Joriki: a motion to make the recall insurers pay

On July 5, 2024, the Canadian Food Inspection Agency told Joriki Inc. that it was investigating an outbreak of listeriosis in Ontario. Of nine confirmed cases, six people had reported drinking Danone Inc.'s Silk, with a date code showing it was made at Joriki's plant at 885 Sandy Beach Road in Pickering; the agency required Joriki to keep the line that produced it running until July 6 and then allowed it to shut the line down, according to the Affidavit of Michael G. Devon, Jan. 22, 2025, paras. 20, 51. A recall warning for Silk and Great Value plant-based refrigerated beverages followed on July 8. The Public Health Agency of Canada later linked 20 laboratory-confirmed cases to the outbreak, with 15 people hospitalized and three deaths. On October 29 the CFIA said it had been unable to confirm the primary source of the contamination within the Pickering plant, and Joriki's chief financial officer deposed that the company had made no determination of the source or of its own liability, if any, per the Affidavit of Michael G. Devon, Jan. 22, 2025, paras. 21–23.

Two years later, the insurance Joriki carried against that kind of event is, in its own words, its "most significant remaining asset," and the only material work left in its CCAA proceeding is to collect on it and distribute what comes in to its secured lenders, per the Aide Memoire of the Applicants, Aug. 14, 2026, paras. 5, 9. The applicants, Joriki TopCo Inc. and Joriki Inc., have brought a motion in the Ontario Superior Court of Justice (Commercial List) for orders requiring HDI Global Specialty SE to pay $5,000,000 and Intact Insurance Company to pay $1,024,300.26, each within ten days, with interest and with full indemnity costs against HDI. On August 18, at a scheduling appointment, Justice Conway fixed a half-day hearing for November 3, per the Endorsement of Justice Conway, Aug. 18, 2026, paras. 1–2.

A co-packer, four plants and a recall

Joriki was founded in 1991 and made juices and plant-based beverages under contract, chiefly for large consumer packaged goods companies, from plants in Scarborough and Pickering, Ontario, Delta, British Columbia, and Pittston, Pennsylvania. Three customers accounted for about 75% of its Canadian case volume in fiscal 2024. On December 30, 2024, the group had about 565 employees, some 337 of them at Joriki Canada, per the Affidavit of Michael G. Devon, Jan. 22, 2025, paras. 4–5, 47, 57.

In the company's account, the trouble started in Pennsylvania. The Pittston plant, begun in 2022 with about $150 million of additional financing from the senior lenders and Roynat Capital Inc., ran into delays and cost overruns and had only five of its seven contemplated lines working. A turnaround plan in the spring of 2024 was, the affidavit says, "derailed by the organizational and financial strain of the Recall." Pickering, which in fiscal 2024 was Joriki's largest plant by case volume, was idled after the CFIA named Joriki as the manufacturer on August 7, 2024; customers paused production at Delta, which was not implicated, and Canadian run-rate volumes fell by more than half, per the Affidavit of Michael G. Devon, Jan. 22, 2025, paras. 8, 16–19, 24–25.

The recall brought claims of its own. Joriki was named with Danone and Walmart in a proposed Quebec class action on behalf of everyone in Canada who bought the recalled drinks, and a second proposed class action was started in British Columbia. Danone's counsel, McCarthy Tétrault LLP, wrote giving notice of claims against Joriki and demanding compensation and indemnity for Danone's damages, and asked that "Joriki's insurers are promptly notified of Danone's claims and demands," per the Affidavit of Michael G. Devon, Jan. 22, 2025, paras. 26, 81–82, Ex. "E".

In late December 2024, after the loss of a key customer and the withdrawal of potential purchasers from a sale process, the senior lenders, The Bank of Nova Scotia and The Toronto-Dominion Bank, said they would no longer fund the business as a going concern. Joriki stopped operating on December 31, terminated substantially all of its employees and filed a notice of intention to make a proposal under the BIA; Joriki USA Inc. filed under Chapter 7 in Delaware on January 12, 2025. The senior facilities stood at $192,100,408 at December 31, 2024, with $17,341,510 owing to Roynat behind them, and the affidavit said no value was expected to be available for other creditors, per the Affidavit of Michael G. Devon, Jan. 22, 2025, paras. 9–11, 28, 64. Justice Osborne granted the initial order on January 28, 2025, taking the proposal proceeding up under the CCAA with Alvarez & Marsal Canada Inc. as monitor, per the Second Report of the Monitor, Mar. 24, 2025, paras. 1.1–1.5.

Selling the plants, keeping the claim

The Toronto facility's assets went to Top Shelf Food and Beverage Corp. in a sale that closed February 28, 2025, and the Delta assets to Happy Planet Foods, Inc., closing March 7, for aggregate gross proceeds of about $11.1 million. On March 14 the monitor paid $10.6 million to the agent for the senior lenders. Maynards Industries II Canada Ltd. liquidated the equipment at Pickering for total net proceeds of about $3.5 million, per the Second Report of the Monitor, Mar. 24, 2025, paras. 4.1–4.6, 5.5.

On March 27, 2025, Justice Osborne granted an order under which the case could finish without a further act or formality. Once the monitor served a first certificate, Joriki's directors and officers would be deemed to have resigned and the monitor could exercise the board's powers, including to "assert all insurance claims of the Applicants" and to bring proceedings to recover insurance proceeds; the CCAA proceedings would end, and A&M would be discharged, when it served a second certificate confirming that all matters had been completed to its satisfaction, per the Expansion of Monitor's Powers and CCAA Termination Order, Mar. 27, 2025, paras. 3–4, 14, 16. The monitor's report on that motion listed among the remaining activities "continuing to evaluate and consider the Applicants' options to pursue claims under their insurance policies for losses in connection with the Recall." The remaining matters were limited, it said, and while further relief from the court was possible, "it is also possible that such matters may be resolved without returning to Court," per the Second Report of the Monitor, Mar. 24, 2025, paras. 9.10(a), 12.1(b).

The first certificate is dated April 27, 2025, per the Monitor's Certificate, Apr. 27, 2025. Approving the sale of forklifts and reach trucks located at Pittston that June, Justice Osborne wrote, "This restructuring is largely complete," per the Endorsement of Justice Osborne, June 27, 2025, para. 4. The monitor's report for that hearing put cash on hand at about $4.2 million and still listed the insurance claims among the work to be done, per the Third Report of the Monitor, June 23, 2025, paras. 7.3, 10.1(b).

Six months after coverage

HDI issued Joriki two policies, for July 1, 2023 to July 1, 2024 and July 1, 2024 to July 1, 2025, each with a combined single aggregate limit of $5,000,000. They cover accidental contamination and government recall, and the losses they insure include gross profit lost for up to 18 months, product rehabilitation expenses, the increased cost of working, defence costs and third-party recall liability damages, per the notice of motion dated July 30, 2026, attached to the Aide Memoire of the Applicants, Aug. 14, 2026, Sched. "A" (Notice of Motion), paras. 11–15.