Innovative Capital: the halibut licence closed, the trawler went to the receiver

Dominion Trading Limited owned a fishing licence and did not fish it. Groundfish Licence NL-013 was, in the words of Shawn Croft, the company's owner and president, "a highly valuable halibut commercial fishing license … one of only three such licenses granted in the country," and Dominion leased its quota to other harvesters a year at a time. It kept no books of its own; its records sat inside those of Innovative Capital Investments Inc., a Nova Scotia company owned by a trust of which Croft is sole trustee, which fished lobster, snow crab and groundfish from two boats. The two companies were supposed to become one. "We had planned to formally amalgamate DTL and ICII but this was prevented by DFO licensing requirements," Croft swore on January 30, 2025, per the Affidavit of Shawn Croft, Jan. 30, 2025, paras. 1, 4–6, 8, 10–13. The Bank of Montreal had lent Innovative Capital $10.6 million "to purchase 2/3 shares of DTL halibut license," and because that facility was meant to buy out the licence and fold Dominion into the borrower, BMO registered its security against the licence where it sat, per the Croft Affidavit, paras. 19, 23.

BMO's demand came on December 10, 2024, with a notice of intention to enforce its security for $15,685,296.69 of debt. On December 31 the companies missed a loan payment of approximately $1,000,000 because, Croft swore, they lacked "sufficient current assets, easily convertible to cash." His account of the cause, in part, was lobster landings below expectation in the season that opened November 30, 2024, on top of operating costs that had been rising "since supply costs, supply chain constraints, and other inflationary factors began emerging following the onset of the Covid-19 pandemic," per the Croft Affidavit, paras. 25, 28–29. The proposed monitor, Grant Thornton Limited, put Innovative Capital's income before taxes for the year to August 31, 2024 at $777,005, after $1.02 million of interest: "the Applicants cost of borrowing and long-term debt obligations exceeded that profitability resulting in a liquidity crisis." The plan was to sell the licence, and management expected the proceeds "would pay down a significant portion, if not all, the Applicants' debt," per the Pre-Filing Report of the Proposed Monitor, Feb. 10, 2025, paras. 33, 42(a). The Supreme Court of Newfoundland and Labrador granted CCAA protection on February 11, 2025, with Grant Thornton as monitor, per the Tenth Report of the Monitor, July 20, 2026, paras. 1–2.

By July 2026 the licence belonged to Hake Harvesters Limited, the trawler and Innovative Capital's two groundfish licences were in the hands of Ernst & Young Inc. as receiver on BMO's application, and the monitor was asking the court to end the CCAA, per the Tenth Report, paras. 10, 27, 31, 68.

Three lots, and what stayed out

The sale process approved on March 6, 2025 offered three lots: the R.S. Journey, a 49-foot fibreglass boat; lobster traps and gear; and "NL-013 - Offshore Halibut and Greenland Halibut," per the Third Report of the Monitor, Apr. 8, 2025, paras. 3, 29. Innovative Capital kept its trawler, the R.S. Journey II, and its two groundfish licences out, to go on fishing with them after the CCAA. The monitor recorded the one material dispute still outstanding over the process: "BMO prefers that the Companies include all their assets in the SISP, while the Companies do not." It found the companies' approach reasonable: the assets included appeared to have enough value to "either pay in full or substantially pay out the priority and secured creditor claims." Credit bidding was removed, and because "The Companies expect non-arm's length parties to participate in the SISP," they asked the monitor to run it, per the Second Report of the Monitor, Mar. 4, 2025, paras. 11–12, 16–20.

An offer came before the April 22 bid deadline, from an individual buyer who wanted the R.S. Journey, with 1,175 crab pots and 160 coils of rope, for the 2025 Newfoundland and Labrador snow crab season. His deal was conditional on closing by April 11 or a charter until then. The monitor considered him at arm's length, though he had in past years bought crab that Innovative Capital harvested, per the Third Report, paras. 5, 7, 17, 23. BMO opposed: it wanted the market to answer the April 22 deadline, and it argued that selling early gave up the 2025 crab margin, per the same report at para. 48. "The integrity of the SISP is sacrosanct," its lawyers wrote, per the BMO Memorandum of Fact and Law, Apr. 9, 2025, para. 18. The court approved the sale on April 14 and it closed the next day. The price, kept in a sealed appendix while the application was heard, appeared in the monitor's next report: $2,750,000, held in trust, per the Fourth Report of the Monitor, May 14, 2025, paras. 13–14 and the Tenth Report, paras. 4–5.

The deadline brought five bids from the 14 parties who had signed non-disclosure agreements, out of 330 contacted. Nobody bid on the lobster gear. Lot 3 drew multiple offers, and the monitor accepted one with the support of the companies and BMO, per the Fourth Report, paras. 20, 22–23. On May 23 that bidder terminated, "due to the Initial Successful Bidder's inability to complete the financing condition." The monitor reopened bidding to June 17, received two offers and accepted one; the companies supported it and "BMO does not oppose accepting the offer." The report also described a proposal to lease that season's 0B turbot quota to the buyer, the money to count against the price if the sale closed, per the Fifth Report of the Monitor, June 26, 2025, paras. 18–22, 44–47. The court approved the sale of Lot 3 on June 30, 2025, on terms set out in a confidential appendix to that report, per the Tenth Report, para. 7.

Zone 1

Closing required Fisheries and Oceans Canada to take the licence back from Dominion and reissue it to the buyer. The licence had to be "51% owned by a Canadian or Canadian corporation," and the buyer had to prove residency "through to the beneficial human owners." The 0B portion of the licence lies in Zone 1, Nunavut, and "triggers a duty to consult pursuant to 15.3.7 of the Nunavut Agreement" when the licence is not going to a Nunavut resident or corporation, and the buyer was not one. DFO expected its review to take a minimum of 90 days, per the Sixth Report of the Monitor, Sept. 3, 2025, paras. 19–22.

The request went to DFO in September; after consultation with Nunavut stakeholders, including the territorial government, the Minister of Fisheries, or a designate, would decide. On DFO's service standard of 90 business days, the monitor put the decision at approximately January 20, 2026. "DFO wishes to remind all parties that the request is subject to Ministerial discretion," it added, per the Eighth Report of the Monitor, Oct. 21, 2025, paras. 18–21, 28.

By December the consultation had not started. In a letter to the court on December 8, the monitor explained that DFO was revising how it decides Zone 1 requests, a process "to be redetermined as ordered by the Federal Court" in Nunavut Tunngavik Incorporated v. Canada (Fisheries and Oceans), and would wait until that work was far enough along before consulting on this one. DFO had told the monitor a ministerial decision before December 15, 2025 was "highly unlikely." That was the outside date for the buyer to close with the financing its lender had approved, and the monitor understood the buyer was asking the lender for an extension, per the Monitor's Letter to the Court, Dec. 8, 2025, pp. 1–2. On December 19 a DFO official wrote to the monitor: "We are aiming to complete consultations by mid-January," per the Ninth Report of the Monitor, Jan. 19, 2026, App. A, p. 15.