Teal Jones: the sales wait on the Competition Bureau

On September 18 the court approved the share sale to Gillfor Manufacturing Inc. and the Sumas asset sale, which together, in the monitor's words, "contemplate the sale of all remaining SISP assets." On October 1 the U.S. Bankruptcy Court issued a recognition order for the Sumas approval and vesting order, "satisfying one of the closing conditions to both the SPA and the Sumas APA," per the Thirty-Second Report, Oct. 6, 2026, paras. 95–96. The orders, and the fight over Domtar's supply contracts that preceded them, were reported here on September 23.

One condition left

"The only remaining condition to the closing," the monitor reports, "is Competition Canada either advising that it has no issues with the Transactions or approving the Transactions." The initial application went in on September 4, and the monitor says all parties have been responsive to the Bureau's "substantial informational requests," per the Thirty-Second Report, Oct. 6, 2026, para. 97. The deadline Gillfor and the monitor had been working towards was October 15, "the date on which the current financing commitments for the Surrey Buyer and the Sumas Buyer are set to expire," per the Thirty-Second Report, Oct. 6, 2026, para. 97.

On September 29, by the monitor's account, the Bureau "advised the parties that it viewed the matter as 'complex', and it will need to extend the time for review out potentially to November 12, 2026." That timeframe, the monitor writes, "would cost the estate significant amounts," including additional professional fees and additional interest on the interim lenders' facilities of approximately $230,000 each week, per the Thirty-Second Report, Oct. 6, 2026, para. 98. Counsel for the monitor and for Gillfor "are working hard to address these issues in the hopes of closing as soon as possible," per the Thirty-Second Report, Oct. 6, 2026, para. 98.

The share purchase agreement says what counts as that approval. In the share purchase agreement's version consolidated through the seventh amendment, Competition Act approval is a condition for the benefit of both buyer and seller, and only the two of them together can waive it. The agreement defines it in two ways: an advance ruling certificate from the Commissioner of Competition under s. 102 of the Competition Act, or, in the alternative, the end of the waiting period (by expiry, termination or waiver) or a waiver of the obligation to give pre-merger notification, accompanied by a no-action letter from the Commissioner, per the Redacted Share Purchase Agreement (Consolidated), ss. 1.1(t), 5.1(c).

Ten more weeks on the revolver

In the four weeks to September 18, the Teal-Jones group spent $5,658,000 on raw materials, $767,000 more than forecast; log purchases ran high, the variance notes say, "as a result of higher production," per the Thirty-Second Report of the Monitor, Oct. 6, 2026, App. "A", note 3. The forecast for the ten weeks after that, prepared by management with the monitor's assistance and filed with the Thirty-Second Report on October 6, has $1,200,000 of log purchases for the small log mill in Surrey in every week through November 27, and $30,800,000 of sales, mostly lumber and by-product. The petitioners draw on the interim lenders' facility to pay their disbursements, and their bank accounts are swept to pay it down, per the Thirty-Second Report, Oct. 6, 2026, para. 102; App. "B", notes 1, 5, 12.

The four weeks to September 18 ended with net cash outflows of about $0.7 million and DIP borrowings of about $58.4 million, within the facility's current maximum borrowing limit. Sales ran slightly ahead of forecast; receipts of about $14.2 million ran slightly behind, which the monitor puts down to the timing of collections; operating disbursements of about $13.6 million ran ahead, mainly on raw-material purchases and site operating costs. Borrowing-base collateral, which the report's appendix builds from receivables and inventory availability less a reserve, stood at about $23.8 million on September 18, leaving a borrowing-base shortfall of about $34.6 million, which the monitor says is within the shortfall the facility permits, per the Thirty-Second Report, Oct. 6, 2026, para. 101 and App. "A". The Thirty-First Report had put the collateral at about $26.1 million as of August 21, and the shortfall at about $32.4 million, per the Thirty-First Report of the Monitor, Sept. 2, 2026, para. 97(f).

The new forecast runs to November 27. It projects a net cash outflow of about $5.2 million over the ten weeks and borrowings under the interim facility of about $63.7 million at the end, with non-operating disbursements of about $5.2 million, chiefly interest on the pre-filing term loans and professional fees, per the Thirty-Second Report, Oct. 6, 2026, para. 107(a), (c). The forecast's own lines put interest on the pre-filing loans and the DIP at $1,773,000 and the professional fees at $3,400,000, per the Thirty-Second Report, Oct. 6, 2026, App. "B". The forecast filed with the Thirty-First Report on September 2, which ran eight weeks to October 16, had projected an outflow of about $0.9 million and borrowings of about $59.4 million at its end, per the Thirty-First Report, Sept. 2, 2026, para. 103(a).

The petitioners, the monitor reports, expect to need an increase in the permitted amount of financing before November 27. The presently permitted amount includes an over-advance "above and beyond the level of the current assets of the Petitioners," which on the new forecast "would increase by $3.6 million." The forecast, the monitor adds, "suggests that the Petitioners do not expect to have sufficient liquidity or ability to finance the continuation of the CCAA Proceedings without the Amended Interim Financing Facility," per the Thirty-Second Report, Oct. 6, 2026, paras. 113, 117.

The letter of October 8

On October 6 the monitor reported that the petitioners were negotiating that amendment, which contemplated moving the maturity to November 27 and raising the maximum facility limit to $65.0 million, per the Thirty-Second Report, Oct. 6, 2026, paras. 85(d), 114–115. Two days later it filed the signed letter. The limit had been modified to reflect "the highest amount indicated for the Interim Facility balance on the Revised Cash Flow Forecast"; the interim lenders' credit committee had approved the amendment, and the lenders and the monitor, on behalf of the petitioners, had executed it. It "remains subject to Court approval," per the Supplement to the Thirty-Second Report, Oct. 8, 2026, paras. 2–3.