De Cloet Greenhouse wins Canadian recognition of BFG Supply Chapter 11

De Cloet Greenhouse Mfg. Ltd. obtained recognition of its US Chapter 11 proceeding as a foreign main proceeding on August 28, 2026, bringing the Ontario greenhouse manufacturer under the umbrella of a restructuring involving BFG Supply Co. LLC and 15 other affiliates.

De Cloet designs and manufactures made-to-order commercial greenhouse structures and systems from a facility it owns in Simcoe, Ontario. The business was acquired by the BFG Supply group in 2021 and has approximately 30 Canadian employees. It generated US$12.2 million of revenue in fiscal 2026, up from US$10.3 million in 2025 and US$9.1 million in 2024, and historically more than two-thirds of its customers have been in the United States. Although the Canadian business itself continued to grow, it is deeply integrated into the wider group: US affiliates provide strategic management, cash management, technology, insurance and sales support, while the majority of receivables from sales of De Cloet products have historically been collected through US entities.

The broader BFG Supply group entered Chapter 11 after more than two years of deteriorating operating performance and tightening liquidity. Turnover among its sales force drove customer attrition, reducing receivables and shrinking borrowing availability under its asset-based revolving facility. Suppliers then tightened trade credit, limiting the group’s ability to replenish inventory and driving further sales losses. Last-12-month revenue fell by approximately US$75 million, or nearly 15%, from approximately US$514 million in November 2024 to US$439 million in May 2026. The group was also carrying an elevated cost structure after failing to fully capture expected synergies from acquisitions made between 2021 and 2024. De Cloet was affected principally through its dependence on the US group for customers, cash management and working-capital funding.

The group entered the proceedings with approximately US$342.5 million outstanding under its principal secured credit facilities, consisting of approximately US$43.1 million under a revolving facility administered by ACF FinCo I LP and US$299.5 million under a term loan facility administered by Ares Capital Corporation. The facilities had already been amended in November 2025 to provide additional liquidity and extend maturities, including a US$45 million new term loan and US$15 million delayed-draw facility. ACF FinCo issued a notice of default on June 24 after alleged payment defaults and implemented default-rate interest on August 12. The group had approximately US$1.96 million of cash when it filed.

The Chapter 11 cases are designed around three concurrent realization tracks. SSG Advisors LLC, retained as investment banker on August 6, is running an expedited going-concern sale process targeted for completion in approximately 60 days. SB360 Capital Partners LLC and Tiger Capital Group LLC are handling an orderly monetization of inventory, receivables, equipment and other assets, while A&G Realty Partners LLC is advising on sales of owned real estate and lease interests, including the Simcoe property. The Canadian business is expected to continue operating while the group determines whether a going-concern transaction can be achieved, and liquidation activities are not expected to begin at De Cloet before that determination. A US hearing on bidding procedures is scheduled for September 16.

The restructuring is being funded through an asset-based DIP facility provided by the prepetition revolving lenders. Interim availability is US$22 million, including approximately US$8 million of new money, with the facility increasing to US$55 million upon final approval. The financing uses a creeping roll-up under which cash collateral reduces the prepetition revolving loans while creating corresponding DIP availability.

AlixPartners is the information officer and Reflect Advisors is the CRO. Counsel includes Cassels as Canadian counsel to De Cloet and the foreign representative and Osler for the information officer.

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