Scierie St-Michel: final offers rejected, 45 days sought for an unsolicited one

The sawmill Scierie St-Michel Inc. runs in Saint-Michel-des-Saints has been shut since the construction holiday began on July 19, and the shutdown has now been extended to November 9, "with the aim of minimizing expenses and optimizing available cash flow" [translation], per the Fifth Report of the Trustee, Sept. 24, 2026, para. 40. Over the same weeks, the sale and investment solicitation process run for Scierie and its pellet-plant affiliate, SSTM Valorisation du bois Inc., came to its end without a deal. "The Final Offers received in the Process were formally rejected on September 15, 2026," the trustee, Ernst & Young Inc., reports [translation], and the deposit that accompanied them was returned to the bidders, per the Fifth Report of the Trustee, Sept. 24, 2026, para. 32. The debtors' application of September 23 gives the reason: the offers were refused "considering that no such offer made it possible to file a viable proposal to the Debtors' creditors or was acceptable to the Debtors' secured creditors" [translation], per the Application for an Extension of the Stay, Sept. 23, 2026, para. 7(c).

What they have instead is an unsolicited offer, received during the previous extension, which "is currently the subject of discussions and negotiations involving the offeror, the Debtors and the Secured Creditors" [translation], the secured creditors being Caisse Desjardins du Nord de Lanaudière and Investissement Québec, per the Fifth Report of the Trustee, Sept. 24, 2026, paras. 21, 33. To finish that negotiation the debtors ask for 45 more days, to November 9. They also ask for more interim financing from SSTM International Inc., Valorisation's parent, which the trustee's report puts at $507,600 for Scierie and $192,800 for Valorisation, with no charge attached, per the Fifth Report of the Trustee, Sept. 24, 2026, paras. 14, 51, 53.

When this case was last written about here, on September 2, the final offers were in, none had been rejected, the unsolicited offer was under analysis, and the debtors were due in court the next morning. On September 3 Registrar Alexandra Cartier granted what they asked: 21 more days to file a proposal, to September 25, and authority for Valorisation to borrow $284,500 more from SSTM International, for a maximum unpaid principal of $448,200, per the Order Extending the Stay of Proceedings, Sept. 3, 2026, paras. [5]–[6].

An offeror the debtors call new

The final offers had gone to EY-Parthenon Financement d'entreprise Inc., the process adviser, and to the companies, the trustee and the secured creditors alike, per the Fifth Report of the Trustee, Sept. 24, 2026, paras. 27, 32.

The application, verified under oath by Jean-François Champoux as president of both debtors, lists what the debtors and the trustee have done since September 3. Its last item is to "pursue serious discussions with a new offeror, which could make it possible, on the information currently available, to conclude a transaction sufficiently attractive to potentially allow the filing of a viable proposal to the Debtors' creditors" [translation], per the Application for an Extension of the Stay, Sept. 23, 2026, para. 7(d), p. 6. The 45 days, the debtors say, will likely let them finalize those discussions, and they may return before the new date to present their plan and seek the orders needed to go ahead with a transaction and file a proposal, or to take other restructuring measures, per the same Application for an Extension of the Stay, Sept. 23, 2026, paras. 9–10.

The trustee expects a separate application, once the negotiations are concluded, for approval of the transaction, a proposal, or some other restructuring measure. It supports the extension as time "to complete the discussions and negotiations around the unsolicited offer received and to establish the terms of the transaction or of the restructuring measures, all with a view to favouring the maximization of value for the benefit of all creditors" [translation]. It adds that the debtors have acted in good faith and with due diligence, and that no creditor will suffer serious prejudice, per the Fifth Report of the Trustee, Sept. 24, 2026, paras. 34, 55–57.

A lumber sale that slipped

The Fourth Report, reported here on September 2, had expected Scierie to fund itself from cash through September 27 and Valorisation to restart pellet and chip production gradually, per the Fourth Report of the Trustee, Sept. 2, 2026, paras. 37, 42. The receipts Scierie's forecast counted on have not come. In the three weeks from August 31 to September 20 it took in $2,024 against a budget of $60,000, of which $209 was sales. It spent $316,916, or $56,220 less than budgeted, including $85,242 in salaries and $49,085 under its arrangement with Royal Bank of Canada, and it closed the period with $19,015 of the $333,907 it opened with, per the Fifth Report of the Trustee, Sept. 24, 2026, App. A, p. 11. The trustee treats the $59,791 shortfall in sales as a matter of timing. Receipts from a sale of lumber now under way "have been pushed back a few weeks, since they depend on the wood delivery schedule, which has itself been postponed from the initial forecasts" [translation], and the revised forecast has them starting in the week of September 28, per the same Fifth Report of the Trustee, Sept. 24, 2026, App. A, p. 11, note 1.