AgraCity: a surplus at NewAgco and loans the monitor could not validate

In the affidavit Jason Mann swore in November 2025 as a director and the president of each of the applicants, AgraCity Crop & Nutrition Ltd. is "the main funding and revenue generating entity" and NewAgco Inc. the development arm, holder of about 146 product registrations under the Pest Control Products Act, each with the number that lets the registrant sell and market a product in Canada. "There are also significant intercorporate advances between the Applicants which arose due to their integrated nature," the affidavit says, per the Affidavit of Jason Mann, Nov. 25, 2025, paras. 2–3, 8(a), 36, 40–41.

The Ninth Report of Ernst & Young Inc., the monitor, dated October 9, 2026, puts figures on that description. Of the $48.218 million purchase price for the business that United Farmers of Alberta Co-operative Limited (UFA) bought, it proposes to attribute $28.0 million to product registrations, $26.5 million of it to NewAgco's. Under a company-by-company waterfall that settles the intercompany loans, the monitor expects the claims against NewAgco and Viking Crop Production Partners Inc. to be paid in full, with about $649,000 left over for their shareholders, and AgraCity's proven creditors to receive nothing except the Canada Revenue Agency, which is expected to get about $97,000 of its $540,268 deemed trust claim. The monitor could not validate the loans that waterfall turns on, and it "has reservations" about recommending that result, per the Ninth Report of the Monitor, Oct. 9, 2026, paras. 25, 46(a), 47, 51, Table 1.0.

The sale to UFA closed on March 31, as reported here on July 30, and on July 29 Justice G.A. Meschishnick extended the stay to October 30, 2026, per the Ninth Report of the Monitor, Oct. 9, 2026, paras. 7, 10 and the Order (Stay Extension, Interim Distribution, and Approvals), July 29, 2026, para. 2. The monitor had told the court the extension would let it develop, with the companies, "an allocation of the Net Sale Proceeds amongst the CCAA Entities to inform anticipated distributions to Creditors with proven Claims," per the Eighth Report of the Monitor, July 24, 2026, para. 61(c). The Ninth Report sets out that allocation and three ways the proceeds could be paid out, per the Ninth Report of the Monitor, Oct. 9, 2026, para. 11.

Twenty-eight million dollars of registrations

The monitor developed the allocation in consultation with the companies and Ernst & Young LLP's Transactions and Corporate Finance practice, from the purchase agreement's price allocation, the auction bids, book values, appraisals and its own valuation analysis. It allocates $13.0 million to the Genesis Entities, whose Belle Plaine Supercentre is a fertilizer distribution centre, most of it the $12.935 million the purchase agreement allocated to their assets; $6.555 million to AgraCity, mostly for the assigned contracts and residual assets; and $662,000 to MPower Logistics Ltd. The registrations are divided between NewAgco ($26.5 million) and Viking ($1.5 million) on the highest bid attributable solely to Viking, with reference to the proportional book value of each company's intangible assets at September 30, 2025, per the Ninth Report of the Monitor, Oct. 9, 2026, paras. 23, 25, 26(a)–(c), 37, Table 1.0.

One adjustment comes off the top. The sale agreement contemplated UFA assuming $20.0 million in liabilities under the Reconciliation Protocol, the claims of the farmers the monitor calls the Farmer Reconciliation Parties; the liabilities UFA actually assumed at closing totalled approximately $17.8 million. Table 1.0 takes $2.227 million off NewAgco's share for the difference, bringing NewAgco to $24.273 million and the whole to $45.991 million. Because the price was satisfied through cash, assumed liabilities and repayment of the interim financing, the report cautions, the allocation "does not represent an accounting of the actual cash available to satisfy proven claims," per the Ninth Report of the Monitor, Oct. 9, 2026, paras. 24, 26(f), Table 1.0 and the Sixth Report of the Monitor, Apr. 17, 2026, para. 39(a).

Thousands of transactions, back to 2016

If the allocation is approved, the monitor writes, the next step requires "a consideration of the voluminous intercompany transactions that occurred between the CCAA Entities on a regular basis." On the books, the other companies owed AgraCity approximately $30.7 million at September 30, 2025, recorded as non-interest-bearing loans payable on demand; the monitor understands them to be mostly money AgraCity transferred to fund the others' operations, with intercompany charges allocating shared costs. They are unsecured except for $4,972,201 owed by the Genesis Entities, secured by a collateral mortgage on the Belle Plaine Supercentre that the monitor's counsel concluded, subject to customary assumptions and qualifications, is valid and enforceable, per the Ninth Report of the Monitor, Oct. 9, 2026, paras. 27, 33–35, 37–38, Table 2.0.

NewAgco's loan is mainly amounts it owes AgraCity relating to its acquisition of the registrations in March 2016 from NewAgco Barbados, which is not an applicant, and AgraCity's funding of their development, offset by royalties NewAgco charged AgraCity for using them. The monitor understands NewAgco has engaged independent third parties to assess the royalty rate and confirm that it reflected market rates; it has yet to consider the resulting analysis and "is unable to express an opinion on that issue," per the Ninth Report of the Monitor, Oct. 9, 2026, para. 36.

The monitor reviewed trial balances, general ledgers and journal entries back to 2016 and found balances "comprised of thousands of intercompany transactions," among them internal allocations of shared costs, AgraCity's payments to third parties on the others' behalf, and assignments of debt. Various reclassifications, including entries related to shareholder balances, "require further validation as they may materially affect the amounts available for distribution to creditors," it writes. In the end, it concludes, "the age, volume, complexity, and commingled nature of the underlying transactions made it impractical and cost prohibitive for the Monitor to be able to definitively validate the RPT Loan balances themselves," and it "expresses no opinion on the accuracy or completeness" of them, per the Ninth Report of the Monitor, Oct. 9, 2026, paras. 29, 32.

The monitor also met separately with management and with James Mann, per the first affidavit a director of AgraCity. It sent James Mann written questions on August 26. On September 18 James Mann provided preliminary responses and asked for access to the companies' books and records to complete them, and at the date of the report the monitor was attempting to facilitate that access, per the Ninth Report of the Monitor, Oct. 9, 2026, paras. 30–31 and the Affidavit of Jason Mann, Nov. 25, 2025, paras. 3, 171.

What a company-by-company payout leaves

The Allocation Waterfall, developed in consultation with the companies, their advisers and the monitor's advisers, the report says, takes each share through the loans, the liabilities UFA assumed and the money already spent. The balance of the loans between NewAgco and AgraCity, the monitor notes, "materially affects the funds available for distribution to AgraCity's creditors": the $10.8 million NewAgco owes AgraCity on the books is settled out of NewAgco's share, and AgraCity's grows by $14.836 million of loan repayments in all. The waterfall then charges the $17.773 million of Reconciliation Protocol liabilities against AgraCity, and AgraCity's net use of the interim financing and sale proceeds takes all of its $3.992 million of allocated cash consideration; that line, across the companies, includes the $7,747,683 distribution to the Business Development Bank of Canada. AgraCity's shortfall in repaying its portion of the interim financing, $2.863 million in the table, is reallocated to NewAgco, under a note explaining that the other companies' assets collectively secured that financing under the interim lender's charge. AgraCity's forecast net sale proceeds are nil. Of $8.721 million forecast for all the companies, $7.362 million is NewAgco's, per the Ninth Report of the Monitor, Oct. 9, 2026, paras. 40–41, Table 3.0.