VANCOUVER — Two weeks after ÎÚÑ»´«Ã½’s fruit growers co-operative filed for creditor protection over about $58 million in debt, it has been ordered by the ÎÚÑ»´«Ã½ Supreme Court to sell its assets.
A representative of Okanagan’s apple growers said it was “disappointing” the province didn’t step up with funding to help the producers regroup and keep the ÎÚÑ»´«Ã½ Fruits Co-operative alive.
“The most disappointing thing was the provincial government took no stand on the matter,” Amarjit Lalli said. “Not to have a position on this says a lot about the state of agriculture in ÎÚÑ»´«Ã½”
He said he wanted the province to “get the bank off our back and back up our loan for a couple of years” so the growers could run the co-operative. He said it has $109 million in assets and debt of $53 million.
“We have more than enough equity there” to give growers time to reorganize and streamline the company, he said.
In its petition two weeks ago seeking creditor protection, the co-op, which provides storage and packing services for growers, cited several problems including declining crops, increased competition from private fruit packers and disputes with members who disagreed over plans to sell off its real estate holdings, delaying divestment.
The co-op has said stone fruit crops, such as plums, peaches and cherries, were damaged by “unusually severe” cold this year, further hurting the co-op.
That shortage has affected the availability and price of those fruits. For instance, plums were being sold for $5.99 a pound last week at Granville Island Market.
Lalli, a former co-op director, said apple growers had a “bumper crop” this year and needed the co-op to get their fruit to market or “it will rot on the trees.” He alleged the board didn’t properly manage the 88-year-old co-op before declaring it was going out of business.
He said the province’s suggestion for growers to use private packers isn’t viable. They lack capacity to accept all the apples produced in the province and particularly lack the cold storage to keep them for months, he said.
Consumers can therefore expect apple prices to drop this fall as apples with limited shelf life flood the market, he said. But he also said there will not be a shortage or higher prices months later when ÎÚÑ»´«Ã½ apples in storage are usually released for sale because apples can be imported.
The court hearing on Monday to allow the sale of the co-operative’s assets heard that there have been expressions of interest from buyers for some of its plants, according to Kibben Jackson, lawyer for the creditor protection monitor, Alvarez and Marsal Holdings. “They can make an offer for all of the assets or for some of the assets.
The sale for a plant in Vonn for $22 million and is expected to be finalized this week, he said.
He said bidding deadlines for assets are to be as early as in three weeks and are scheduled to close by November, because of the interest in properties and the need to provide processing and storage facilities for this harvest season. But he said there is room for flexibility on the dates and the possibility assets sales could be delayed for this season to allow buyers more time and for the facilities leased to growers so they can pack and store this year’s harvest.
A flexible restructuring plan was welcomed by the lawyer for the apple growers, Mary Buttery.
“Flexibility of the sales process is very important for our clients,” she said, noting that without the ability to market their fruit, they could lose half their crops. “It’s the apple harvest that’s most at risk.”
Justice Miriam Gropper acknowledged the growers’ right to be heard during the restructuring, saying “their participation is welcome. They have a financial and emotion stake in the co-op and it’s appropriate they are represented in this procedure.”
ÎÚÑ»´«Ã½’ Agriculture Minister Pam Alexis and Premier David Eby earlier this month announced the province would provide $15 million in claims for crop losses and $5 million for “tree fruit climate resiliency program.”
Eby two weeks ago said the fate of the co-op was in a judge’s hands. He said the province would monitor the co-op’s creditor protection process and see what could be done to ensure “key assets are protected” or if services that it used to provide might be able to continue through the proceedings.
“The co-op has had some big challenges. They had some governance issues that the province tried to support with some funding, they’re facing some significant debt obviously,” he said.
The co-op’s petition said its bank, CIBC, supports the co-op’s restructuring under the Companies’ Creditors Arrangement Act. The law allows insolvent firms with more than $5 million in debt to restructure operations and temporarily stave off collection efforts.”
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