The CGC is also working with GFI’s receiver to realize on proceeds from the sale of the company’s grain inventory. Those with outstanding elevator receipts may receive a portion of the funds once the receivership is concluded.

GFI, headquartered in Toronto, was a plant-based and plant protein company with sites in Saskatchewan. It purchased peas, lentils, chickpeas and other high-protein crops.

The company announced in May it would wind down operations as it couldn’t service its debts. In a May news release, the company blamed “recent macro-economic events” that made obtaining ingredients difficult and led to a decline in revenue.

The CGC said it received 29 eligible claimes totalling $2.661 million for unpaid deliveries to GFI. The company had $2 million in security, so the individual payments will be prorated. Cheques have been mailed to producers, the commission said.

The post Producers to be paid out 75 per cent on claims against Global Food and Ingredients appeared first on Country Guide.

A receivership order filed June 12 in the Court of Kings Bench in Winnipeg has appointed BDO Canada Limited as receiver and manager for Genesus Inc., Genesus Genetics and Can-Am Genetics, Inc.

Genesus Inc., and Can-Am Genetics operate out of Oakville, Man. Genesus Genetics Inc., is incorporated in South Dakota, court records show.

According to an affidavit filed by a Bank of Montreal representative, the bank held mortgages for Genesus and Can-Am and had a payment guaranty agreement with Genesus Genetics Inc.

In mid-2023, BMO served notice that it intended to pursue enforcement action after repayment obligations were breached. Those actions were stayed in September 2023, when BMO agreed to delay enforcement under certain forbearance conditions. That forbearance agreement expired Jan. 15, the affidavit said.

Genesus bills itself as “the world’s largest independent producer of high health registered purebred swine in the world owning over 80% of all registered purebred breeding stock in Canada,” says the company’s website.

According to court records, Genesus had approximately 61 employees at the beginning of the year and about 17,700 hogs. Can-Am Genetics had approximately 13 employees.

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The company, along with Ram Industries Inc., was placed in receivership June 11 after numerous financial difficulties were reported and the company missed payments to BMO. It owes BMO more than $16.6 million.

Ernst & Young on July 2 posted that it is accepting offers to purchase Leon’s physical assets, or proposals to liquidate the assets, until July 31.

The assets include tools, equipment, rolling stock, office furnishings and real estate.

Buyers may purchase the entire block or individual items.

The real estate at 135 York Road is a 93,235 sq. foot facility on 12.79 acres. It also has a 1,700 sq. foot storage building and a 3,240 sq. foot Quonset.

Leon was in business for more than 70 years.

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After announcing last month it would submit a bid for the next-to-new Merit assets, Vancouver-based plant protein firm Burcon NutraScience said Monday it’s now “participating in a bid” for Merit in co-operation with “an industry plant protein company.”

Burcon didn’t identify the other party in its release Monday. It did say that if their joint bid is successful, the two parties “intend to restart the facility and together, strive to reach profitability.”

Burcon CEO Kip Underwood said it “firmly believe(s) that Burcon’s technologies and process expertise are fundamental to the Merit facility’s future profitability.”

Having just opened for business in early 2021, with major shareholders also including U.S. agrifood firm Bunge and former executives of Hemp Oil Canada, Merit was placed into receivership March 1.

Court-appointed receiver PricewaterhouseCoopers (PwC), in its first report filed March 31 with Court of King’s Bench in Winnipeg, said it had set a deadline of last Friday (April 21) for formal bids on the Merit assets, and expects to “determine the accepted offer” by Friday this week.

PwC hasn’t yet said how many formal bids it got for the Merit assets by the deadline. In its March 31 report, it said it had already conducted 14 visits to Merit’s Winnipeg plant site with potential buyers and scheduled five more, “with several interested parties traveling from overseas and other parts of North America.”

Burcon, in its release Monday, reiterated it “expects there to be competing bids (and) there is no assurance that the bid will be accepted by the receiver.”

PwC had said in its report that it expects to have reached a “definitive agreement” with a bidder no later than May 12 and to formally close a deal by the end of May at the latest.

If the Merit plant does reopen, it would then need to reconnect its supply chains with farmers in its catchment area.

Daryl Domitruk, executive director with Manitoba Pulse and Soybean Growers, last week told the Manitoba Co-operator that, to his knowledge, growers who’d contracted with Merit for this year have been released from those agreements.

“Then the question is, do I continue to grow peas or do I switch to another crop,” he said. “That’s a decision that the growers have probably made by now.” — Glacier FarmMedia Network

The post Merit Foods co-owner Burcon partnering on bid for assets appeared first on Country Guide.

Domitruk said MPSG learned about Merit’s financial situation through the media. He also added that some Manitoba pea growers delivered contracts to Merit Foods as it had a smaller acreage requirement — 10,000 acres, compared to Roquette’s 120,000.

“The potential loss of that outlet is important for them,” he said. “But in the grand scheme, we’re very satisfied that we’ll recover.”

Vancouver-based protein firm Burcon NutraScience, which has a 31.6 per cent stake in Merit, said Friday it “intends to submit a formal proposal to acquire” the Merit business.

Domitruk is hopeful a buyer can be found, but time is of the essence.

“Any requirement for peas that any buyer would have, they would need to know pretty quickly because farmers will be making planting decisions,” he said.

Domitruk added that the pea-processing sector in Manitoba would survive Merit’s potential absence as there are other companies doing business in the province.

“In the long term, we still think there’s value in the industry. It’s a setback to lose any processor. We were hoping that rather than losing processors, we were on the front end of an overall trend to have more processing done in the province. We still think that’s possible, so we’re regarding it as a temporary setback for now.”

PricewaterhouseCoopers (PwC) announced last Wednesday it’s now the court-approved receiver for Merit and the numbered company that owns Merit’s processing plant and property in Winnipeg’s CentrePort industrial park.

Federal lenders Export Development Canada (EDC) and Farm Credit Canada (FCC) filed Feb. 24 for the receivership order, claiming Merit owes them principal and interest totalling $95 million.

Burcon CEO Kip Underwood wrote in a Feb. 8 letter to stakeholders that while the company had seen improved production and sales performance over the previous six months, “the overall financial performance of the business has fallen short of expectations and led to the current cash flow concerns.”

— Adam Peleshaty reports for MarketsFarm from Stonewall, Man. Includes files from Glacier FarmMedia Network staff.

The post Pulse weekly outlook: Manitoba growers not worried about Merit situation appeared first on Country Guide.

Two days after Merit entered a court-ordered receivership, Vancouver-based Burcon NutraScience announced Friday it “intends to submit a formal proposal to acquire the business.”

Burcon said Merit’s receivership “was an anticipated step in the process of addressing Merit’s financial situation” and “does not alter” Burcon’s plan to buy the business.

Burcon, whose current ownership stake in Merit is about 31.6 per cent, said Friday it “remains actively engaged in discussions” with PricewaterhouseCoopers (PwC), Merit’s court-appointed receiver.

The receivership was requested in a Feb. 24 filing by federal lending agencies Export Development Canada (EDC) and Farm Credit Canada (FCC), who in 2020 provided debt financing toward Merit’s construction and start-up. In their filing, they put the principal and interest owed to them at about $58.5 million and $36.5 million respectively.

Burcon, whose ownership group also includes U.S. agrifood giant Bunge and former executives of Hemp Oil Canada, said it “believes that it is in a unique position to bring Merit’s business to profitability.”

“Merit’s facility was designed and built to produce protein ingredients using Burcon’s technologies,” Burcon CEO Kip Underwood said in the company’s release Friday. “Merit’s business is a strong strategic fit for Burcon by providing additional revenue sources, better connection to customers and markets, and direct influence over the manufacture of Burcon’s protein ingredients.”

Burcon said it has the “process engineering expertise to improve bottom line performance through production efficiency gains” and can leverage its “innovation portfolio” to launch “new plant proteins beyond pea and canola.”

Merit’s co-CEO Ryan Bracken had said in a LinkedIn post on Wednesday that “while our proteins have been formulated into countless products globally, we couldn’t quite get to the level of cashflow needed to operate the business profitably, quick enough.”

EDC and FCC had said Feb. 24 they expected Merit to run out of operating cash by around March 3 or 4 and would then “no longer be able (to) operate its business as a going concern.”

The construction of the Merit plant in Winnipeg’s CentrePort industrial park came during the rise of the COVID-19 pandemic in North America, which Bracken said meant that “we started up prior to understanding the full impact of what COVID could do to our business plan.”

The pandemic and other factors ultimately led to a “doubling” of input costs, border closures, customers shuttering their own research and development facilities, interest rates “rising exponentially” and lenders and investors becoming more risk-averse, he said.

In all, he said Wednesday, the company’s move into receivership spells “the end to Merit as it stands today.” — Glacier FarmMedia Network

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“While we regret producers didn’t get 100 per cent (of what they were owed) we worked diligently to maximize the amount they were paid for their deliveries,” Remi Gosselin, the CGC’s head of communications and corporate information services said in an interview Wednesday.

While most of the money comes from security W.A. Grain posted to cover farmer liabilities as required under the Canada Grain Act, some came through CGC efforts during the bankruptcy process.

Why it matters: While the Canadian Grain Commission tries to ensure grain companies post enough security to cover what they owe farmers for grain, sometimes, as in this case, it falls short. That’s why the CGC urges farmers to get paid upon delivery and cash their cheques immediately.

The CGC suspended W.A. Grain’s grain dealer licence and five primary elevator licences on April 20 last year; the company entered receivership April 26. Court orders were granted Sept. 23 approving the sales of the company’s five sites in Western Canada to three separate buyers.

The CGC determined 126 farmers owed money for grain delivered to W.A. Grain were eligible for a share of funds secured by the commission.

To qualify, farmers needed official receipts documenting deliveries, which had to have occurred within 90 days of delivery or 30 days of getting a cheque.

Of the $5.6 million in compensation, $4 million — representing about 71 per cent of the total — came through security W.A. Grain posted with the CGC, as is required under the Canada Grain Act, Gosselin said.

Just under $200,000 — 3.6 per cent of the total — came through the bankruptcy process.
The rest — $1.4 million — 25 per cent of the total — came from revenues earned when the receiver in bankruptcy sold W.A. Grain’s grain inventory.

“The Canadian Grain Commission had to intervene before the courts,” Gosselin said. “We used the Canada Grain Act to maximize compensation for all eligible producers. Under a distribution plan that was approved by the Court of Queen’s Bench eligible claimants were able to receive funds from three different pools of money.

“The CGC has always held that grain in inventory that was not paid for still belonged to producers. What happened in previous situations is that receivers would basically come in and liquidate all assets and then provide the money to secured creditors,” which didn’t include farmers who hadn’t been paid, he said.

The commission he said, has “successfully over the past few years argued before receivers and before the courts that that part of that money belongs to producers.”

In one case a few years ago some unpaid farmers were able to retrieve ‘like grain’ from a financially troubled grain company, reducing the amount of posted security needed to compensate farmers.

In the W.A. Grain case the $1.5 million shortfall in compensation averages more than $11,900 per farmer.

Ideally grain companies security held by the CGC should cover farmer liabilities, but that’s not always so, despite the CGC’s best efforts.

“An important point here is that the payment protection program at the grain commission never guarantees that producers will be fully compensated for licensee failures,” Gosselin said.

The commission, he said, fixes the amount of security to be provide by licensees based on monthly liability reports submitted by the licensees and licensees are responsible for the accuracy and completeness of those reports.

“If we feel there are some issues there we will conduct audits to make sure that reports have been completed properly.”

Those audits, he said, are done on the resources that are available at the grain commission for that purpose. Priority is put on audits of licensees about which the grain commission has received complaints from producers about slow payments, and/or where previous audits “have indicated problems.”

When the CGC suspended W.A. Grain’s license, it didn’t have enough security to cover what farmers were owed.

“I’d like to remind producers to cash their cheques upon receipt and if you don’t you’re lending your money to your grain company,” Gosselin said. “The best protection against the risk of failure is cashing cheques promptly.

“Over the last 30 years our payout record is 94 per cent of eligible claims.”

— Allan Dawson is a reporter for the Manitoba Co-operator at Miami, Man.

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Saskatchewan Court of Queen’s Bench on Thursday appointed Calgary-based insolvency trustee Hardie and Kelly as the receiver for Milligan Biofuels, which operates at Foam Lake, about 90 km northwest of Yorkton.

Alberta’s Crown lending agency ATB Financial had filed an application without notice Wednesday in Saskatoon to seek the hearing the following day.

Such applications, as a rule, are heard at least 14 days from the filing date, but lawyers for ATB, in their filing, described the appointment of a receiver as “a time-sensitive matter.”

ATB’s filing calls in Milligan’s debt of $490,331, mainly from a non-revolving reducing loan.

Milligan, ATB said, had granted the lender security over “the entirety of its assets,” largely in the form of a $6 million mortgage and general security agreement reached in 2011.

An affidavit filed Wednesday by Trina Holland, representing ATB’s turnaround and restructuring group, described Milligan as having “experienced financial difficulty over the past several months.”

Given “the circumstances and the nature of Milligan’s assets, it seems imprudent for ATB to await the passage of 14 days,” Holland wrote, describing receivership as the “only practicable remedy to preserve (Milligan’s) assets,” which include its equipment, machinery, land and buildings.

Milligan, which incorporated as Milligan Bio-Tech in 1996, worked with federal and university researchers to develop a “cold-crushing” system for biodiesel extraction from the oil of low-quality canola.

By 2009, the company had built and opened a biodiesel plant — the first such commercial-scale facility in Western Canada — with capacity to produce 10 million litres of fuel per year from up to 30,000 tonnes of canola.

A plant expansion in 2011 boosted Milligan’s production capacity to 20 million litres per year, requiring over 60,000 tonnes of distressed canola, sourced from across the Prairies and the northern U.S.

The company, which became Milligan Biofuels in 2012, also offered canola meal and canola-based derivatives such as diesel fuel conditioner, penetrating oil, rust inhibitor, road dust suppressant and “asphalt release agents,” used to clean asphalt-handling equipment. — AGCanada.com Network

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