Goodfood: $43 million of debentures and no interim financing

In the fiscal year that ended August 31, 2021, Goodfood Market Corp. was delivering meal kits to close to 250,000 active subscribers on revenue of about $379 million. By June 6, 2026 the subscriber base was about 48,000, and the common shares, listed on the Toronto Stock Exchange as FOOD since June 7, 2017, closed at $0.03 on August 4, 2026, against $10.62 on August 6, 2021, per the Application for an Initial Order and an Amended and Restated Initial Order, Aug. 4, 2026, paras. 13, 77, 80–81.

August 4 was also the day Najib Maalouf swore that application, having been chief executive officer for one day. Selim Bassoul resigned the role effective August 3, 2026, and Mr. Maalouf, until then president and chief operating officer, was promoted into it. The application sets out what preceded that: both co-founders left their executive roles and then the board between August 2025 and February 2026; the chief financial officer stepped down on April 22, 2026; the vice-president of finance who took over the function resigned effective June 30, 2026, leaving it to the company's senior manager for strategic initiatives, per the Application, Aug. 4, 2026, paras. 19–23.

On August 5, 2026, Justice Céline Legendre of the Superior Court of Québec, Commercial Division, at Montréal, declared Goodfood a debtor company to which the CCAA applies, stayed all proceedings against it until 11:59 p.m. on August 14, appointed Raymond Chabot Inc. as monitor, and fixed a comeback hearing for 10:30 a.m. on the same day in courtroom 16.04 of the Montréal courthouse, in file 500-11-067591-269, per the Initial Order, Aug. 5, 2026, paras. 10, 13, 53.

The lender that had already been repaid

Goodfood came into the CCAA without an operating lender. Fédération des caisses Desjardins du Québec, its historical lender, holds three hypothecs on the universality of the company's present and future movable property, but the line of credit behind them had been reimbursed in full and cancelled before the filing. What remained of the relationship was a Visa credit card facility with a $1,300,000 ceiling, against aggregate usage of roughly $600,000 a month. The other registrations belong to equipment lessors and, in Royal Bank of Canada's case, to guaranteed investment certificates the application calls "no longer relevant," per the Application, Aug. 4, 2026, paras. 36–39. On the creditors' list the monitor published on August 12, 2026, seven secured creditors total $818,595.74, of which Desjardins is $805,275.00; 312 unsecured creditors total $48,846,538.32, per the Creditors' List, Aug. 12, 2026, pp. 1, 11.

Almost all of that unsecured total is two series of convertible debentures, which the application puts at about $43 million in capital and interest and at nearly 85% of the company's unsecured debt. The 2027 series was issued on February 11, 2022 to finance the online grocery division: $30,000,000 of unsecured convertible debentures bearing 5.75% and maturing March 31, 2027, trading on the TSX as FOOD.DB.A, of which $29,046,000 remains outstanding. They were issued as a single global debenture to CDS & Co. through TSX Trust Company as indenture trustee, and approximately 85% of the beneficial owners are objecting beneficial owners, whose identities the intermediaries do not disclose. The next interest payment on that series, $835,572.50, falls due on September 30, 2026. The 2028 series, $12,675,000 at a fixed 12.5% maturing February 6, 2028, is not listed and not widely held: Investissement Québec holds $10,000,000 of it and insiders — management, board members and shareholders — hold the remaining $2,675,000. Its August 6, 2026 interest payment was $950,200. The company swore it could not make either payment without jeopardizing its future, and that redeeming the 2027 debentures in shares at a three-cent share price would require issuing well more than its entire existing share count, per the Application, Aug. 4, 2026, paras. 50–71.

Beneath the debentures sit about $5.5 million of trade payables, roughly $970,000 of severance owed to 20 employees and stayed by the filing, and a proposed class action authorized on July 13, 2026 in Québec Superior Court file 500-06-001430-251, which alleges that Goodfood failed to disclose delivery fees adequately in the advertised price of its meal kits and which the company vigorously contests, per the Application, Aug. 4, 2026, paras. 41, 46, 73–76. Against all of it, the proposed monitor's non-consolidated balance sheet at June 5, 2026 shows $25,478,000 of assets against $62,274,000 of liabilities, and a working capital deficit of $3,951,000 where the same measure stood at a positive $7,160,000 on September 7, 2024, per the Report of the Proposed Monitor, Aug. 4, 2026, paras. 4.5–4.6.

What the company says happened

Revenue peaked in the pandemic and has fallen every year since, which the company attributes to customers returning to restaurants and grocery stores, to new competitors including grocers offering home delivery and global meal-kit operators, and to rising costs of food, labour, packaging, rent and delivery against the thin margins of the meal-kit business. Net sales were about $153 million in the year ended September 7, 2024 and about $121 million in the year ended September 6, 2025, with net losses of about $3.4 million and $8.1 million. The on-demand grocery division launched in November 2021 took the company's stock keeping units from roughly 50 to more than 1,000 and required significant capital expenditure before it was abandoned in October 2023 for want of profitability. Then, on December 30, 2025, the Canadian Food Inspection Agency suspended the Montréal facility's Safe Food for Canadians licence; it was reinstated on January 8, 2026, but for those ten days the plant could not process orders destined outside Québec, per the Application, Aug. 4, 2026, paras. 26–27, 77–82.

The new leadership's turnaround plan was already under way: price increases, paid membership programs that absorb delivery fees, fewer customer credits and promotions, advertising cut by about 80% over five months, and approximately 122 positions abolished. On a non-consolidated basis the third quarter of fiscal 2026 produced adjusted EBITDA of $3,648,000 and a net loss of $142,000, against nine-month adjusted EBITDA of $2,810,000 and a nine-month net loss of $9,740,000. The proposed monitor's conclusion on those figures was that cumulative adjusted EBITDA "remains insufficient to cover all of its financial charges" [translation], which include $3.8 million of interest on the convertible debentures, per the Report of the Proposed Monitor, Aug. 4, 2026, paras. 3.15, 4.3, 4.4.6. The company employs approximately 233 people — about 165 in Montréal, 52 in Calgary and 16 in Mississauga — at three leased facilities, per the Report of the Proposed Monitor, Aug. 4, 2026, para. 3.7.

Junior for nine days, then ahead of the Crown

The Initial Order granted an administration charge of $250,000 securing the fees of the monitor, its counsel and the company's counsel, and a directors' and officers' charge of $550,000 sized to one pay period of wages plus accrued vacation, per the Report of the Proposed Monitor, Aug. 4, 2026, paras. 7.1–7.2, 8.2–8.3. It then declared that both "shall rank junior to all other hypothecs, mortgages, liens, security interests, priorities, charges, deemed trust, options, encumbrances or security of whatever nature or kind," including Crown deemed trusts, per the Initial Order, Aug. 5, 2026, paras. 46–47. The company had said at the outset that it would ask for the elevation at the comeback hearing, per the Application, Aug. 4, 2026, paras. 102–103, 112–113, and the monitor confirmed that no increase in the amounts was being sought, only in rank, per the First Report of the Monitor, Aug. 12, 2026, paras. 6.1–6.2, 7.1–7.2.

On August 14, Justice Karen M. Rogers issued the amended and restated initial order that reversed the ranking: the two charges now rank ahead of every other encumbrance affecting the property, including statutory deemed trusts in favour of the Crown, with the administration charge first and the directors' charge second. The stay was extended to 11:59 p.m. on October 31, 2026. The order also authorizes Goodfood to keep honouring customer pre-payments, gift cards, loyalty programs and active subscriptions in the ordinary course, and to dispose of property outside the ordinary course up to $100,000 per transaction and $500,000 in the aggregate with the monitor's prior approval, per the Amended and Restated Initial Order, Aug. 14, 2026, paras. 14, 33, 45–48.