Island Fishermen's: the co-operative stops buying from its owners

In July 1940, nineteen men of the Parish of Shippegan — three Chiassons, four Gauvins, five Noëls, three Paulins, two Duguays, a Jones and a Gibbs — took letters patent from the New Brunswick Department of Agriculture for a co-operative association. Among its objects was to secure the best market for the sale of property of its members, and to arrange for the transportation of such property. Shares were five dollars. The chief registered place of business was Petite Lamèque, Affidavit of Brian Bezeau, sworn Aug. 6, 2026, Exhibit "C" (Certificate of Incorporation, July 9, 1940).

Eighty-six years on, the co-operative has 91 active members and a plant at 90, rue Principale in Lamèque, and the cash flow forecast filed with its application for creditor protection projects that it will buy nothing from any of them. Over the four weeks to September 5, 2026 the forecast shows receipts of $20,000 a week from the fish market at the plant door, one advance of $104,600 from its broker against rock crab already delivered, and nothing else. Ernst & Young Inc., as proposed monitor, gave the reason in a sentence: the forecast reflects the applicant's current decision not to operate during the fall lobster, snow crab and rock crab season, per Pre-filing Report of the Proposed Monitor, Aug. 7, 2026, para. 30 and App. B.

What the members signed up for

The co-operative processes lobster, snow crab and rock crab, runs a fish market at the plant, and owns six houses in which it lodges the temporary foreign workers who staff the line. Part of the plant sits on land subleased from the Lamèque Port Authority; the land belongs to Fisheries and Oceans Canada. Until 2024 it also processed Nordic shrimp, abandoned after a cut to its allocated quota made the product unprofitable, per Affidavit of Brian Bezeau, sworn Aug. 6, 2026, paras. 7, 22–23. It employs eleven people year-round and, at the peak of a season running April to December, up to about 360 more — a business the monitor calls a substantial employer in the region, per First Report of the Monitor, Aug. 19, 2026, para. 13.

What makes this debtor unlike the others is set out in its own general by-law. A fisher becomes a member by subscribing for twenty $5 shares, and the co-operative funds those shares by retaining up to 5% of the value of the product he sells it, crediting the withholding against his subscription until it is paid; a plant worker's shares are funded the same way out of his wages. The by-law then permits the board to expel a member who fails to honour his contracts with the co-operative — in particular as to the delivery and sale to it of the products of his fishing — or who supports a competing business with his catch. Twelve consecutive months without a business relationship, and a member must withdraw, per Affidavit of Brian Bezeau, sworn Aug. 6, 2026, Exhibit "D" (General By-law), arts. 2.2–2.3, 4.1.

Until 2019 those contributions were compulsory, and they accumulated into a fund the affidavit calls the Loan Capital, which stood at approximately $4,669,000 as at June 30, 2026 and is an unsecured liability, per Affidavit of Brian Bezeau, sworn Aug. 6, 2026, paras. 10, 18, 51. Repayment is governed by a withdrawal policy the board adopted on March 29, 1987 — a date corrected by a supplementary affidavit, the first having put it at 1992, per Affidavit of Brian Bezeau, sworn Aug. 10, 2026, para. 3. The policy's operative line reads: "Notwithstanding what follows, this policy applies only when the financial situation of the Association Coopérative des Pêcheurs de l'Île Limitée permits it." [translation] What follows is a queue, urgent cases such as a member's death first. And the by-law's dissolution article ranks members last of seven, behind wages, source deductions, taxes, municipal charges, priority creditors and suppliers, for both their shares and their lent capital.

The 91 members are therefore suppliers, owners and the third-largest creditor class at once, and their own constitution already tells them their capital comes back when the co-operative can afford it. A stay adds less to that position than it would to an ordinary trade creditor's. What it does reach is set-off, which the affidavit lists among the things restrained, per Affidavit of Brian Bezeau, sworn Aug. 6, 2026, para. 67 — and set-off against unpaid landings is what a fisher who is also a lender would otherwise reach for.

The board carries the same double role across nine seats: three fisher-members for the shrimp, crab and inshore fisheries, three community members, three non-unionized employees below management. The composition is meant to avoid the appearance of conflicts of interest with fishers when the co-operative negotiates the price at which it buys their product, per Affidavit of Brian Bezeau, sworn Aug. 6, 2026, paras. 12–13. One seat is vacant, and one of the fishery seats speaks for a fishery the plant stopped processing two years ago.

Nine days, and one charge

At a special meeting in Lamèque on July 6, 2026, the board resolved, in French, that "the financial situation of the Association Coopérative des Pêcheurs de l'Île Limitée is such that there is insolvency" [translation], and that BDC was considering its options with a view to securing its interests. The general manager, Brian Bezeau, was authorized to apply, per Affidavit of Brian Bezeau, sworn Aug. 6, 2026, Exhibit "A" (Board Resolution, July 6, 2026).

The application was filed on August 7 and heard at 10 Peel Plaza in Saint John on August 12, in court file SJM-147-2026. Justice Darrell Stephenson granted the initial order effective 12:01 a.m. that day, appointed Ernst & Young monitor, and stayed proceedings for nine days, to August 21. The order carries one charge: an administration charge of $100,000 for the monitor, its counsel and the applicant's counsel, ranking ahead of all secured creditors, "including for certainty, Canada Revenue Agency and the Business Development Bank of Canada," per Initial Order, Aug. 12, 2026, paras. 12, 17, 23, 25. There is no directors' and officers' charge, no interim financing and no key employee retention plan; the order authorizes payment of D&O insurance premiums as an ordinary expense and nothing more.

The service list attached to the notice of application ran to seven names: BDC, the Atlantic Fisheries Fund, the Atlantic Canada Opportunities Agency, the Canada Revenue Agency, the Office of the Superintendent of Bankruptcy, the Financial and Consumer Services Commission and the Lamèque Port Authority, per Notice of Application, Aug. 7, 2026, Schedule "A". A bank, two funders, the tax authority, two regulators and the landlord — no fisher, no member, no union, no broker.

Nor did the argument dwell on what kind of debtor this is. The pre-hearing brief disposes of the point in two paragraphs: "company" in s. 2(1) of the CCAA includes any legal person incorporated under a provincial Act, the applicant is a body corporate incorporated under the laws of New Brunswick, and a "debtor company" is one that is insolvent, per Pre-hearing Brief, Aug. 7, 2026, paras. 40–41. Members' Loans appear once, in the background section, as an unsecured line item. Nothing in the brief asks whether a member's withdrawal right is a claim, whether the obligation to deliver a catch survives a stay, or what a stay does to a person who is at once shareholder, supplier and lender.