Innovative Capital: a pollock overage holds up the groundfish licences

Innovative Capital Investments Inc. held two inshore mobile groundfish licences, numbered 103562 and 100405, with their assigned percentage of the individual transferable quota for Nova Scotia groundfish: redfish, haddock, pollock, winter flounder and cod, per the First Report of the Receiver, June 3, 2026, paras. 14(b), 18. In 2025 licence 103562 carried a current quota of 30.031 tonnes of pollock in NAFO area 4X,5, and the landings reported against it came to 89.151 tonnes, an overage of 59.120 tonnes. The same table, the receiver's summary of 2025 allocations, landings and overages by species, shows smaller overages in cod, haddock, winter flounder and silver hake. DFO officials advised the receiver that Innovative's reported landings in 2025 "(during the CCAA administration)" exceeded its allocations for certain species, and the receiver reported that the licences "are non-compliant and DFO will not transfer the Licenses without the Quota overages being addressed." Pollock was the main source: "the Company reported landings in 2025 nearly three times its permitted limit," the receiver wrote, per the First Report, paras. 19–20 and table, p. 6.

When the matter was reported here on July 25, the CCAA had continued alongside the receivership so that the monitor could complete one sale, of the offshore groundfish licence NL-013 to Hake Harvesters Limited, which it had since closed. Ernst & Young Inc. had been receiver of the companies since January 21, on the Bank of Montreal's application, and the monitor was asking the court to end the CCAA, per the Tenth Report of the Monitor, July 20, 2026, paras. 10–11, 13(b), 20(d)–(e). The receiver's notice of motion of September 29 says the CCAA proceeding was terminated by order on July 28, 2026, per the Notice of Motion, Sept. 29, 2026, para. 4. The trawler R.S. Journey II and the two groundfish licences, kept out of the CCAA sale process, had been listed by a broker at $1.6 million each, and as of January 16, 2026 no acceptable offer had come for either, as the receiver summarized the monitor's Ninth Report in its First Report, paras. 31, 35.

Quota from other fishers

The licences carry a percentage of the total allowable catch for NAFO areas 4VWX5, so their tonnage changes in proportion to the catch limit each year, and the fishery runs from April 1 to March 31, per the First Report, para. 18. The receiver set out two ways to address the overage. DFO could cut Innovative's future allocations, which "will temporarily reduce the value of the Licenses to 3rd party purchasers," or the receiver could "purchase unused quota allocations from other fishers to address the fishing overages." It went to industry brokers and known quota holders, and by June 3 it was "in the process of acquiring 17 tonnes of Pollock quota (reducing the overage)" along with what it needed for the silver hake and winter flounder overages, per the First Report, paras. 20–21.

By September 28, the Second Report says, the receiver had secured "certain pollock quota (reducing the overage)" and the quota it needed for silver hake and winter flounder. "However," the report continues, "as not all Quota deficiencies have been addressed, the Licenses remain in a non-compliant position and DFO will not transfer the Licenses without the Quota overages being addressed." The receiver said it would keep looking for ways to address the overages "on commercially reasonable terms with the intention to eventually liquidate this asset," per the Second Report of the Receiver, Sept. 28, 2026, paras. 14–16.

The tender

The receiver began with the broker the companies had used, Maritime Marine Brokerage, on a new listing agreement, citing the firm's past involvement, its familiarity with the assets and its ability to keep marketing them without delay: the season opened on April 1, and it considered the weeks before then "a critical time frame where market interest might best be achieved for these assets." MMB presented a limited number of offers for the vessel alone and for the vessel and quota together, among them three from Shawn Croft, the principal of the business, in the first weeks of the receivership. It generated no stand-alone offer for the quota, and the receiver reported that the MMB offers as a group "were substantially below the offer levels identified and commented upon by the Company and the Monitor during the CCAA administration," per the First Report, paras. 13, 34(c), 36–37.

On March 20 the receiver ended the listing, and on April 2 it opened a sale by tender, with bids due May 13. It contacted 438 prospective bidders, sent the package to MMB and other brokers and to Mr. Croft, and ran notices of tender in the Chronicle Herald in Nova Scotia and the St. John's Telegram, per the First Report, paras. 38–40. The package offered two parcels, the vessel and the two licences with their quota, and asked for a 15% deposit with each tender. It described the R.S. Journey II as a 64-foot-11 fibreglass groundfish dragger built in 2002 by Green Bay Fibre Products of Newfoundland and Labrador, with a 2023 Baudouin main engine, berthed at Dennis Point Wharf in Lower West Pubnico, per the Tender Information Package, Apr. 2, 2026, pp. 4, 13–14, 17, 22.

On May 13, after consulting the bank, the receiver rejected all offers for the quota, on three grounds: the values were low, the holding costs for the quota were limited, and "as a result of the 2025 overfishing, the Licenses were not in good standing and not capable of being transferred at this time." It accepted an as-is, where-is offer for the vessel from Tillers' Fish Harvesters Ltd. Its reasons were that the price was reasonable given "the broad marketing efforts expended" and the market assessment in a confidential supplement, that the estate would avoid the cost of the vessel's Canadian Steamship Inspection, whose certificate was due to expire on May 30, 2026 and would become the buyer's obligation, and that holding costs, among them insurance, berthage and inspections every two days, would end at closing, per the First Report, paras. 15–17, 41–42.

Justice Alexander MacDonald approved the transaction and the activities in the First Report on June 25, per the Asset Vesting Order, June 25, 2026, paras. 2–3, and sealed the confidential supplement until the receiver's certificate on the sale was filed or the court ordered otherwise, per the Sealing Order, June 25, 2026, para. 1. The receiver closed the sale on August 25 for gross proceeds of $450,000, per the Second Report, para. 9 and App. A, p. 13.

What the receiver held, and who claimed it

At August 31 the receiver held $14,761,178.93 in trust. Of the $15,040,816.22 it had received since January 21, $14,272,730.77 was the net recovery from the CCAA's sales of the licence and the R.S. Journey, passed on by the monitor; the trawler's $450,000, $67,200 from vehicles and $61,750 from equipment were among the rest. Disbursements came to $279,637.29, per the Second Report, paras. 12–13 and App. C, p. 19.