Gumpert seeks sale after $3 million Elmira plant overrun triggers CCAA filing

S. Gumpert Co. of Canada Ltd., Gumpert RealCo Inc. and Gumpert Holding Inc. obtained CCAA protection on September 18, 2026, after a delayed and over-budget relocation of their manufacturing operations from Mississauga to Elmira, Ontario left the group without enough liquidity to continue operating in the ordinary course. The Ontario Superior Court of Justice initially granted a limited stay through September 22 while the companies, Farm Credit Canada and Royal Bank of Canada worked through a dispute over how the restructuring would be funded. Justice Dunphy described the dispute as a priority struggle between FCC, the fixed-asset lender, and RBC, the working-capital lender, with RBC concerned that new super-priority charges could consume its accounts receivable and inventory collateral.

At the continued hearing on September 22, Justice Dunphy approved a broader Initial Order, including FCC-backed DIP financing, after finding that the evidence did not show the proposed priority charges would unduly burden RBC's security. The Court extended the stay through September 28 and appointed Ernst & Young as monitor.

Gumpert is a 76-year-old Canadian manufacturer of bakery ingredients and specialty food products supplied to commercial bakeries, food manufacturers, retailers and distributors across North America. Its portfolio includes more than 250 products across its retail private-label, industrial, and bakery, institutional and food-service businesses. The group now operates from a 50,000 square-foot production facility and 4,500 square-foot storage facility in Elmira owned by RealCo. Gumpert has 21 salaried employees and 16 unionized employees represented by UFCW Local 175, along with approximately 40 to 45 temporary workers supplied by staffing agencies.

The restructuring follows a costly relocation intended to give Gumpert additional production capacity and eliminate rising rental costs at its former Mississauga facility. The Elmira build-out was originally budgeted at approximately $4.8 million, with the move planned for December 2025. Contractor delays, inflation, higher steel tariffs and energy costs pushed the move into July 2026. Regulatory and certification delays also prevented Gumpert from selling products manufactured at Elmira for a period while approvals remained outstanding. Ultimately, renovation costs came in 63% over budget, generating more than $3 million of additional costs and expenses. The extended timetable also required Gumpert to finance and operate both facilities simultaneously.

FCC declined a request for additional financing to cover the overruns. The shareholders advanced approximately $1.2 million in April 2026, while another $2.3 million was funded from Gumpert's operations and supplier payments were deferred. The group retained PricewaterhouseCoopers as financial adviser around June 16 to explore a sale, investment and other strategic alternatives, but those efforts did not produce a solution to its liquidity shortfall.

As of September 14, the Applicants owed FCC approximately $12.9 million in secured principal debt and RBC approximately $4.9 million, plus accrued interest and fees, while Gumpert had approximately $6.4 million of unsecured debt, including approximately $1.6 million owed to contractors that worked on the Elmira facility. RBC's $5 million revolving facility is a demand facility, and RBC delivered demands and BIA section 244 notices on September 17 requiring repayment by September 28. The preliminary creditor list subsequently recorded total secured claims of approximately $18.5 million and unsecured claims of approximately $6.9 million.

The Applicants are now seeking approval of a two-phase SISP covering some or all of their business and assets. Potential outcomes include a going-concern recapitalization or investment, a sale of all or part of the business and assets, or a combination of those transactions. Phase 1 would solicit non-binding letters of intent, followed by binding offers from qualifying bidders in Phase 2. The Monitor's latest proposed timetable starts the SISP on October 5, with Phase 1 bids due November 16, Phase 2 bids due December 8, a sale approval hearing targeted for December 22 and closing by January 8, 2027. Any qualifying final bid must provide for repayment of the DIP obligations and include a deposit of at least 10% of the purchase price or investment amount.

FCC is providing a non-revolving DIP facility of up to $2 million and advanced the initial $1.25 million on September 23. The Applicants are asking the Court to increase the DIP Lender's Charge to $2 million and the Administration Charge from $350,000 to $500,000, while leaving the Directors' Charge at $275,000. The updated forecast projects that the Applicants will require DIP borrowings of as much as $1.9 million through November before generating enough liquidity to begin repaying the facility. The DIP matures no later than January 31, 2027, absent an agreed extension or an earlier sale, CCAA plan, BIA conversion or uncured default.

The Applicants are also seeking to extend the stay through December 31. Operations have continued without significant disruption since the filing, with Gumpert continuing to purchase ingredients and raw materials, manufacture finished products and sell inventory as it enters its busy season.

Ernst & Young is the monitor and PricewaterhouseCoopers is financial adviser to the Applicants. Counsel includes Cassels Brock & Blackwell for the Applicants, with Reconstruct acting as conflict counsel, Bennett Jones for the monitor, Miller Thomson for FCC, and Fogler, Rubinoff for RBC.