Picture Butte Feeder Cooperative, Restructuring Officer Order

Picture Butte Feeder Cooperative (“PBFC”), Alberta's largest feeder cooperative with nearly 230 members, applied for and obtained an order appointing a restructuring officer (with the powers of a receiver-manager) under section 299(1) of the Alberta Cooperatives Act and section 13(2) of the Alberta Judicature Act.

Similar to other feeder associations, PBFC assists members in acquiring livestock by providing easy access to low interest, leveraged financing backed by a government guarantee as part of the Feeder Associations Loan Guarantee Program (the “FALG Program”).

On January 27, the Inspection and Investigation Section of Alberta Agriculture and Irrigation (the “Ministry”) issued an order under section 6(1) of the Alberta Feeder Association Guarantee Act that prohibited PBFC from making any further advances to members under the FALG Program. As a result, PBFC’s members are currently unable to access a key source of financing that is critical to many members’ operations and livelihoods. In addition, all members of the cooperative’s board, the supervisor and administrator have resigned, leaving PBFC unable to meet its operational needs.

The cooperative currently owes about $280 million to a syndicate of lenders including BMO as agent, approximately the same as the amount PBFC lent to its members under the FALG Program. The purpose of the proceedings is to address the demands of the ministerial order and the concerns raised by the Ministry so that the cooperative can continue to serve its members.

A&M is the restructuring officer.

Counsel is Cassels for the cooperative, Torys for the restructuring officer, Gowling WLG and Blakes each for a director, and Miller Thomson for BMO.