MNP Ltd., trustee in bankruptcy of Niagara Falls Craft Distillers Ltd., asks the Ontario Superior Court of Justice on November 13, 2026 to approve the sale of the distillery's Krones canning line and specified remaining equipment to Société Africaine de Production Industrielle SA, or SAPRI, a company incorporated under the laws of the Republic of Guinea. SAPRI would bear the costs and risks of dismantling, removal, transport and export, subject to its own arrangements with the landlord, and covenants to export the equipment from Canada within 42 days of closing. The price, in euros, is redacted from the public copy of the agreement, and the trustee asks that the unredacted copy, Confidential Appendix "1", be sealed until closing or further order, per the Notice of Motion, Nov. 3, 2026, relief (b)–(c), the Trustee's Report, Nov. 3, 2026, paras. 7, 28, 30, 44 and the APA, Oct. 26, 2026, s. 5.4(e).
The equipment has remained since 2024 at 8699 Stanley Avenue in Niagara Falls, the premises the company leased. The trustee has not taken possession of the building; occupation rent was approximately $50,000 a month before other costs, its report says, and its efforts to sell after the bankruptcy yielded no transaction. Two developments in 2026 set the timetable: on September 25, Bank of Montreal commenced receivership applications against the distillery, asserting approximately $3.55 million owing as at September 9, and against its landlord, CanadaBW Logistics Inc.; and CanadaBW's sale of the property, scheduled to close in mid-December 2026 with vacant possession, "imposes a practical deadline for the sale and removal of the Purchased Assets," per the Trustee's Report, Nov. 3, 2026, paras. 3(d), 19, 22, 24, 46(b)–(c).
A distillery, a lease and a canning line
Incorporated on February 25, 2016, the company carried on a licensed craft-spirit production, manufacturing and co-packing business from premises it leased from CanadaBW, per the Trustee's Report, Nov. 3, 2026, paras. 8, 22. MNP's first report as proposal trustee, in June 2024, described a company producing premium spirits "such as vodka, gin, whisky, and rum" and distributing its products in Canada and the United States, including to more than 160 LCBO stores. Drawing on the company's affidavit and its management, the report listed the company's challenges, beginning with two investments of November 2022, "a high-speed canning line" and a warehouse expansion: "the expected benefits from these investments have not yet materialized to sufficiently absorb the Company's increased operating costs arising from these investments." It added, among other things, pandemic costs, competition, LCBO delistings and higher debt-servicing obligations, per the First Report (App. B1), June 17, 2024, paras. 5, 8, 10.
In the NOI process the company listed total debts of $10,416,730. The report described two secured claims: BMO's, listed at $3,135,696 under a general security interest, and that of Alna Packaging Co. Ltd., listed at $3,911,234 with a claim on the canning line. The proposal trustee had not sought its counsel's opinion on the validity and enforceability of either security. BMO had issued a demand on May 9, 2024, with a notice of intention to enforce security under s. 244 of the Bankruptcy and Insolvency Act, per the First Report (App. B1), June 17, 2024, para. 12.
Three bids and no agreement
The company filed its notice of intention to make a proposal under s. 50.4(1) of the BIA on May 21, 2024, with MNP as proposal trustee, per the Certificate of Filing of a Notice of Intention, May 22, 2024. On June 20, on a motion the endorsement marks "Unopposed by BMO," Justice MacNeil extended the proposal period to August 5 and granted an administration charge of up to $125,000 for the proposal trustee, its counsel, the company's counsel and, in the event of a bankruptcy, the trustee in bankruptcy and its counsel, ranking in priority to all other security interests, trusts, liens, charges and encumbrances, per the Endorsement, June 20, 2024 and the Order, June 20, 2024, paras. 2, 4, 6.
Justice Antoniani approved a sale and investment solicitation process nunc pro tunc on July 30, extending the proposal period to September 19, per the Order, July 30, 2024, paras. 2–3. The proposal trustee reached out to 39 potential bidders, 13 of whom signed non-disclosure agreements, and extended the bid deadline to September 4, per the Third Report (App. B3), Sept. 17, 2024, paras. 18–20.
The process attracted three bids, including a going-concern proposal and equipment-realization alternatives. The company, in consultation with the proposal trustee, chose the going-concern bid, a share subscription agreement from 1414466 B.C. Ltd. that the proposal trustee understood would result in the bidder "continuing substantially similar business operations as the Company," per the Trustee's Report, Nov. 3, 2026, para. 13 and the Third Report (App. B3), Sept. 17, 2024, paras. 22, 32(c).
The negotiations "did not result in a definitive agreement," the trustee's November report says; "the material commercial and closing matters remained unresolved while NFCD's liquidity continued to deteriorate," and receipts and receivable collections fell below expectations. On September 30 the proposal trustee reported a material adverse change under s. 50(10) of the BIA. The company did not seek a further extension beyond October 4, the date to which Justice Sweeny had extended the proposal period, and on October 5, 2024 it was deemed to have made an assignment in bankruptcy, with MNP as trustee, per the Trustee's Report, Nov. 3, 2026, paras. 2, 14–16 and the Order, Sept. 19, 2024, para. 2.
On or about October 10, 2024, the report says, the trustee learned from the Alcohol and Gaming Commission of Ontario "that NFCD's licence to produce alcohol products had expired in January 2024." It "consequently learned that substantially all finished goods remaining at the Premises were unsaleable because they had been produced without a valid licence," per the Trustee's Report, Nov. 3, 2026, para. 18.
Why the trustee stayed out of the building
With the machinery, packaging materials and regulated alcohol product still at the premises, the trustee concluded that taking occupation solely to conduct a conventional liquidation "was not commercially reasonable"; the assets were also subject to asserted secured, statutory and proprietary claims, including those of Alna, BMO and the Canada Revenue Agency, per the Trustee's Report, Nov. 3, 2026, para. 19. A party that inspected the assets in early 2025 did not proceed with a purchase. The trustee was advised that the integrated condition of the equipment, the wall opening and restoration work required, the canning line's condition, disposal costs and market conditions "materially reduced net realizable value." The report adds that regulatory and licensing restrictions "materially constrained" the estate's ability to monetize the alcohol inventory, which is not part of the proposed sale, per the Trustee's Report, Nov. 3, 2026, paras. 20–21.
The bank's applications and a final week
BMO's applications sought the appointment of Doane Grant Thornton Limited as receiver, and a receiver over the premises "in anticipation of potentially completing a sale of the Premises that required CanadaBW to provide vacant possession on closing," per the Trustee's Report, Nov. 3, 2026, para. 24.
Both came before Justice Dunphy on the Commercial List on October 2. The distillery's application was "undefended," the endorsement records, and the company "has been in bankruptcy for a while, an issue that does not impede the Bank from enforcing its security." CanadaBW, the judge noted, believed it was "on the cusp of securing a viable sale agreement that will repay the bank in full with a healthy surplus to the debtor"; the equipment in its building "has been an impediment to a sale, but they believe they have a buyer lined up to take it away and pay for it." The bank, Justice Dunphy wrote, "has grown weary of hearing about what deals are around the corner for some time now." The judge adjourned to October 9, "this last, small indulgence," per the Endorsement, Oct. 2, 2026 (App. C), paras. 2–3, 5–6, 8.
Keep reading with a 5-day free trial
About 5 more minutes of this analysis, and 2 more sections. Every fact in it cites the filing it was read from.
Card required. Nothing charged for 5 days. Cancel anytime.
Already a subscriber? Sign in.
See all plans