Korite: the last $751,872 goes to the farmer, not the bank

Before it was sold, KI Limited Partnership was Korite International — "an independent production and distribution company focused on the mining and refining of ammolite gemstones and ammonite fossils", finishing the gemstones into jewellery and the fossils into specimens, and selling to wholesalers and end customers, per First Report of the Receiver, May 14, 2026, s. 2.0, para. 2.

CIBC obtained a receivership order on September 5, 2024, owed approximately $4.75 million and US$3.82 million. On the same day it obtained an approval and vesting order for a sale to Buffalo Rock Mining Co. Ltd., and a discharge order. The transaction closed on September 9, per First Report, May 14, 2026, s. 1.0, paras. 1–5.

Four days from appointment to closing. Twenty months later, the receiver filed its first report.

Two quarries, one sold

Korite mined under surface leases at two sites: the Deerfield Quarry and the Vandervalk Quarry, per First Report, May 14, 2026, s. 2.1, para. 1.

Under the asset purchase agreement the purchaser assumed all environmental liabilities arising before, on or after closing in respect of the Deerfield Quarry. It did not assume any rights or obligations in respect of the Vandervalk Quarry.

And one clause of the receivership order itself turns out to matter more than anything else in the file. Paragraph 3(a) empowered the receiver to take possession of and exercise control over the property —

with the exception of taking possession of or exercising physical control over any ammonite fossil extraction operations, assets or sites of the Debtors

Per First Report, May 14, 2026, s. 2.1, paras. 2–3.

That carve-out was drafted in before anyone was appointed, and it is the single most consequential piece of drafting in this proceeding. It is why the receiver never became the operator of a quarry, and therefore never became the party responsible for restoring one.

The regulator refuses a cheque

On August 28 and September 3, 2024 — before the sale closed — Alberta Environment and Protected Areas contacted the debtors and KSV about reclamation obligations under the Environmental Protection and Enhancement Act. The proposed receiver reported that the potential obligations did not change its conclusion on the transaction, per First Report, May 14, 2026, s. 3.0, para. 1.

What followed is a twenty-month negotiation, and each step is instructive, per First Report, May 14, 2026, s. 3.0, paras. 2–13:

September 17, 2024 — the receiver wrote to AEPA setting out its position: Deerfield's liabilities went to the purchaser; Vandervalk's did not; the receiver had not taken possession of the Vandervalk Quarry and had no authority to do so; and it was working to understand what reclamation was required.

November 12, 2024 — with the mine manager's help, the receiver obtained a contractor's quote of approximately $508,104 for the reclamation work, and proposed simply to distribute that amount to AEPA — "given that the Receiver did not have the authority to take possession of the Vandervalk Quarry".

November 21, 2024 — AEPA rejected the distribution, advising that either the receiver or the debtors would be required to complete the work.

That refusal is the pivot of the whole file, and it is worth understanding why a regulator would decline money.

A cheque converts an obligation to restore land into a fund that a government must then administer, tender and supervise — assuming responsibility for a job it did not create. Reclamation is not a debt to be paid; it is work to be performed, and the EPA framework is built around identifying a "person responsible" who does it. AEPA wanted a party, not a payment.

November 28, 2024 — on a call with AEPA and Mr. Church, the receiver made three points that define the legal position: it acknowledged the Vandervalk EPA obligations rank in priority to CIBC; it reiterated that under the receivership order it was not authorised to perform the reclamation work and did not intend to; and it said its own obligation was limited to distributing the proceeds to the appropriate parties according to their priorities.

Environmental obligations ranking ahead of the first secured creditor is the ordinary Canadian position, and here the receiver conceded it without argument. The money at stake was never really CIBC's.

The price of the standoff

By mid-June 2025 — seven months on — the receiver had received no instructions from AEPA, from the landowner, or from Mr. Church as to whom the money should be paid.