FUM: six adjournments, then a plan with no vote against

RDFN FUM Natural Products Ltd. sells flavoured air devices, without nicotine, smoke, vapour or electronics, "frequently used as a behavioral aid for individuals seeking to cease their smoking or vaping habits," its chief executive, Braeden Pauls, swears. In his account the company and its US subsidiary were strained by tariffs imposed in the United States, "significantly increased advertising costs, and a substantially increased debt burden after settling trademark litigation with BFL Metal Products Co., Ltd." Both filed notices of intention on February 4, 2026, and on March 2 the Court of King's Bench of Alberta granted them an initial order under the CCAA, with Alvarez & Marsal Canada Inc. as monitor, per the Seventh Affidavit of Braeden Pauls, Oct. 2, 2026, paras. 6–9.

The company's plan was to go to a vote on September 18. After six adjournments by notice, it carried on October 2 with no vote against in either class, per the Seventh Affidavit of Braeden Pauls, Oct. 2, 2026, para. 17 and the Sixth Report of the Monitor, Oct. 2, 2026, para. 30. On October 7 Justice C.D. Simard sanctioned it, per the Sanction Order, Oct. 7, 2026, para. 12. The plan's terms, and the settlement that made Clearco a secured creditor, were reported here on September 1.

Six adjournments, and the reasons given

By Mr. Pauls's count the meeting moved six times, by notices from the monitor: to September 23, September 25, September 28, September 30, October 1 and October 2, per the Seventh Affidavit of Braeden Pauls, Oct. 2, 2026, para. 17, Ex. "A". The minutes of the sittings on September 28, September 30 and October 1 record each one adjourned within ten minutes of being called to order, per the Sixth Report of the Monitor, Oct. 2, 2026, Apps. "A"–"C".

The monitor's Fifth Report and the chair at each short sitting gave the same reason in nearly the same words: the meeting was adjourned to allow FUM "to conclude settlement discussions with certain key stakeholders," per the Fifth Report of the Monitor, Sept. 23, 2026, para. 25 and the Sixth Report of the Monitor, Oct. 2, 2026, Apps. "A"–"C". The monitor's last three notices say the chair adjourned to allow FUM Canada "to address final creditor claim matters that will have material impact on the voting of the Plan." Mr. Pauls swore on October 2 that the adjournments gave FUM "the time and opportunity to resolve outstanding issues with its creditors and secure sufficient support for the Plan to be voted on and pass with the Required Majority," per the Seventh Affidavit of Braeden Pauls, Oct. 2, 2026, para. 18, Ex. "A". None of these passages names the stakeholders or says what the discussions produced.

Twenty-one minutes on October 2

The meeting that voted opened at 11:00 a.m. on October 2 with Orest Konowalchuk of A&M in the chair; he summarized the plan, and no one had questions. Both secured creditors voted for it, with claims of $1,515,411 in all: Wayflyer's $551,724 and Clearco's $963,688. In the unsecured class, 22 votes totalling $4,661,236 were counted for the plan and none against. Eighteen were convenience creditors, whom the plan deems to vote in favour: 12 with claims of $2,500 or less and six with larger claims who elected to take $2,500. The other four voted by proxy: BFL, for $3,148,240, through Sam Gabor of Gowling WLG (Canada) LLP; Best Creation Technology, for $978,005; ThoughtLeaders, LTD, for $226,885; and Simkins LLP, for $48,170. Each class approved by 100% in number and value of the claims voted, and the chair declared the plan approved and closed the meeting at 11:21, per the Sixth Report of the Monitor, Oct. 2, 2026, paras. 21(d), 28, 30, Apps. "D"–"E".

One more vote was recorded and set apart: that of an individual whose property claim, with no value ascribed, asserts an interest in FUM's intellectual property. The monitor had issued a notice of revision or disallowance against it, the claimant applied on September 8 to set that notice aside, and the vote, cast for the plan, is not counted for any purpose unless the claim is finally determined to be accepted. The monitor says it understands that FUM and the claimant have resolved the issues in the application and that the claimant has agreed to withdraw it without costs, per the Sixth Report of the Monitor, Oct. 2, 2026, paras. 22–24, 30 n. 3.

Sanctioned under section 6

On October 7 Justice Simard declared that FUM had complied with the CCAA and the court's orders and had acted in good faith and with due diligence, and that the plan was "fair, reasonable, not oppressive" and in the best interests of FUM and its stakeholders, and sanctioned it under s. 6. The order approves the plan's compromises and releases and makes them binding, as of the effective date, on FUM, its affected creditors and its directors and officers; it also approves the monitor's activities and the accounts of the monitor and its counsel, per the Sanction Order, Oct. 7, 2026, paras. 3–5, 9–13.

The order names the plan "dated August 19, 2026," attached as Schedule "A": $1,288,100 for the secured class, as a $1,100,000 cash fund and then seven monthly instalments, and for unsecured creditors outside the convenience class $30,000 a month for eleven months, to a maximum of $330,000, beginning 30 days after the last secured instalment, per the Sanction Order, Oct. 7, 2026, recitals; Sched. "A" (Plan), ss. 1.1(bbbb), (dddd)–(eeee), (nnnn)–(oooo), 7.2.

The releases in Article 10 run to FUM, its directors and officers, its advisors, and the monitor and its counsel, among others, and take effect on the plan's effective date, per the Sixth Report of the Monitor, Oct. 2, 2026, para. 35 and the Sanction Order, Oct. 7, 2026, para. 23. The monitor reported that, as of its Sixth Report, "no party has raised any concern regarding the proposed releases," per the Sixth Report of the Monitor, Oct. 2, 2026, para. 38(f).

Nevada, and November 30

Implementation is conditional on, among other things, recognition of the sanction order by the US Bankruptcy Court for the District of Nevada, the Chapter 15 court, and a plan implementation fund that FUM delivers to the monitor from its cash on hand, per the Sanction Order, Oct. 7, 2026, paras. 36, 50; Sched. "A" (Plan), s. 8.2(c)–(d). If the conditions are not met by November 30, 2026, or a later date FUM and the monitor agree, the plan terminates. The plan's first step on implementation is that FUM US files for bankruptcy under Chapter 7 of the US Bankruptcy Code, where claims against it are dealt with exclusively; its creditors had no vote. The plan states its purpose as winding up FUM US "in an orderly manner" so that FUM's business can "continue as a going concern," per the Sanction Order, Oct. 7, 2026, Sched. "A" (Plan), ss. 1.1(ppp), 2.1, 5.5, 8.2, and its Schedule A, step (a). An order Justice Simard made on October 1 runs the stay of proceedings to November 30, along with the stay of claims on guarantees given by the companies' directors, officers and employees, which covers guarantees three of them gave for a Business Development Bank of Canada loan, per the Stay Extension Order, Oct. 1, 2026, paras. 3–4 and the Seventh Affidavit of Braeden Pauls, Oct. 2, 2026, para. 12(a).

Once the conditions are satisfied or waived and the monitor files its certificate with the court, the CCAA proceeding ends for FUM and A&M is discharged as its monitor, per the Sanction Order, Oct. 7, 2026, paras. 20, 44.