Canada Tire: settling for the tires still at sea

Between July 8 and July 19, 2026, twenty-one containers of winter tires were loaded onto vessels in China. The shipper was Maxtrek Tyre Limited, a Chinese manufacturer; the consignee was Canada Tire; the notified parties were FGI Worldwide LLC, Canada Tire's senior secured lender, and Kuehne+Nagel Ltd.; and the invoices came to US$755,014.16, per the Application for the Homologation of a Transaction and to Amend the Re-Amended and Restated Initial Order, Aug. 27, 2026, paras. 7, 14. On July 20, while those containers were on the water, Canada Tire obtained its initial order under the CCAA. Maxtrek, the company says, was not told of the proceedings before the initial order or the amended order that followed on July 29, and being in China, was not served, per the same application, para. 16.

Whose tires those were, and who gets paid for them, is the question that has occupied the file since the end of July. It has not been answered. On September 1 Justice Castonguay approved an arrangement that lets the tires be sold now and leaves the question for later, the second such arrangement in a fortnight.

When this file was last reported here, on July 31, the problem was Unicorn Tire Corporation, a Memphis supplier holding back a telex release on containers already in Canada, and the Court had just declared Unicorn a critical supplier under s. 11.4 of the CCAA and ordered it to keep shipping; the order did not end the dispute.

Unicorn, Clasquin, and the settlement of August 19

On July 31 the company went back to court against its freight forwarder. Its motion alleged that Unicorn had refused the telex release for six containers valued at approximately US$167,921.90, had told Clasquin Canada Inc., the Dorval forwarder that handles Canada Tire's shipments from China, to hold every Unicorn container on the water, and had instructed it to change the consignee on eight more containers bound for Halifax to a third party, per the Motion for an Order Compelling Clasquin Canada Inc. to Release Goods, July 31, 2026, paras. 3, 9, 27. Clasquin, the motion says, told the company on July 28 that without the telex it was obliged to follow Unicorn's instructions (para. 29). Those containers held about 7,774 tires for the Maritime warehouses in Dartmouth, Moncton and Mount Pearl (para. 28).

The company's argument ran on shipping terms and on an agreement Clasquin had signed with the lender. The invoices were FOB Qingdao, so title and risk passed to Canada Tire at loading, and the goods were its property under the initial order, per the Clasquin motion, July 31, 2026, paras. 17–18, 33. Under a customs broker and freight forwarder agreement of December 15, 2025 among Canada Tire, FGI and Clasquin, Clasquin had acknowledged FGI's security and agreed that if any seller gave notice to stop or divert goods, it would "only follow the instructions of Agent", meaning FGI, per the Clasquin motion, July 31, 2026, paras. 12, 40–41. The motion sets out the company's account; Unicorn's and Clasquin's positions are not stated in it, and none of its allegations has been tested.

On August 19, in a file captioned with Clasquin as defendant and Unicorn as mise-en-cause, the Court homologated a settlement concluded among Canada Tire, Unicorn, Clasquin and FGI, set out in a Settlement Term Sheet that is under seal, per the Order for the Homologation of a Transaction, Aug. 19, 2026, paras. 10, 15. Homologation is the Québec court's approval of a transaction, the settlement contract of article 2631 of the Civil Code — the provision the company would invoke again for Maxtrek.

The re-amended order issued the same day shows what the settlement changed on the face of the file. Schedule A, which on July 29 named Unicorn as the one critical supplier compelled to keep supplying, per the Amended and Restated Initial Order, July 29, 2026, Schedule "A", now reads "N/A"; Unicorn appears instead first on Schedule B's list of seven essential suppliers, per the Re-Amended and Restated Initial Order, Aug. 19, 2026, Schedules "A" and "B". The supplier charge was also redrawn. On July 29 it attached to goods to be supplied and received after the date of the order; on August 19 it attached to goods shipped and received after the Effective Time of 12:01 a.m. on July 20, and a new paragraph gave Unicorn the benefit of the Essential Supplier Charge over the goods that were already in transit at that moment, called the Transit Goods, per the same order, paras. 60–62 and Amended and Restated Initial Order, July 29, 2026, paras. 60–61.

The benefit is conditional: paragraph 65 grants the charge over the Transit Goods "under reserve of the right" of FGI to seek a ruling that the supplier's claim for them is an ordinary pre-filing claim. Within five days of the goods moving from the company's quarantined Reserve Inventory to its saleable stock, or of a sale closing, the amount owed for them is paid to the Monitor to hold in trust in an interest-bearing account, and the order states that nothing in it decides whether the charge applies, per the Re-Amended and Restated Initial Order, Aug. 19, 2026, paras. 65–66.

Maxtrek, and the lender who did not sign

Maxtrek was on the July 29 list of essential suppliers, but, in the company's words, it "was excluded from the settlement provisions of the RARIO and reserved all of its rights." At the August 19 hearing the company told the Court that a similar agreement had been negotiated with Maxtrek and was awaiting final approval by all parties, per the Maxtrek homologation application, Aug. 27, 2026, paras. 10, 12, 23.

The objection, as the company's application of August 27 describes it, is FGI's. In the weeks after the July 29 order, FGI took the position with Maxtrek and the Monitor that the twenty-one containers loaded before the filing, which the application calls the Litigious Assets, are not essential supplier goods covered by the Essential Supplier Charge and are not protected by the order's continuation-of-supply paragraphs either. Canada Tire "has supported FGI's position as required by the terms of the DIP Loan Agreement, without taking any substantive position of its own on the merits", Maxtrek disagrees, and the Monitor's position "remains undetermined, pending further legal analysis", per the same application, paras. 18–20. FGI is both the secured lender over inventory and receivables and the interim lender in the proceedings (para. 4).