FÜM parent companies seek cross-border protection

RDFN FUM Natural Products Ltd. and its US subsidiary, RDFN FUM Natural Products Inc., filed Notices of Intention to Make a Proposal under section 50.4 of the BIA on February 4, 2026, commencing Division I proposal proceedings in the Court of King’s Bench of Alberta. Alvarez & Marsal Canada Inc. was appointed as proposal trustee. The Court subsequently granted a Foreign Representative Order on February 17, 2026, authorizing FUM Canada to seek recognition of the Canadian proceedings in the United States under Chapter 15

The companies develop and sell nicotine-free, smokeless, vaporless, non-electronic flavoured air devices marketed under the FÜM brand. Manufacturing occurs in China and Vietnam, with inventory primarily stored at a leased warehouse in Las Vegas, Nevada, and additional logistics arrangements in Canada and the United Kingdom. Approximately 80% of sales are generated through direct-to-consumer e-commerce, 10% via Amazon, and 10% through independent brick and mortar retailers. The companies’ head office, executive management, and core operational functions are located in Calgary, Alberta.

FUM Canada is the principal operating entity, holding nearly all assets and employing the majority of staff, while FUM US is a wholly-owned Delaware subsidiary primarily used to retain US employees and does not conduct independent operations. In total, the companies employ 16 individuals, 11 in Canada and 5 in the US, with one employee located in the UK.

As at August 31, 2025, consolidated assets included approximately $1,348,121 in cash, $3,382,900 in inventory, $268,272 in GST receivables, and $170,377 in prepaid expenses, while the creditor list for FUM Canada reflects total claims of nearly $7.9 million, including over $2 million owed to trade creditors.

The immediate catalyst for the filings was a settlement arising from a US trademark infringement action brought by BFL Metal Products Co., Ltd. under which the companies agreed to pay USD$2.5 million in two tranches but failed to do so. BFL advised that it intended to pursue enforcement steps, potentially including injunctive relief against US sales. Given that approximately 80% of revenues are generated in the United States and that key inventory is located at the Las Vegas warehouse, any injunction or enforcement action risked an immediate operational shutdown. The companies also reported tightening supplier terms and growing trade pressure amid constrained liquidity.

The Foreign Representative Order authorizes FUM Canada to seek Chapter 15 recognition to protect US operations and stay enforcement activity while a restructuring is pursued under Court supervision.

Counsel is McCarthy Tétrault LLP for the companies.