BC Tree Fruits Cooperative has sought protection from creditors under the Companies’ Creditors Arrangement Act (CCAA), with a court-appointed monitor overseeing next steps for the troubled fruit marketer.
The application to BC Supreme Court on August 12 came as the co-op struggles with cash flow issues and low estimates from growers of apple deliveries this season.
Court documents indicate that the co-op had defaulted on $51.7 million in debt to its lender, CIBC, in addition to having $43 million worth of liabilities on its balance sheet. Together, the amounts outstripped the co-op’s $92.4 million in assets.
Court documents indicate that the co-op had $55.7 million in revenue in 2023, down from $67.5 million in 2021. Grower estimates of deliveries from the 2024 harvest indicated a 50% drop in apple volumes this season, indicating even lower revenues to come.
“With rising carrying and debt costs from delayed property sales and significantly reduced fruit volumes, BCTFC is no longer able to meet its overhead requirements, pay its growers or other creditors,” the co-op’s said in requesting creditor protection.
Both court documents and a public statement regarding the move to seek creditor protection flagged “grower discord,” particularly regarding the co-op’s restructuring efforts, as a key factor.
Court documents indicate that BCTF has approximately 290 grower families, with 176 voting members.
The co-op had 193 staff on July 25, the day it decided to shut down operations. Most have been laid off, with 21 staff now involved in the decommissioning of its facilities.
As monitor, Alvarez & Marsal Canada Inc. will oversee the affairs of the co-op while under creditor protection.
During a press conference in Penticton on August 13, Premier David Eby said the province would be closely watching the court-ordered process with an eye to stepping in to protect infrastructure critical to the industry’s survival.
However, he stopped short of committing provincial funds to buy assets on behalf of the industry. Instead, the province announced $5 million for a Tree Fruit Climate Resiliency program to help orchardists buy equipment and pursue projects that were not eligible under previous programs.
The province also raised the AgriStability compensation rate to 90% and doubled the compensation cap for all farmers for the 2024 program year, a move expected to provide $15 million in relief to farmers across the province.
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