Pelican International: $53 million to the lenders, a wind-down still to plan

Pelican International was founded in 1968 and made kayaks, canoes, pedal boats, stand-up paddle boards and fishing boats in Québec. In 2000 it bought the boat division of The Coleman Company, which carried it into mass-market retail in the United States; in 2019 it added Confluence Outdoor of Greenville, South Carolina, and in 2022 its U.S. holding company bought 85% of GSI Outdoors, a Spokane maker of camping cookware, per the Pre-Filing Report, Mar. 18, 2025, paras. 19–22, 24–32. The companies that did all of that now appear in the caption as 9541-1906 Québec Inc., 9541-1906 Inc. and 4624-4891, LLC. They "no longer own any assets or conduct any business operations," the monitor told the Superior Court of Québec on August 21, and since the sale of the business they have had no employees, and all of their directors have resigned, per the Application for a Stay Extension Order, Aug. 21, 2026, paras. 2, 19.

What FTI Consulting Canada Inc. holds for them is $4.3 million, mainly undistributed proceeds of the two sales. Its Seventh Report asks that the stay, due to expire August 28, run to September 30, to give the monitor time to "establish and implement a plan for the orderly wind-down of the CCAA Proceedings as well as the Chapter 15 Proceedings, and, subject to Court approval, effectuate any final distributions to the Lenders," per the Monitor's Seventh Report, Aug. 21, 2026, paras. 20, 39, 41, 48.

A creditor-led filing

The CCAA application came from the lenders, brought "in collaboration with the Debtors." National Bank of Canada, as agent for a syndicate with Bank of Montreal, Fédération des Caisses Desjardins du Québec and The Toronto-Dominion Bank, applied on March 18, 2025, eighteen days after Pelican had filed a notice of intention under the BIA with KPMG Inc. as proposal trustee. The syndicate's credit agreement of December 15, 2023, amended five times in the following year, provided a revolving facility of up to $175,000,000 and a US$60,000,000 term facility, and on the day of the application $39,976,555 and US$62,670,339 were outstanding under it, secured by first-ranking liens on all of the debtors' property in Canada and the United States. Forbearance had run since August 1, 2024. The last support and forbearance agreement, signed the day of the notice of intention, expired March 10, 2025. FTI had been the lenders' financial adviser since late December 2024. With the lenders owed approximately $130,000,000 and holding "the main economic interests," the proposed monitor called the proceedings "creditor-led," and said the lenders' support depended on the monitor receiving extended powers, per the Pre-Filing Report, Mar. 18, 2025, paras. 1–2, 13, 57–60, 73–79.

The pre-filing report's account of the decline starts with the pandemic, which brought "significant unforeseen growth and increased sales," and with it additional financing "to support the acquisition of the GSI equity, and pay a dividend." From 2023 the watersports market slowed: demand normalized after the lockdowns, retailers worked through excess inventory, and inflation led consumers to defer discretionary purchases. The debtors lost approximately $23.2 million before taxes in the year ended October 31, 2024, which the report puts down to weaker sales, continued operating expenses and "relatively high debt service obligations." National Bank Financial Inc. had been retained in July 2024 to sell GSI and received no satisfactory offers, and the report also cites the uncertainty of potential 25% U.S. tariffs on imports, per the Pre-Filing Report, Mar. 18, 2025, paras. 49–53, 65–68. At December 31, 2024, the three debtors reported consolidated book assets of approximately $229.3 million against $181.4 million of indebtedness, and suppliers and other unsecured creditors were owed approximately $18.7 million at February 27, 2025, per the Pre-Filing Report, Mar. 18, 2025, paras. 54, 56, 62.

Two going-concern bids

The going-concern sale process was set to run three weeks, funded by interim financing from the lenders at 12% a year that began at $4,000,000 and was raised to $6,800,000 on March 28, per the Monitor's Seventh Report, Aug. 21, 2026, paras. 4, 7 and the Pre-Filing Report, Mar. 18, 2025, para. 100. FTI and its affiliate, FTI Capital Advisors – Canada ULC, assembled a list of 235 prospective buyers; 53 signed non-disclosure agreements, and four offers arrived by the April 10, 2025 bid deadline. Two were going-concern bids for substantially all of the assets. The other two, for selected assets, were "substantially lower, including in the aggregate." Both going-concern bids came from Related Bidders, the procedures' term for a shareholder, director or officer, or someone related to one, who had to declare an intention to bid by March 27, per the Monitor's Third Report, Apr. 25, 2025, para. 43(a)–(f) and the Monitor's Second Report, Mar. 27, 2025, paras. 30–32. The monitor asked both for improved offers, then for best and final offers by 10:30 a.m. on April 16, with any purchase-price adjustment removed "to ensure greater purchase price certainty," and selected Groupe Mach Acquisition Inc. that day. "The GM Group includes former executives of the Pelican Group," per the Monitor's Third Report, Apr. 25, 2025, para. 43(g)–(i).

On April 28, 2025, Justice Andres Garin approved the sale of the Pelican and Confluence businesses to 9539-5893 Québec Inc., with Groupe Mach as guarantor. Certain former Pelican executives were minority shareholders of the purchaser, he noted, and the Mach Group was one of the debtors' landlords. The evidence was that the executives did not control the purchaser and that it was not a "related person" under s. 36(4) of the CCAA; in any event, he found, the criteria for a sale to a related person were met, because good-faith efforts had been made to sell to wholly independent parties and the consideration was superior to the other binding offers and to a liquidation bid the monitor had obtained, per the Oral Reasons for Judgment (AVO), Apr. 28, 2025, paras. 5, 16. Until the monitor's certificate of closing was filed, he sealed the price, the deposit and the holdback amount, along with the monitor's summary of the bids and the liquidation bid, finding that "the integrity of the SISP process represents an important public interest within the meaning of Sherman Estate" [translation], per the Minutes of Hearing, Apr. 28, 2025, pp. 3–4. The transaction was to keep the majority of approximately 461 active employees at work, per the Monitor's Third Report, Apr. 25, 2025, para. 44.

The monitor filed its certificate of closing on May 10, 2025. Two days later the sealed terms were published in the Chapter 15 case in South Carolina: a cash purchase price of $42,000,000 and a deposit of $4,200,000, per the Notice of Filing of Unsealed Terms of Asset Purchase Agreement, May 12, 2025, p. 2. The monitor had told the court the price was "significantly higher than the Liquidation Bid," per the Monitor's Third Report, Apr. 25, 2025, para. 57.