AMCO Farms Inc. and AMCO Produce Inc., CCAA

AMCO Farms Inc. and AMCO Produce Inc., Leamington, Ontario-based farming companies, obtained CCAA protection on August 22 listing approximately $58.3 million in liabilities, including approximately $26 million to RBC, $8 million to Pure Flavor Farms and $1 million to Agricultural Credit Corporation, all on a secured basis.

AMCO Farms, which employed approximately 100 employees, grows crops including tomatoes, peppers, cucumbers, and a variety of specialty produce from a complex of facilities in Leamington, Ontario. AMCO Produce, which historically marketed AMCO Farms’ products, has effectively ceased operations, although it holds assets that are used by AMCO Farms.

AMCO Farms has faced significant financial challenges in recent years due to various factors, including crop infestations, storm damage, and cash flow timing problems. In particular, AMCO Farms suffered a severe infestation in 2021 which resulted in a complete loss of the tomato harvest in 2021 and drastically decreased tomato yields in 2022 and 2023. Other incidences, including a windstorm in 2022, caused structural and crop losses that were not resolved for some time.

In April 2024, AMCO Farms satisfied certain debts owing to RBC with new funds from Pure Flavor. A condition of the refinancing was that AMCO Farms sell produce exclusively to Pure Flavor, which then pays for the produce net of certain deductions, which have been more significant than AMCO Farms anticipated and have had a material effect on the revenue earned by AMCO Farms under the agreement. AMCO Farms lacks the liquidity to continue operations in the ordinary course.