TORONTO -- Target Canada Co. said Friday it has reached an agreement with its former landlords whose leases were terminated as part of the company's plans to shut down its Canadian stores.

The retailer said the settlement provides a framework for a resolution of its court-supervised windup and deals with the landlords' claims against both Target Canada and Target Corp.

Under the agreement, the landlords will support the company's plan under the Companies' Creditors Arrangement Act.

Landlords holding guarantees from Target Corp. will receive payment in exchange for a contractual release.

The U.S. retailer announced last year it was shutting all of its Canadian stores, only two years after its highly anticipated launch north of the border.

Target said the monitor overseeing the process estimates that unsecured creditors will receive approximately 66 per cent to 77 per cent of what they are owed.

The company said it expects creditors to have a chance to vote on its plan on May 25 and, subject to approval, intends to seek court approval on June 2.