Ontario forage seed firm Pickseed’s proposal to buy out the forage seed assets of Regina’s FarmPure Seeds will go to court in mid-November for approval, the latter firm’s trustee said Monday.
FarmPure trustee Naida Kornuta of the Saskatoon office of Meyers Norris Penny said she will submit the proposal for approval before Justice Allisen Rothery of Saskatchewan Court of Queen’s Bench in Saskatoon on Nov. 17.
Pickseed in June announced a deal to buy FarmPure Seeds’ forage and turf seed plant at Nipawin, Sask., about 140 km east of Prince Albert.
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The deal involves Pickseed assuming the secured status of FarmPure’s two main secured creditors, the Royal Bank and Farm Credit Canada. That deal, pending Rothery’s approval, would see RBC and FCC get back 85 per cent of the $4.1 million owed them.
However, Kornuta said previously, as Pickseed discovered the extent of FarmPure’s indebtedness during due diligence, it opted also to set up a $450,000 fund to provide some money to FarmPure’s unsecured creditors.
Representatives from that group of creditors voted at a meeting Thursday in Saskatoon to accept Pickseed’s offer. In all, MNP’s preliminary list of creditors includes almost 500 names of seed growers, agribusinesses, ag input and supply firms, other service companies and public and private agencies, mostly on the Prairies, but also across Canada and the U.S. and elsewhere.
Those unsecured creditors’ preliminary claims are worth an estimated total of about $7.87 million. If all listed creditors are able to come forward with proof of their claims, their dividends of Pickseed’s $450,000 fund would be worth about six cents for each dollar owed by FarmPure, before MNP’s trustee fees are deducted.
Once Kornuta receives court approval, creditors will receive notice of the possible payout and have about 30 days from the date of court approval to provide proof of claims. That deadline would be around Dec. 21, Kornuta said.
The deadline could have been moved to a later date, but MNP would rather ensure FarmPure’s unsecured creditors get back at least this small fraction of what’s owed and “we don’t want to hold onto this money any longer than we have to,” Kornuta said.
