Quebec Court appoints Deloitte receiver of DMB Food Distribution

DMB Food Distribution ULC, a Quebec-based food distributor, was placed into receivership on June 5, 2026, on application by Canadian Imperial Bank of Commerce, owed approximately $35.27 million.

DMB distributed, transported, represented and stored food products, including frozen products, across Quebec and Eastern Ontario. The company recently employed more than 200 people at facilities in Mascouche, Saint-Augustin-de-Desmaures and Rimouski. Novic Investments LLC is its majority shareholder, while Martin Bélanger is its president and ultimate beneficial owner.

The company owns four properties - one in Mascouche, one in Saint-Augustin-de-Desmaures and two in Rimouski. Their net book value was approximately $21.8 million as of March 31, 2026. Appraisals obtained in fall 2023 valued the properties at approximately $25.8 million, although the receiver said repairs required at the Mascouche property are expected to reduce its market value.

DMB’s internal financial statements recorded total assets of approximately $49.41 million and liabilities of approximately $58.06 million as of March 31. Its assets included approximately $4.59 million of customer receivables, $3.31 million of other receivables, $1.9 million of inventory, $21.8 million of land and buildings, and $9.48 million of intangible assets.

However, inventory had declined to approximately $700,000 by May 15 and included perishable products requiring frozen or refrigerated storage. Customer receivables had fallen to approximately $2.7 million by May 29, and DMB advised that more than 50% could be subject to set-off. Most of the company’s rolling stock was leased and was returned to the lessors after operations stopped.

DMB’s revenue fell from approximately $185.93 million in the financial year ended March 31, 2024, to approximately $166.66 million in 2025 and $114.41 million in 2026. The company earned approximately $2.47 million in 2024 before recording net losses of approximately $4.17 million in 2025 and $7.22 million in 2026.

CIBC made several credit facilities available under a November 2023 credit agreement, including an operating facility originally set at $12.5 million, later reduced to $5.5 million, a $9.19 million acquisition demand loan, a $23.56 million real estate demand loan and a US$2 million derivatives facility.

The bank first advised DMB in August 2025 that it had breached its financial covenants and requested additional funding be injected into the company. Bélanger declined to provide the requested funding and advised that overdue supplier accounts were accumulating.

CIBC delivered a further default notice on October 27, citing breaches of financial ratios and financial reporting obligations. It reduced the operating facility to $5.5 million and required the acquisition and real estate loans to be repaid by January 31, 2026.

Bélanger subsequently agreed to make two additional funding injections of $500,000 each. He paid a total of $500,000 through payments made on December 5 and December 22, but did not make a further payment scheduled for January 12 or sign the proposed agreement documenting the arrangement.

The demand loans were not repaid by January 31. CIBC also alleged that DMB failed to deliver required compliance certificates, breached its fixed-charge coverage and debt-to-EBITDA covenants, exceeded its borrowing base and was insolvent.

DMB, Novic and CIBC entered into a forbearance agreement on April 8 under which DMB and Novic acknowledged defaults and debt of approximately $35.98 million. CIBC initially agreed to refrain from enforcement until the earlier of May 1 or a further default. The parties later extended the forbearance period to May 22.

Deloitte Corporate Finance conducted a sale and investment solicitation process from April 14 to May 15. It contacted 156 potential investors and purchasers, 34 of which signed confidentiality agreements and received access to financial and operational information. Non-binding letters of intent were due May 11.

The expressions of interest covered selected assets, included significant financing or due diligence conditions and did not support continued operations. Deloitte said the process failed to generate a satisfactory or viable transaction.

DMB announced on May 14 that it would cease operations effective May 15. It terminated nearly all employees at that time and dismissed its remaining active employees on May 29. As of May 27, the company estimated that it owed approximately $1.3 million in termination and accrued vacation entitlements. It estimated its trade debt at approximately $10 million as of June 2.

Deloitte said the company had generally stopped paying suppliers as obligations came due and could not pay all amounts owed to employees when their employment ended. With no employees remaining to administer the assets, Deloitte recommended a court-supervised realization of the properties, inventory, equipment and receivables.

Deloitte is the receiver. Counsel is McCarthy Tétrault for CIBC.