gone through a vetting process.

In January, Target filed for creditor protection and abruptly announced that it was closing down all 133 of its stores in Canada because it would be unable to make a profit for at least five years.