Iovate Health’s NOI proceedings continued under the CCAA as Walmart freeze and Orgain enforcement squeeze liquidity

Iovate Health Sciences secured the continuation of its NOI proceedings under the CCAA on October 31 after Justice Dietrich granted an Initial Order extending broad stay protection to December 12, confirming KSV’s appointment as Monitor, and preserving all steps taken during the BIA proposal process. The Court accepted that the transition was necessary to stabilize the group amid an acute liquidity crisis caused by Walmart’s prolonged withholding of receivables and Orgain’s aggressive efforts to enforce a US$12.5 million judgment.

The Iovate Group spans Canadian, US, Australian, and Hong Kong entities and operates a large performance nutrition business built around the MuscleTech and Hydroxycut brands. Three of its companies, Iovate International, Iovate USA, and Northern Innovations, entered NOI proceedings on September 5. The filings followed a series of operational, financial, and litigation setbacks, including an unfavourable third-party logistics transition in the US, rising costs, and tightening vendor terms.

Liquidity deteriorated rapidly in mid-2025 when Orgain enforced its amended California judgment by obtaining a writ of garnishment in Arkansas. Walmart, Iovate’s largest customer, was served on June 27 and froze payments from August 4 onward. Receipts from Walmart had averaged about $5.8 million per month, and the freeze left the group unable to access approximately $21.5 million as of October 3, including $14.7 million already due. Walmart later released $3.4 million on October 8, but continues to retain roughly $13.7 million pending resolution of the judgment, leaving the group with insufficient liquidity to operate normally.

Parallel pressure came from Iovate’s lenders under a US$115.4 million syndicated credit agreement. After the Arkansas Court declined to quash the writ on August 25, the lenders issued demand letters on August 27 and delivered notices of intention to enforce security, citing prejudice to their collateral and signalling their readiness to commence creditor-driven CCAA proceedings if Iovate did not act.

The Court accepted that the CCAA was the appropriate forum to preserve value, reduce the cost burden of repeated NOI stay extensions, and permit an integrated restructuring of the full enterprise. The Initial Order continues all earlier relief from the September 9, October 3, and October 17 orders, extends the stay of proceedings to various non-applicant affiliates due to the close operational integration of the group, and maintains the charges approved in the NOI proceedings.

The restructuring will be overseen by KSV, now formally appointed as Monitor, who is now conducting a Court-approved SISP. Counsel is Chaitons for Iovate, Davies for Orgain, Osler for the Monitor, Blakes for RBC, Cassels for Valentine Enterprises, and Bennett Jones for Xiwang Foodstuffs.