Demers: a reverse vesting order to keep the work permits

Five related companies operating out of 1196 rue Yvon-Beaudoin in Lévis filed notices of intention in January 2026 — Les Productions Horticoles Demers Inc. and Les Serres Demers Inc. on January 8, and Les Serres Olivier Inc., 9718656 Canada Inc. and Immeubles PHD s.e.c. on January 12. PricewaterhouseCoopers Inc. acted as trustee, per Fifth Report of the Trustee, May 28, 2026, para. 2.

Five months later the greenhouses went to Savoura and the berry fields stayed with the family. The reasons the second transaction took a different legal form are the most instructive part of the record.

The filings in this matter are in French; translations are ours.

Three lots, seventy-two approaches

The court approved a sale and investment solicitation process on January 13, 2026, together with a key employee retention plan, interim financing, priority charges and the administrative consolidation of the five proceedings, per SISP Order, January 13, 2026.

The assets were divided into three lots: Lot 1, the greenhouse operations at Lévis; Lot 2, the greenhouse operations at Drummondville; and Lot 3, field production of small fruits on chemin Vire-Crêpes in Lévis, per Fifth Report, May 28, 2026, para. 17.

The process, run by PwC Corporate Finance under the trustee's supervision, funnels down cleanly and is worth setting out because it is the evidentiary foundation for everything that follows:

• Solicitation documents to 72 potentially interested parties from January 13
• 16 signed non-disclosure agreements and received the data room and confidential information memorandum
• 7 non-binding offers by February 17
• 6 qualified purchasers selected for Phase 2 on February 20
• Due diligence and negotiation from February 23 to April 23
• 4 binding offers by April 23
• 1 final offer selected and approved by the secured creditors on April 27

Per Fifth Report, May 28, 2026, para. 15.

The secured creditors are a recognisable Quebec agricultural syndicate: Fédération des Caisses Desjardins and Financement agricole Canada ranking first over all assets other than those of the limited partnership; Investissement Québec, Desjardins Capital, Capital financière agricole Inc. and the Fonds de solidarité FTQ holding pari passu second-ranking security over the same; and Investissement Québec alone secured against the partnership, per Fifth Report, May 28, 2026, para. 16.

Why there are two transactions instead of one

The winning bid came from the Savoura group and originally covered all three lots.

Savoura then asked to amend it and drop Lot 3, for a straightforward commercial reason: it does not operate in small-fruit cultivation. It grows in greenhouses. A berry field on a different site is not its business, per Fifth Report, May 28, 2026, paras. 19–20, 27.

Gestion PHD Inc. — a company controlled by members of the debtors' founding family — had submitted an offer covering only Lot 3. So the parties agreed Lot 3 would go to GPHD, and a corresponding adjustment was made to the Savoura price, per Fifth Report, May 28, 2026, para. 28.

Les Serres Savoura Lévis Inc. and Les Serres Savoura Drummondville Inc. acquired substantially all of the debtors' assets relating to Lots 1 and 2 — the greenhouse buildings and properties, movables and rolling stock, assigned contracts and intellectual property rights, receivables, inventory and prepaid expenses, and transferable administrative authorisations — free and clear, on an as-is-where-is basis, for cash. Excluded were Lot 3 and its equipment, cash and cash equivalents, and certain receivables including amounts due under the Agri programs, per Fifth Report, May 28, 2026, paras. 30–32.

Unionised employees on Lots 1 and 2 were to be offered employment with their conditions remaining governed by the collective agreement in force; non-unionised employees receiving offers were to get essentially similar conditions, per Fifth Report, May 28, 2026, para. 34.

That transaction is an ordinary approval and vesting order, granted June 2, per Approval and Vesting Order (Savoura Transaction), June 2, 2026.

The other one runs backwards

For Lot 3, GPHD did not buy assets. It bought all the shares of PHD, through a reverse vesting order that leaves the Lot 3 assets inside the company rather than moving them out, per Fifth Report, May 28, 2026, para. 25(b).

The unwanted material goes the other way. Two new entities, Nouco 1 and Nouco 2, were incorporated as subsidiaries of PHD, and certain assets and liabilities were transferred into them.

What went to Nouco 1 for later realisation: all rights, titles, interests, claims and recourses in any litigation or dispute, current or contingent; the receivables; prepaid amounts; and the equity interests in PHD's other subsidiaries. The excluded liabilities include the unsecured claims compromised by the January notices of intention, per Fifth Report, May 28, 2026, paras. 38–40.

Nouco 1 and Nouco 2 were then added to the insolvency proceedings and, under the terms of the order, are deemed to have made an assignment of their property upon the trustee issuing its certificate confirming closing. Nouco 1's assets are to be liquidated in an orderly way with the net realisation going to the secured creditors, per Fifth Report, May 28, 2026, paras. 46–47.

That is the reverse vesting structure in miniature: the buyer takes the corporate shell with its permits, contracts, tax history and workforce intact, and the debts and claims are lifted out into companies that go bankrupt on a certificate.

The two reasons, and why they are unusually concrete

Courts approving reverse vesting orders ask why an ordinary asset sale would not do. The answers here are specific enough to be worth quoting.