'Unorthodox' business transactions have been uncovered by a preliminary investigation into Canadian giant Dylex Ltd according to a representative of trade creditors who are owed around $60m by the chain.

Dylex was sold in May for $68m, to Hardof Wolf, a shell corporation owned by McCrory Corp. Creditors are now alleging that money that should have been repaid to them has been funnelled by Hardof to McCrory.

A report issued by the Dylex receivers shows that Dylex had shareholders equity of $105.4m the day before it was acquired by Hardof Wolf. By the time the company filed for bankruptcy protection, it had acquired a book value deficiency of $2m. The report showed up a number of other inconsistencies and odd transactions.

As the investigation continues, the Dylex Fairweather chain is up for sale by the receiver.

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