Canadoil Forge placed into receivership

The Quebec Superior Court (Commercial Division) has appointed FTI Consulting Canada Inc. as receiver over Canadoil Forge Ltd., granting Fiera Private Debt Fund VI L.P. and Fiera Private Debt Fund VII L.P. a renewed receivership application under section 243 of the Bankruptcy and Insolvency Act after previously refusing similar relief in late September.

In his October 2025 reasons, Justice Luc Morin concluded that the new record remedied procedural and evidentiary gaps identified in Fiera’s first motion—most notably by introducing a concrete Sale and Investment Solicitation Process (SISP) designed to close a transaction by year-end and avoid the cost of winterizing Canadoil’s industrial plant in Bécancour, Québec.

Founded in 1982, Canadoil Forge is a premier manufacturer of butt-weld pipe fittings. Following a prolonged downturn in steel markets and energy-sector investment, the company suffered liquidity shortfalls, covenant breaches, and payment arrears under its secured loan facilities. According to Fiera’s filing, as of September 18, 2025, Canadoil owed $19.9 million to Fund VI and $9.9 million to Fund VII, totalling $29.8 million, including principal, accrued interest, and out-of-pocket costs.

While the Court was satisfied that receivership was now “justified and necessary to preserve value,” it rejected Fiera’s request for $650,000 in interim financing, holding that the proposed loan primarily protected Fiera’s own position rather than enhancing recoveries for other stakeholders. The Court also rebuked the lenders’ stance on unpaid employee wages of approximately $865,000—a “wait-and-see” approach pending asset sales and the federal Wage Earner Protection Program Act (WEPPA), finding this approach “simply unacceptable” and writing that WEPPA is “a social safety-net measure, not a primary tool for financial institutions to mitigate their losses.”

Under the order, FTI Consulting Canada Inc. continues as full receiver with authority to take possession of the Bécancour plant, stabilize operations, and administer the SISP under Court oversight. Counsel is McCarthy Tétrault for RBC, Scheib Legal for the former director of the debtors, Blakes for Fiera, and Norton Rose Fulbright for FTI as receiver.