Island Fishermen's: a proposed sale process, without the WhiteCap shares

On September 28 the members of the Island Fisherman's Co-operative Association Limited, a seafood processor in Lamèque, New Brunswick, incorporated in 1940 and under the CCAA since August, met in a special meeting and, the co-operative has advised its monitor, voted unanimously that its facilities and assets be sold through a court-approved sale and investment solicitation process conducted by the monitor, Ernst & Young Inc. The co-operative is licensed to produce and export lobster, snow crab and rock crab, has 239 members, 91 of them active, and at the peak of a season employs up to approximately 360 seasonal workers. Its books list among its creditors the Business Development Bank of Canada at $7.9 million and its members' loan capital at $4.7 million, per the Third Report of the Monitor, Oct. 6, 2026, paras. 1, 10–16, 18–19.

A piece published here on September 22 reported the calling of that vote and the WhiteCap and Beothic share claims. On September 24, Justice Darrell Stephenson extended the stay of proceedings to November 16, 2026, per the Further Amended and Restated Initial Order, Sept. 24, 2026, para. 2. The co-operative has now applied for approval of its proposed process and for a further extension to February 26, 2027. The monitor recommends both, and the process's timetable has the co-operative obtaining the order by October 9, per the Third Report of the Monitor, Oct. 6, 2026, paras. 19, 28, 48, 50. No order on that application is in the record read for this piece.

Six holdings left out

The process would solicit offers to buy, or invest in, all or part of the assets used to run the licensed plant at Lamèque, "as is, where is" and free and clear of encumbrances. Six holdings would be excluded: the co-operative's interests in WhiteCap International Seafood Exporters Inc., Les Fruits de Mer Atlantic Queen Limitée, Atlantic Premium Shellfish Inc., Habitat des Pionniers Inc., Coopérative d'Énergie Renouvelable de Lamèque Ltée and La Société coopérative de Lamèque, per the Third Report of the Monitor, Oct. 6, 2026, paras. 23–25.

Among the report's reasons, the holdings are not integral to the core business, each would need its own preparation to be transaction-ready, and holding costs are limited. WhiteCap "has stated its intention to oppose the inclusion of the Company's WhiteCap shares as part of the SISP," and the company and the monitor are concerned that determining that issue could delay the court's approval of the process. Beothic Fish Processors Limited, which holds the other 50% of Atlantic Queen, has given notice of a claim regarding the co-operative's shares, and the company and the monitor have "similar concerns regarding potential delays." The exclusion, the report says, would give the company, the monitor, WhiteCap and Beothic an opportunity for further discussions "that may result in a resolution acceptable to the parties, subject to the approval of this Honourable Court," per the Third Report of the Monitor, Oct. 6, 2026, para. 26 and the Second Report of the Monitor, Sept. 21, 2026, para. 42.

Bids due January 14

The monitor would administer the process with the assistance of EY's Corporate Finance practice, and has developed a target list of national and international industry players to approach. Outreach would begin by November 2, and advertisements would run in the Telegraph Journal and Acadie Nouvelle in November. Insiders and the secured lender would have until November 13 to declare their participation, and bids would be due at 5:00 p.m. Atlantic time on January 14, 2027. The sale approval motion would be heard on or before February 12, with a target closing on or before February 26 and an outside date of March 12, 2027. The monitor considers the timeline reasonable, "particularly given the time of year," per the Third Report of the Monitor, Oct. 6, 2026, paras. 28, 37.

Bids would have to be binding, not conditioned on unperformed due diligence or on financing, and carry a non-refundable deposit of 10% of the purchase price, including the value of any secured debt to be assumed. A bid needing the support and approval of BDC, the senior secured creditor, would need it confirmed before submission, and a sale proposal would have to describe how existing employees would be addressed. The monitor, in consultation with the co-operative and BDC, would select any successful bid, and "shall be under no obligation to designate the highest and otherwise best Bid, or any Bid, as a Successful Bid," per the Third Report of the Monitor, Oct. 6, 2026, App. "B" (SISP), paras. 12(g), 23, 30–31.

"Management and the Board are expected to play a key role within the SISP given their industry knowledge and direct knowledge of the Business and Property," the monitor writes in the Third Report of the Monitor, Oct. 6, 2026, para. 20. A manager or director who is or may become part of a purchaser or investor group would have to tell the monitor, competing parties would be told, and the monitor would supervise that person's meetings with other bidders, per the Third Report of the Monitor, Oct. 6, 2026, App. "B" (SISP), para. 22.

Cash, and a crew for the spring

At October 3 the co-operative held $3,816,696, $383,801 less than forecast, primarily because net settlements from WhiteCap for August sales came in $0.54 million below forecast, which the report attributes to timing; the co-operative expects them in the week ending October 10. Its new 21-week forecast, to February 27, 2027, projects receipts of $0.79 million, $0.55 million of them those settlements, against disbursements of $2.80 million, per the Third Report of the Monitor, Oct. 6, 2026, paras. 40–43 and App. "C".

"The Company, if operating, will require approximately 135 temporary foreign workers for the Spring 2027 fishing season," the report says. The forecast provides about $135,000 of Service Canada administrative fees and about $61,000 of work permit agency fees, each plus HST, which the monitor understands must be paid within the forecast's timeframes so that the co-operative can access that workforce, "if required for the Spring 2027 season," per the Third Report of the Monitor, Oct. 6, 2026, para. 46.

The monitor supports the extension to February 26 "to provide the Company with adequate time to implement the proposed SISP described herein." It is of the view that the co-operative is acting in good faith and with due diligence, and is not of the view that proceedings under the Bankruptcy and Insolvency Act would be more beneficial to its creditors, per the Third Report of the Monitor, Oct. 6, 2026, paras. 48–50.