Duchesne et Fils: the bidder bought the loans and took the plant in payment

On May 29, 2026, the Business Development Bank of Canada signed over its loan to Duchesne et Fils Ltée. The debt, about $29 million, was secured by, among other things, a first-ranking hypothec on the company's land and buildings in Yamachiche, and the assignee was 9479-6901 Québec inc., which seventeen days earlier had acquired everything Royal Bank of Canada was owed, RBC's asset-based operating loan and its share of the interim financing included (Fifth Report of the Monitor, June 3, 2026, paras. 22–26, 57). The trustee in bankruptcy describes 9479 as a company related to Groupe Zohar (Trustee's Preliminary Report, Sept. 22, 2026, para. 13), and a company related to 9479 had been bidding for the business since April 23. Now the only secured creditor, 9479 proposed to pay no cash at all and to take substantially all of Duchesne's assets, movable and immovable, "in place and in payment of the balance of the claims then owed to 9479" [translation]: a dation en paiement, the civil law's giving in payment (Fifth Report of the Monitor, June 3, 2026, paras. 40, 42.1).

Justice David R. Collier of the Superior Court of Québec approved it on June 5. Duchesne, the Mauricie building-materials maker whose run of short stay extensions was reported here on June 24, went bankrupt on September 1, and the trustee's report of September 22 puts the estate's only asset at about $290,000 in cash, reserved for employees' wage priority claims. "Subject to the foregoing, the Trustee expects that no amount will be available for distribution to creditors" [translation] (Trustee's Preliminary Report, Sept. 22, 2026, paras. 1, 23, 40).

A sale process that found no price

Duchesne was run as a family business until 2022, when an investor group bought it with financing mainly from BDC and RBC; sales reached records of $99.9 million that year and $95.7 million in 2023 (Pre-Filing Report, Jan. 14, 2026, para. 7). The company attributes the decline that followed to a sharp drop in housing starts, dumping from emerging markets, price pressure and, from early 2025, American tariffs. Both banks declared defaults in 2025, saw forbearance agreements end and served notices under s. 244 of the BIA. At filing on January 13, 2026, Duchesne owed RBC $5,750,234 on its revolving facility and BDC about $28.3 million under two credit agreements (Initial Application, Jan. 13, 2026, paras. 10, 25, 29, 32, 44, 49–52, 58, 60–66).

Ernst & Young Inc., appointed monitor on January 15, disclosed in its pre-filing report that BDC had retained it on December 16, 2025, with the company's consent, as financial consultant; that if appointed it would "immediately resign from its role as consultant to BDC" [translation]; and that it met s. 11.7(1) of the CCAA (Pre-Filing Report, Jan. 14, 2026, paras. 17–20). As trustee in September it restated that it had acted "as a consultant to BDC before the start of the CCAA proceedings" [translation] and said it knew of no potential conflict of interest arising from its appointment (Trustee's Preliminary Report, Sept. 22, 2026, paras. 35–36).

EY Parthenon, the monitor's affiliate, sent the sale process teaser to 285 potential bidders. Thirty-eight signed confidentiality agreements, and seven letters of intent arrived by February 27, all of them qualified for the second phase. The binding offers received at the extended April 2 deadline were judged unsatisfactory, and on April 15, after a round of improvements, every one was rejected as below estimated liquidation value and carrying conditions the interim lenders would not accept (Third Report of the Monitor, Apr. 23, 2026, paras. 40–51). The interim lenders had made no new advances since March 23, with $3.35 million of a $5 million facility drawn, and on April 16 the company laid off 80 people. "Consequently, unless the situation turns around, Duchesne's assets will have to be liquidated" [translation], the monitor wrote on April 23 (Third Report of the Monitor, Apr. 23, 2026, paras. 17–18, 53, 56).

The auctioneers and the late bidder

On April 10 the monitor had asked specialized auctioneers for liquidation offers. On April 14 it heard from a prospective going-concern buyer that had not taken part in the process, a company related to 9479 in the monitor's description, which wanted into the data room. It got in on April 17 and bid for all of the assets on April 23; its April 28 revision was still conditional on financing against a building it owned and on due diligence (Motion for an Order Authorizing Certain Transactions, June 2, 2026, paras. 21–29). RBC, meanwhile, gave notice on April 24 that it would seek a receiver over the movables, and on April 28 applied to have its information agent, FTI Consulting Canada Inc., appointed to liquidate them (Fourth Report of the Monitor, May 6, 2026, paras. 9–10).

On April 30 the monitor signed the auctioneers' offers, subject to court approval. 9431-0927 Québec inc. (Groupe Eldorado) and Le Groupe JSV inc. would buy the inventory and receivables, and Corporate Assets Inc. would sell the equipment as liquidation agent from the plant over five months, against a guaranteed minimum and a share of the proceeds. The offers were filed with a request that they be sealed, and no contract and no employee would go with the buyers (Approval and Vesting Motion, May 4, 2026, paras. 1, 18–25, 37). They left out the land and buildings, which would have gone to a broker as a non-operating site, and every remaining employee would have lost their job (Fourth Report of the Monitor, May 6, 2026, paras. 35.3–35.4).

By the time the approval motion was filed on May 4, the late bidder had dropped its financing condition; afterward it dropped due diligence too (Motion for an Order Authorizing Certain Transactions, June 2, 2026, paras. 31–32). On May 5 the monitor learned that the bidder would repay RBC in full and take its place as asset-based lender and interim lender, and that it would oppose the auctioneers' deal; BDC signalled that, on conditions, it might switch its support to the bidder. A fourth offer arrived the same day, with no diligence or financing condition, a $500,000 non-refundable deposit and closing by May 15. In the monitor's analysis both proposals would likely pay in full the court-ordered charges, RBC's advances and both banks' interim advances; only the bidder's would also sell the real property, partly repay BDC and continue the business. The monitor asked for directions allowing it to withdraw its approval motion in part (Fourth Report of the Monitor, May 6, 2026, paras. 26–36, 40).

On May 7 EY's senior vice-president on the file was cross-examined by counsel for the bidder, the auctioneers and BDC, a request by Corporate Assets to adjourn was refused, and Justice Collier ruled from the bench (Minutes, May 7, 2026, pp. 2–3). "The picture has changed" [translation] since May 1, he wrote, borrowing the monitor's phrase: the day before, Groupe Zohar had finalized the terms of a possible transaction with BDC, reportedly with the approval of the employees' union, and its offer, as the monitor's report explained, carried better financial terms and the chance of keeping operations and jobs at least in part. "Given how the file has evolved, it would be pointless, and contrary to the objectives of the Act, to force the Monitor to present the auctioneers' offer" [translation] (Minutes, May 7, 2026, paras. 8–12).