TORONTO -- An Ontario Superior Court of Justice approved an application to place HMV Canada Inc. into receivership on Friday.
HUK 10 Ltd., which lent money to the struggling chain, filed the application to the court Thursday.
It claimed HMV owes it nearly $39 million and has received no cash payments since Nov. 2014.
HMV would require between $2 million and $5 million annually in cash to stay open, according to court filings, and the company was losing $100,000 a day as customers turned towards online media in recent years.
Senior Justice Geoffrey B. Morawetz approved the application and appointed Gordon Brothers Canada ULC and Merchant Retail Solutions ULC as the agent to sell HMV's remaining merchandise.
Legal documents state that closing stores must cease operations by April 30. That includes the Montreal store at the corner of Ste. Catherine St. and Peel, which first opened in 1989.
HMV operates 102 stores in Canada and employs about 1,340 people, most of them at its retail locations.
CHOM DJ and pop-culture analyst Jason Rockman said the writing has been on the wall for the retailer for years as they tried, and failed, to adapt to changing times.
"Ever since the summer of Napster, since 200, there's just been a devaluasization of music," he said. "A lot of that should be blamed on the record labels because the labels didn't adapt quick enough to a changing music-consuming model."
As music downloading wreaked havoc on the music industry, HMV tried to pivot by focusing on DVD sales. That, too, has taken a major hit due to streaming services such as Netflix.
The chain tried to refocus on music, especially the niche vinyl market and made more retail space available for clothing and collectibles, but never managed to succesfully rebrand itself.
