Upper Canada Growers Ltd. and UCG Land Inc., NOI

Upper Canada Growers Ltd. (“UCG”) and UCG Land Inc., which operate a nursery and orchard business in Southwestern Ontario (primarily in Harrow, ON), filed an NOI on January 17.

UCG’s primary activities are the acquisition and multiplication of disease-free rootstock for resale to fruit farmers in Canada and the US (which historically accounted for approximately 40% of sales), and the development and maintenance of fruit orchards (mostly apple) through the resale of the companies’ own rootstock products and third-party infrastructure for the purpose of harvesting and selling the fruit to the Ontario wholesale market (which historically accounted for approximately 60% of sales).

Once the orchards are developed by UCG, it is responsible for the annual maintenance costs of the properties, and rent (in the case of orchards purchased by external parties) but receives 100% of the benefit of fruit harvested from the properties.

UCG Land holds the land and buildings located in Harrow, ON that are used by UCG in its nursery and orchard business.

The primary cause of the companies’ financial difficulties was a sharp reduction in revenue during the 2024 fiscal year from UCG’s orchard division. The companies were unable to reach a binding agreement with the orchard partner they had selected and, therefore were unable to plant an orchard and make the corresponding estimated sales of approximately $7 million and profit of approximately $2.5 million.

The purpose of the NOI proceedings is to conduct a SISP. Senior secured creditor BNS, owed approximately $26 million in pre-filing debt, is providing a DIP loan.

BDO is the proposal trustee.

Counsel is Dickinson Wright for the companies, Fasken for BNS, and Aird & Berlis for the proposal trustee.