EBF Group: the lenders settle, and the Monitor seeks the directors' powers

On September 15, eleven days after two of them issued notices disputing the Monitor's findings, the three secured lenders of The EBF Group Ltd. reached a Global Settlement Agreement, per the Fourth Report of the Monitor, Oct. 26, 2026, paras. 12(f), 84. MNP Ltd., as Monitor, now asks the Commercial List to give it effect. Its motion, returnable October 30, seeks approval of the validity and priority of the lenders' entitlement claims "pursuant to the terms of the Global Settlement Agreement", interim distributions to all three net of reserves, and a second amended and restated initial order that would extend the stay to March 31, 2027 and give the Monitor enhanced powers, "should it wish to exercise them", among them the ability to "exercise any power or authority that may otherwise be exercised by the directors or officers" of EBF, per the Fresh as Amended Notice of Motion, Oct. 26, 2026, paras. 1–2, 38.

Once $1,264,000 of general reserves is held back, the distributions would be $250,000 to 1968328 Ontario Inc. (196 Ontario) from the JNR Farms enforcement proceeds, $750,000 to Fred Hageman's Holdings Limited (FHHL) on its Summit claim, a further $220,000 to FHHL from the JNR realizations, and approximately $2.6 million to the third lender, an individual, from the balance of EBF's property. The Revised Forecast carries them as one line of $3,808,500, assumed paid in the week ending November 8, subject to court approval. No further distribution is contemplated to 196 Ontario, "based on estimated recoveries," the Monitor says, per the Fourth Report, paras. 75–76, 92, 95, 101.

When the case was reported here on September 5, the individual lender and 196 Ontario had just disputed the Monitor's conclusions on FHHL's trust claim to recoveries on EBF's advances to JNR Farms Transport Ltd., and a full-day hearing was set for November 13. Neither FHHL nor the fourth claimant, a trust the Monitor found held security but likely no secured debt, delivered a notice, and both were deemed to have accepted the Monitor's conclusions, per the Fourth Report, paras. 80, 83–84.

What three lenders agreed among themselves

EBF, a Burlington non-bank lender to small and medium-sized businesses, is financed primarily by three secured facilities of approximately $21.8 million in the aggregate: about $13 million from FHHL, about $5.8 million from the individual lender and about $3.0 million from 196 Ontario, per the Fourth Report, paras. 18, 21. The settlement is among those three. Neither EBF nor the trust was a party, and MNP signed it only as an acknowledgment, in its capacity as Monitor, per the Fourth Report, para. 84 and the Global Settlement Agreement, Sept. 15, 2026, p. 4 (Fourth Report, App. "H").

Its terms begin with the $2,300,000 loan facility EBF made to JNR Farms, in which FHHL participated. The first $250,000 collected on that loan goes to 196 Ontario ahead of the other two, "from the gross proceeds of realization of the JNR Loan collateral in priority to and without deduction for any costs, expenses, allocations or reserves." The balance, after those deductions, goes to FHHL "up to the amount owing to FHHL under the Participation Agreement." All three consent to the allocation methodology in the Monitor's Realization Analysis of September 4, 2026, per the Global Settlement Agreement, recital F, paras. 1–3.

On the grant of a consent entitlement order, the two notices of dispute are deemed withdrawn, "including any claim in respect of the $100,000 paid to FHHL and the $99,999 paid to [the individual lender] in January 2026," payments the agreement recites that 196 Ontario had raised. With that order, the lenders exchange releases "confined to the JNR dispute, the January 2026 payments, and the PacWest Litigation," each bearing its own costs of the process. "Nothing in this proposal affects any party's rights against [EBF's director] or under any guarantee," per the Global Settlement Agreement, recital G, paras. 4, 8.

Under paragraph 7, the Monitor is to seek a revised initial order with revised and streamlined decision-making, operational and consultation requirements, and other terms "satisfactory to [the individual lender], to reflect that [the individual lender] has the sole economic interest in the Property (subject to paragraph 5 herein)," per the Global Settlement Agreement, para. 7. The Fourth Report's summary of that term speaks of "the principal residual economic interest, subject to the other Secured Creditors' entitlements," per the Fourth Report, para. 85(g).

The Monitor calls the agreement "materially beneficial to the CCAA Proceedings": "It has eliminated uncertainty, provided for a more streamlined administration and will significantly reduce professional costs associated with resolving the Notices of Dispute and litigating the Entitlement Claims," per the Fourth Report, para. 87.

The draft entitlement, distribution and approvals order would declare the claims it lists "the complete list of Entitlement Claims held by the Secured Creditors on a final basis." For the first $750,000 of Summit proceeds and for the Rumble assets it keeps the priorities the Third Report and its Supplement reached, and the JNR proceeds now open with 196 Ontario's $250,000. Against the balance of EBF's property, where those reports had ranked the individual lender, 196 Ontario and FHHL in that order, the draft lists one claim, the individual lender's, per the Draft Entitlement, Distribution and Approvals Order, paras. 3–4 (Motion Record, Tab 5) and the Fourth Report, para. 82. The distributions would bind any trustee in bankruptcy or receiver later appointed, per the Draft Entitlement, Distribution and Approvals Order, para. 16.

What the JNR collateral has brought in

Since the Second Report, EBF has closed the sale of 187 Second Avenue East in Rosenort, Manitoba, on September 1, for net proceeds of $609,112.12, and of industrial lots there on August 26, for $124,527.01 net, after its counsel cleared title with discharges from other judgment creditors. A trailer brought approximately $12,950, and five pieces of equipment sold at a Ritchie Bros. auction approximately $117,000 after commissions and costs; eight tractor and trailer units are subject to a proposed sale agreement with Red River Truck and Trailer of Morris, Manitoba. EBF also agreed to discharge its second-ranking $350,000 mortgage over a residence and farmland at Rosenort, held as part of the JNR collateral, for $350,000 plus $20,000 in cost recovery, and received $370,000 net on September 16, per the Fourth Report, paras. 48, 50–54.

Of the reserves, $158,000 is held against the recoveries distributable to FHHL and $1,106,000 against the individual lender's, "which is needed for the wind-down, Firefly operations, overhead and process costs," per the Fourth Report, para. 97. The draft order would let the Monitor, in its discretion, distribute from either reserve as it determines the reserve can be reduced, per the Draft Entitlement, Distribution and Approvals Order, paras. 8–9, 11–12.

The loan EBF is still making

Summit Earthworks Inc. repaid its facility in full on June 29 and Lions Concrete Cutting and Coring refinanced on July 20, which leaves Firefly Books Ltd. as the performing loan EBF still funds; EBF's exposure to it stood at approximately $2.1 million on October 18. Firefly signed a term sheet on June 3 for a $4.0 million facility, later changed from factoring to an asset-based loan. After a field exam and "lengthy due diligence," Firefly reported to the Monitor that the facility was insufficient to repay EBF's loan in full, owing to "a shortfall of approximately $150,000 between the amount outstanding to EBF and the proposed borrowing base." Firefly was finalizing due diligence with a new lender when the Monitor reported on October 26, per the Fourth Report, paras. 61–66.