Old Flame Brewing: a receiver, and a deal at least six months from closing

On October 28, 2026, Justice W.D. Black of the Ontario Superior Court of Justice (Commercial List) appointed Ernst & Young Inc. receiver of the assets, undertakings and properties of Old Flame Brewing Co. Ltd., on the application of its lender, Farm Credit Canada, under s. 243(1) of the BIA and s. 101 of the Courts of Justice Act, per the Receivership Order, Oct. 28, 2026, p. 1 and para. 2. One of the company's two principals, listed among the appearances as a self-represented guarantor and recorded in the order as making submissions on the company's behalf, told the court that the company "has a deal in the works to refinance the business," per the Endorsement, Oct. 28, 2026, p. 1 and para. 17 and the Receivership Order, Oct. 28, 2026, pp. 1–2. The endorsement, released November 3, sets down what followed: "it became apparent that the deal, for which no documentation has been provided, would not ultimately close for at least six months." FCC asserted that there was "insufficient evidence of a pending transaction in the near term or otherwise, with any prospect of paying out the Respondent's stakeholders," and the court agreed, per the Endorsement, Oct. 28, 2026, paras. 18–19.

The company was incorporated in Ontario on March 7, 2013. On September 16 of that year the parcel register records a transfer of 135 Perry Street in Port Perry to it from the Liquor Control Board of Ontario, for $625,000, and the company's website, in screenshots attached to FCC's affidavit, says the building there "was originally built in 1874, and began as the Ontario Carriage Works," per the FCC affidavit, Aug. 10, 2026, paras. 3, 6 and Exs. "A", "B". The lot is about 0.19 acres, zoned industrial, with one structure, and the company runs a brewery and taproom there. At leased premises at 140 Main Street South in Newmarket it operates a brewery, a taproom, a remote working area for local residents and an upstairs community event space, and at leased premises at 43 Tank House Lane in Toronto, a taphouse. FCC's affiant was advised by EY that there are approximately 45 employees across those locations, per the FCC affidavit, Aug. 10, 2026, paras. 5, 8–10. The Toronto taphouse is in the Distillery District, FCC's factum says, per the Factum of the Applicant, Aug. 11, 2026, para. 51.

What FCC lent, and what it holds

FCC lent the company $2,350,000 in or about June 2022 under a loan agreement dated June 7, 2022, in three real property loans: $150,000 at FCC's variable mortgage rate plus 1.00%, $1,200,000 at that rate less 0.250%, and $1,000,000 at a fixed 5.4%. The variable rate was 5.95% when the affidavit was sworn. For security FCC took a $4,000,000 collateral mortgage on 135 Perry Street, registered June 17, 2022, which the affidavit says the parcel register shows as the only encumbrance on the property; a general security agreement giving it a first-priority interest in all of the company's present and after-acquired personal property; specific security agreements over the non-serial-numbered brewing equipment at Port Perry and at the Newmarket premises; a June 16, 2022 postponement letter from The Toronto-Dominion Bank, to which the affidavit attributes the priority of FCC's personal property security; and an unlimited guarantee from each of the two principals, per the FCC affidavit, Aug. 10, 2026, paras. 11–14, 19, 21–22.

The company owed FCC $2,134,570.95 on June 2, 2026 and $2,168,901.16 on August 7, with arrears of $37,841.45 and $93,360.61 on those dates, per the FCC affidavit, Aug. 10, 2026, paras. 16–17, 43–44. FCC's factum of August 11 says it had not received a payment from the company since May 1, 2026, per the Factum of the Applicant, Aug. 11, 2026, para. 61(c). By October 22 the balance was $2,203,624.74: $176,023.35 on the first loan, $1,060,281.54 on the second and $967,319.85 on the third, each with interest running, per the FCC supplementary affidavit, Oct. 22, 2026, para. 13. The property taxes on 135 Perry Street were $18,860.35 in arrears at April 10, 2026, per the FCC affidavit, Aug. 10, 2026, para. 25.

A forbearance built around remittances

The defaults FCC relies on include the company's failure to keep its statutory remittances to the Canada Revenue Agency current, and the tax arrears. FCC delivered a demand and a notice of intention to enforce security to the company and both guarantors on July 18, 2025, and they asked for forbearance, per the FCC affidavit, Aug. 10, 2026, paras. 27–29 and Ex. "Q". The forbearance agreement that followed, dated September 4, 2025, recites that the company was in default "as a result of its failure to keep its statutory remittances current" and that the obligors had asked for time "to address their statutory remittances." FCC agreed not to enforce until October 31, 2025 or an earlier event of default, and the debt was to be paid by then. The obligors were to keep current the federal, provincial and municipal remittances falling due during the forbearance, produce a remediation plan for the statutory remittances by September 30, and sign, with the agreement, a consent judgment for payment and possession, a consent to bankruptcy and a consent to a receiver under the model receivership order, per the FCC affidavit, Aug. 10, 2026, Ex. "R", recitals G, K and ss. 7, 9(d)–(e), 9(l), 23.

The remediation plan became a letter of intent. In Amendment No. 1, dated October 29, 2025, the parties recite that the obligors were to produce a satisfactory letter of intent by October 10 in lieu of the plan, that they produced it that day, that it was not exclusive and was subject to a sixty-day due-diligence period beginning October 17, and that FCC found it satisfactory. FCC extended the forbearance to January 15, 2026, and the amendment called for a copy of the definitive agreement by December 16, 2025, per the FCC affidavit, Aug. 10, 2026, paras. 31–32 and Ex. "S", recitals and s. 3.

The amendment also called for a written update on all statutory remittances by October 30. The evidence the company produced showed, the affidavit says, that its debt to the CRA had increased to $1,533,522.40, "contrary to section 9 (d) of the Forbearance Agreement." The CRA account overview attached to the affidavit, as of October 29, 2025, puts $939,766.78 of that on the payroll account and $592,389.91 on GST/HST, the remainder in three excise-duty accounts, per the FCC affidavit, Aug. 10, 2026, paras. 32–33 and Exs. "S", s. 3, and "T".

The company did not meet the amended terms by January 15, the affidavit says, and FCC terminated the agreement, on January 19, 2026 according to the recitals of the next amendment. FCC engaged a licensed insolvency trustee to evaluate the company's operations, finances and the status of any refinancing or sale. After several meetings, the affidavit says, the company agreed to the engagement and told FCC it needed more time to provide a firm agreement to sell or refinance the property, per the FCC affidavit, Aug. 10, 2026, paras. 34–36 and Ex. "U", recitals. FCC agreed to reinstate the forbearance for thirty days, to April 1, 2026. The affidavit and the endorsement both put that agreement on March 2; Amendment No. 2, which records it, is made as of March 27. In it the obligors acknowledged $2,142,069.93 owing at March 10, and undertook to produce by April 1 "a firm commitment to sell or refinance the Property (or additional properties not encumbered by the Mortgage) satisfactory to FCC," to give evidence of payment of the property's municipal taxes and of the remittances falling due from March 1, and to sign Ernst & Young Inc.'s engagement letter, per the FCC affidavit, Aug. 10, 2026, para. 37 and Ex. "U", s. 3 and the Endorsement, Oct. 28, 2026, para. 13. FCC's affidavit says the company provided neither the commitment nor the evidence by April 1, per the FCC affidavit, Aug. 10, 2026, para. 39.