Priority Over Produce: Canada’s New Deemed Trust for Fresh Fruit and Vegetable Suppliers Cuts into Secured Creditor Collateral

Steven Marmer, Tushara Weerasooriya and Jeffrey Rogers of McMillan look at Canada's new deemed trust protections for unpaid fresh fruit and vegetable suppliers under the Bankruptcy and Insolvency Act and Companies’ Creditors Arrangement Act, explaining how qualifying suppliers can claim priority over secured lenders in respect of produce and its proceeds, including commingled funds, while warning that the legislation could reduce available collateral, constrain lending and create uncertainty over processed produce, competing trust claims and the treatment of pre-filing suppliers in CCAA proceedings.

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