Canadian mega-farm Monette obtains creditor protection

Monette Farms Ltd. and affiliated entities, one of North America’s largest privately held farming groups, obtained protection under the Companies’ Creditors Arrangement Act in Alberta on April 21, 2026, after the maturity of an approximately $830 million senior secured lending facility triggered an urgent liquidity crunch just weeks before spring seeding.

Monette Farms is a privately owned agricultural enterprise with operations in Alberta, British Columbia, Saskatchewan, Manitoba, Arizona, Montana and Colorado. Since beginning as a family farm in 1912, the group has grown into one of the largest private farming operations in North America operating on owned and leased farmland land of over 500,000 acres, with operations spanning grain, produce, cattle ranching and seed processing. The business employs an average of 425 people, rising to roughly 600 during peak season.

Management said recent profitability was hit by poor crop prices, higher operating costs, spoilage and poor yields. At the same time, the business was carrying a substantial debt burden built during years of expansion through land acquisitions and diversification into produce, cattle ranching and seed processing. The company’s main credit agreement, a $950 million senior secured facility with a lender syndicate led by Bank of Nova Scotia, matured on April 15, 2026, with about $830 million outstanding. Once the facility matured, no further advances were available.

That timing was critical because large farming operations incur major upfront costs before harvest revenue is generated. Monette told the Court seeding expenses typically exceed $40 million annually and must be funded during a narrow spring window. Management told the Court that without immediate financing the group would be unable to buy fertilizer, seed and chemicals needed to plant more than 350,000 acres for the 2026 season. Missing the spring planting window would wipe out a year of revenue, reduce crop insurance coverage and diminish land values, according to the filing.

The company had been negotiating with lenders for months before the CCAA filing. Multiple events of default had already occurred under the senior facilities agreement. Since October 2024, the lender syndicate entered into two waiver and covenant agreements, followed by eight amendments and ultimately a forbearance arrangement while Monette pursued asset sales, operational changes and a broader restructuring.

Despite the liquidity crunch, Monette argued recent appraisals show its real property holdings exceed liabilities. The filing characterizes the business as overleveraged rather than asset-deficient, with substantial land value tied up in long-term assets that could not be quickly converted into working capital for spring operations.

The purpose of the CCAA proceedings is to stabilize operations and pursue a sale and investment solicitation process with a $90 million DIP loan provided by existing lenders led by BNS. Monette also intends to seek Chapter 15 recognition in the US.

FTI is the monitor. Counsel is Cassels for Monette Farms; McMillan (legal counsel) and PwC (financial advisor) for BNS as agent for the syndicate, Duncan Craig for Scotia Wealth, Gowling WLG for Farm Credit Canada, Fasken for BNS in relation to equipment leases, and Beaumont Church for Jane E. Grad and Soderglen Ranches.