De Cloet Greenhouse: three stalking horses, none for Simcoe

The auction was set for 10:00 a.m. Eastern Time on October 6, 2026. On October 5 the debtors' U.S. counsel filed a notice in the Delaware bankruptcy court calling it off. Three stalking horse bidders had been designated for "certain of their Assets" (Griffin Greenhouse Supplies, Inc., GMS Supply LLC and American Plant Products & Services, Inc.), no other qualified bid had arrived by the October 2 deadline, and the debtors, after consulting the Consultation Parties, made the stalking horses the successful bidders for their respective assets, per the Notice of Cancellation of Auction and Successful Bidders, Oct. 5, 2026, pp. 1–2 (Ex. "G" to the Fourth Zalev Affidavit) and the First Report of the Information Officer, Sept. 16, 2026, s. 3.3, para. 2. None of the three was for De Cloet Greenhouse Mfg. Ltd., the Simcoe, Ontario maker of made-to-order commercial greenhouse structures whose recognition proceeding sits before Justice Dunphy in Toronto. AlixPartners Restructuring, Inc., the information officer, describes all three as bids "in respect of non-Canadian assets or business segments," per the Second Report of the Information Officer, Oct. 13, 2026, s. 2.2, para. 2, p. 8 and s. 3.1, paras. 3–4, p. 10.

The notice's next paragraph turns to De Cloet. Before the deadline, it says, the debtors "received certain bids for (i) certain De Cloet Greenhouse Mfg. Ltd Assets and (ii) Assets associated with the Michael Carr Designs business segment (together, the 'Residual Assets')," and decided, in their discretion and in consultation with the Consultation Parties, "not to qualify these bids at this time." They reserved the right to keep negotiating with those bidders, to qualify bids for the Residual Assets later and to hold an auction for them, on at least seven calendar days' notice on the docket, per the Notice of Cancellation, Oct. 5, 2026, p. 2.

When the case was reported here on September 12, the foreign representative was due back before Justice Dunphy on September 18 to have the bidding procedures that set the October 6 date recognized in Canada. Since then, the official committee of unsecured creditors in Delaware has objected to the final DIP order, the parties have deferred the issues it raised, and the U.S. court has entered a second interim order on consent that raised availability under the facility from US$22 million to US$55 million, per the Second Report, Oct. 13, 2026, s. 1.0, paras. 7–8, 10, pp. 2–4 and s. 4.1, para. 2(a), p. 12.

Offers, interest, and no qualified bid

The Bidding Procedures Order, entered in Delaware on September 14, allowed De Cloet's business to be bid on separately from the rest of the debtors' assets. Justice Dunphy recognized it on September 18 with ten other U.S. orders, among them the order approving the retention of Reflect Advisors, LLC and designating Adam Zalev as chief restructuring officer, and gave Reflect and Zalev protections in Canada, including that neither is, or is deemed to be, a director of De Cloet, per the Second Recognition Order, Sept. 18, 2026, paras. 3–7 and the Second Report, Oct. 13, 2026, s. 1.0, para. 8, pp. 2–3 and s. 3.1, para. 1, p. 9. "In cases such as these, having already determined that another court is the appropriate forum to take carriage of this bankruptcy proceeding, our role is intentionally secondary," the judge wrote, and there had been no objections to their recognition, per the Endorsement of Justice Dunphy, Sept. 18, 2026, paras. 1–2.

The information officer had told the court two days earlier that the deadlines, "while relatively short, provide sufficient time for potential bidders to perform diligence and prepare and submit their bids," and had set out the alternative: if a going-concern outcome for the Canadian business was not achieved, the liquidation program authorized by the final liquidation procedures order, "which has been deferred in respect of De Cloet pending the outcome of the marketing process," per the First Report, Sept. 16, 2026, s. 3.3, paras. 8–9.

Zalev's affidavit sworn October 8 says the debtors "received offers in respect of other segments of the business, including the Canadian Debtor's business," but "were unable to come to terms with any of those interested parties with respect to a stalking horse bid," and that while no qualified bid came for De Cloet's business or property, the debtors "did receive certain indications of interest" and are continuing to work with the interested parties, per the Fourth Zalev Affidavit, Oct. 8, 2026, paras. 24–26. The information officer's version is that "no Qualified Bids were received in respect of De Cloet's assets or business," that the debtors "received multiple expressions of interest in respect thereof," and that it will report again "should a sale agreement involving De Cloet be executed," per the Second Report, Oct. 13, 2026, s. 3.1, para. 5, p. 10. The foreign representative's factum adds that none of the transactions going before the U.S. court for approval on October 14 "involve the Canadian Debtor," per the Factum of the Foreign Representative, Oct. 13, 2026, paras. 11–13.

Zalev's affidavit also sets out the other branch: "If no going concern transaction is capable of being negotiated, the Debtors will begin an orderly wind down of the business and liquidation of the Canadian Debtor's assets at a date to be determined," per the Fourth Zalev Affidavit, Oct. 8, 2026, para. 39. In the meantime, although the debtors obtained authorization to begin winding down their business, De Cloet has kept operating, "including entering into new agreements for the design and manufacture of greenhouses," Zalev swears, per the Fourth Zalev Affidavit, Oct. 8, 2026, para. 22. The information officer has not been advised of any termination of the approximately 30 Canadian employees or of any material disruption to De Cloet's operations, supply arrangements or customer relationships, and understands that no liquidations have been commenced in Canada. Of the two De Cloet contracts on a September 16 cure notice, one counterparty filed a limited objection, which had not been resolved when the report was written, per the Second Report, Oct. 13, 2026, s. 2.2, paras. 3, 8, pp. 8–9 and s. 3.2, paras. 2, 5, pp. 10–11.

The committee, and a bigger interim DIP

The final DIP order was to have been heard with the other final orders on September 16. Instead the debtors' motion for it was adjourned to September 29 to give them time to address comments from the committee and the U.S. Trustee. On September 22 the committee, appointed by the U.S. Trustee on September 1 and, in the information officer's words, "an estate fiduciary owing duties to all unsecured creditors of the Debtors, including those of De Cloet," filed its objection, per the Second Report, Oct. 13, 2026, s. 1.0, paras. 5–6, 9–10, pp. 2, 4.

"The DIP Facility rolls up all $43 million under the existing ABL facility and provides, at most, $12 million in new money," the objection says, and it argues that the facility "provides no commitment for a wind down budget to ensure that administrative and priority claims will be satisfied." It also says the committee "supports the sale process and does not object to the DIP Facility in its entirety," per the Committee Objection, Sept. 22, 2026 (public form), paras. 4, 7, 25 (Ex. "C" to the Fourth Zalev Affidavit). Zalev summarizes it as raising, among other concerns, that the protections for the secured lenders are inappropriate and that the DIP fees are out of market, and swears that the debtors disagree, per the Fourth Zalev Affidavit, Oct. 8, 2026, para. 34. Their reply, filed on October 9, takes the position that the objections are "either misplaced or otherwise arise from a misreading of the Final DIP Order," per the Factum, Oct. 13, 2026, paras. 18–19.