AgraCity wins CCAA protection after court splits off Genesis entities amid parallel BDC receivership push

AgraCity Crop & Nutrition Ltd. and 11 related companies obtained CCAA protection on December 1 in Saskatoon after Justice Smith granted an Initial Order authorizing interim financing, a short initial stay, and a Court-supervised restructuring process. The Court declined at this stage to allow the Genesis grain and fertilizer partnerships to participate in the filing following a November 27 fiat in which the Court held that the Genesis entities would remain within the scope of a separate BDC receivership application.

AgraCity operates a national agricultural platform supplying crop protection products, specialty fertilizers, and related inputs to more than 2,000 farmers. Its integrated structure includes NewAgco for product registrations, Viking for wholesale distribution, and MPower Logistics for freight operations. The Genesis partnerships operate a grain and fertilizer distribution centre in Belle Plaine, with AgraCity serving as their anchor customer.

The companies’ liquidity crisis accelerated through 2025 after supplier credit tightened and international vendors demanded prepayment, leaving AgraCity unable to deliver roughly $30 million of prepaid product. More than 1,200 farmers had paid approximately $32.7 million for inventory that could not be shipped without new capital. Cash strain deepened as employee source deductions totaling about $948,800 went unpaid after June payroll cycles, net pay of $99,300 became overdue on November 25, and sales collapsed following the June cancellation announcement. The business also contended with shareholder litigation, failed returns on Genesis related investments, tariff-related pressures, and escalating demands from unsecured creditors.

AgraCity sought to include the Genesis partnerships within the CCAA to preserve enterprise value and enhance its ability to secure interim financing. BDC opposed the move, arguing that Genesis was already the subject of a receivership application returnable November 28, supported by real property valued with equity and subject to an $11 million mortgage securing approximately $7.5 million of indebtedness. BDC contended that including Genesis in the CCAA would shift recoveries, elevate interim lender charges ahead of BDC, and complicate what it viewed as a more direct real estate realization.

Justice Smith’s fiat left the issue open procedurally. While the Court required AgraCity to remove the Genesis debtors from the draft CCAA order, the decision did not prevent AgraCity from seeking further relief later. The Initial Order therefore proceeded with a reduced group on December 1, restoring stability for the core operating entities and preserving the ability to advance a restructuring strategy while the BDC receivership application for the Genesis entities continued on a parallel track.

Under the Initial Order, Ernst & Young Inc. was appointed Monitor. The Court approved interim financing from 2011329 Alberta Ltd. of up to $700,000 for the initial period, secured by an interim lender’s charge in the same amount, together with a $500,000 administration charge and a $250,000 D&O charge. The companies may pay wages, essential suppliers, and certain reconciliation obligations with Monitor approval, while continuing with the reconciliation protocol to match cancelled farmer orders with substitute product.

A comeback hearing is scheduled on or before December 11, where AgraCity intends to seek expanded interim financing of up to $4.2 million and an increase in the administration charge to $1 million. Management and the Monitor expect to pursue a formal sale and investment solicitation process, potentially including a stalking horse structure, to unlock value across the integrated CPP platform. The Monitor’s report highlights consolidated assets of approximately $96.5 million and liabilities of roughly $90.8 million based on recent financial statements, although the working capital deficit of $54.1 million underscores the pressures driving the filing.

Miller Thomson represents the companies, Gowling WLG acts for BDC, and MLT Aikins is on for the interim lender.