In court documents, receiver PricewaterhouseCoopers said that as of April 29 it had entered an asset sale purchase agreement with a Manitoba numbered company. It has requested court approval for the sale of the plant and property.

The receiver asked the court to seal documents related to the value of the agreement until the sale was closed.

Merit Functional Foods Corp was a joint venture between Vancouver plant-based protein firm Burcon NutraScience, agri-food giant Bunge and former executives of Hemp Oil Canada.

It ran into financial trouble in 2022 and entered receivership in early 2023. At the time the company owed about $58.5 million to Export Development Canada and about $36.5 million to Farm Credit Canada.

Burcon NutraScience in April 2023 said it and an unnamed partner had put in a bid for the Winnipeg plant and hoped to restart operations.

Court documents show the receiver got an offer on the site in the summer of 2023 but wasn’t able to reach a purchase agreement.

“Several discussions and negotiations took place between the Receiver and other interested parties; however, none resulted in a successful transaction,” the documents say.

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He delivered the grain before both companies declared bankruptcy, leaving him short C$165,000 they owed. Now Prybylski has no money to replace his old tractor.

Hundreds of Canadian farmers have received delayed payments for their crops or not been paid at all, as a growing number of grain-buying firms declare bankruptcy amid drought and low commodity prices, according to interviews with dozens of farmers, a government agency, and a review of bankruptcy documents.

Farmers are discovering they are not necessarily protected from the failures, revealing holes in Canada’s farm safety net.

The bankruptcies are adding to farmer troubles in Canada, the world’s top canola and No. 3 wheat producer, while they also brace for tariffs from the United States.

Prybylski, who farms in Willowbrook, Saskatchewan, is relying on a line of credit to cover the shortfall until he harvests the next crop in autumn.

“Where do we cut our expenses? Or how do we get more revenues to do the things we need to do?” Prybylski asked. As planting season approaches, he needs to buy fertilizer, seed and fuel.

Farmers can sell crops to companies that operate storage terminals, merchants and other farmers who fatten livestock. They are generally paid a few weeks after they deliver grain and have long incurred most of their costs, a problem for those who deliver to a buyer that goes broke before paying.

Canadian farmers have some financial protection through the federal government-run Canadian Grain Commission, which regulates crop transactions, oversees grain company failures and at times covers some of what farmers are owed by failed companies. The CGC pays compensation from bonds and other security that licensed companies are required to post.

The CGC managed four company failures in 2024, compared to zero or one most years, and the most since at least 2001, according to government data.

But some unlicensed companies have also failed, suggesting the troubles may be broader.

Farmer Christi Friesen said grain buyer Agfinity tried to delay paying her for three loads of peas, though it ultimately paid the C$75,000 it owed plus interest.

Agfinity declared bankruptcy on November 25.

“I needed to fight,” said Friesen, who farms 5,000 acres (2,023 hectares) of cropland in Alberta’s Peace region. “I kept being a pain in the ass.”

Discovering that some failing companies, such as Agfinity, are unlicensed, has alarmed farmers, as has finding out that some licensed companies are not fully insured.

The situation “has fully exposed that we are not secure,” said southern Saskatchewan farmer Cherilyn Jolly-Nagel.

Companies directly buying crops from farmers must, by law, be licensed with the CGC, with few exceptions. For legal enforcement, the agency must complain to the Public Prosecution Service of Canada, which then decides whether to take action.

The CGC has not made such a complaint in at least seven years, said spokesperson Christianne Hacault.

Other flaws in farmer protections are the CGC’s requirement that farmers report non-payment within 90 days, and licensed firms who fail to post adequate security, farmers say.

The CGC is holding consultations with farmers about its protection system, Hacault said.

“We know there are gaps.”

The federal agriculture minister’s office, which oversees the CGC, did not respond to a request for comment.

Agfinity owner Joseph Billett told Reuters that reduced sales due to smaller crops, farmers’ reluctance to sell at low prices and competition from imports of U.S. corn to feed cattle pushed the company over the edge.

“These three factors made profitability very challenging, and for us, impossible, these past few years,” Billett said.

Dust bowl

Farmers in the western half of Canada’s Prairies have grown stunted crops for four years due to dry conditions. In some places, farmers say they are facing the worst prolonged drought since the 1930s Dust Bowl.

Crop insurance claims between 2021 and 2024 shot up seven-fold compared to the previous four-year period due to drought-damaged crops, according to agencies in Alberta and Saskatchewan.

Numerous small grain companies, brokers and merchants are among Canadian crop buyers, unlike some countries that are dominated by global players.

In the United States, farmers also had low prices to deal with, but their crops had better growing conditions, allowing them to salvage revenue. Some states regulate grain companies so that farmers have protection against non-payment, but the situation varies state-to-state.

In Canada, some companies have avoided bankruptcy, but are still struggling.

Farmer-built North West Terminal in Unity, Saskatchewan, said in September it would stop buying grain at least through July to avoid losses.

In an interview, NWT CEO Jason Skinner said intense competition to buy reduced crops hit his company, though it has avoided bankruptcy.

“We’ve seen some significant headwinds and . . . margins that aren’t covering costs,” Skinner said.

In May, LSM Grain picked up two truckloads of red lentils, worth about C$50,000, from Saskatchewan farmer Kelly Arthurs, but did not pay him. The CGC revoked LSM’s license in July.

The company could not be reached for comment.

Arthurs complained to the CGC within 90 days of delivering his grain and was eventually compensated.

But 17 farmers owed a combined $842,000 by LSM waited too long and will not qualify for compensation, according to a bankruptcy document and the CGC. Prybylski is one of them.

Global Foods and Ingredients also went broke owing Prybylski money in the spring. He submitted his complaint in time to qualify for coverage, but only received 75 per cent of what he was owed because Global had posted insufficient security.

A law firm representing Global Foods did not respond to a request for comment.

Arthurs said he felt so much stress from months of fighting to get paid that he may quit farming.

“It’s time to retire.”

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The company owes $5.067 million to the 181 creditors listed in bankruptcy filings released Nov. 26. Many of the creditors are farmers who sold grain through Agfinity but were never paid. Employees out their last paycheques are also listed in the filing. Listed assets totalled $162,593.

MNP Ltd. has been appointed as the Licensed Insolvency Trustee. Creditors can contact MNP to complete a proof of claim prior to a meeting of creditors scheduled to take place via teleconference on Dec. 16. The meeting is a formality in the bankruptcy process, with the purpose of affirming the trustee’s appointment, appointing inspectors to the bankrupt estate and providing direction to the trustee.

While Agfinity had once operated as a typical grain broker — matching buyers and sellers through broker notes but never handling any money directly aside from their fee — in recent years the company began using grain purchase contracts where they took the payment from the buyer and paid the seller later. In a July blog post, Agfinity’s president Joseph Billett said the newer contracts were necessary to support cash flow due to narrow margins. However, the company was unable to generate enough trade volumes to match costs.

In a draft letter to be sent to creditors provided by Billett, he acknowledged mistakes made over the past year and offered “sincerest apologies for the pain and stress this situation has caused.”

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Agfinity, the Stony Plain, Alta. grain broker that Kitt sold his canola through, laid off employees and started the process of declaring bankruptcy in mid-October, according to former employees. The Agfinity website has switched to maintenance mode, its social media accounts are shuttered and calls go straight to voicemail.

“We were told (on Oct. 18) that they would be filing for bankruptcy that next Monday (Oct. 21) and that as employees we could expect to hear from a trustee who was going to give us paperwork to fill out to ensure we were paid for our last few weeks of work,” said Coco Dougherty, Agfinity’s former vice president of marketing and communications. However, Dougherty and other former staff contacted for this article had not received their final paycheques as of mid-November and were still waiting to be contacted by the bankruptcy trustee.

The company has not yet officially filed for bankruptcy, but “it should be any day now,” said Agfinity president Joseph Billett via email Nov. 19. In a draft letter to be sent to farmers owed money by the company, Billett acknowledged mistakes made over the past year and offered “sincerest apologies for the pain and stress this situation has caused.”

Kitt was out about $20,000 for his heated canola. Christi Friesen, a northern Alberta grain farmer who has been active on social media connecting farmers and shedding light on Agfinity’s non-payment issues said there are many others in the same position.

Graham Letts bought grain through Agfinity on several occasions over the years for his Westlock, Alta. livestock operation and appreciated the ease of the company’s online system. However, he noticed a change in recent years. While Agfinity had once operated as a typical grain broker — matching buyers and sellers through broker notes but never handling any money directly aside from their fee — the company started using new grain purchase contracts where they took the payment from the buyer and paid the seller at a later date. Letts recounted a situation where he bought grain and paid Agfinity the full amount, only to later hear that the farmer who made the delivery was never paid.

In a July blog post, Billett said the grain purchase contracts were necessary to support cash flow due to narrow margins. However, the company was unable to generate enough trade volumes to match costs. At the time Billett acknowledged Agfinity’s late payments and tarnished reputation, while also saying that grain purchase contracts would remain a necessary part of the business as it worked to overcome its financial difficulties.

With Agfinity headed to bankruptcy, it’s uncertain when farmers still owed money will be paid, if ever, especially as the company was never licensed through the Canadian Grain Commission.

Dougherty and two other former employees are working at launching a new brokerage firm, Grain Gateway Canada, but have run into some strangeness online.

Social media accounts and a website claiming to be Grain Gateway Canada briefly sprung up in early November before disappearing. A test version of the Agfinity buyers’ hub website was altered to show a Grain Gateway Canada logo and appeared to link the two companies. There were also reports of phone calls to farmers from people claiming to be with the new company.

Dougherty acknowledged Grain Gateway Canada would likely “wear the scarlet letter” of their past association with Agfinity but was adamant that there was no relationship between the companies. She was unsure why someone would be impersonating her fledgling company or attempting to link it to Agfinity but had documentation to back up Grain Gateway Canada’s independence.

“We feel that somebody is going out of their way to make it look like we’re doing something corrupt … and it’s just so disheartening,” said Dougherty, adding “it’s creating chaos, and panic and mistruths.”

—Updated Nov. 19 to include comments from Agfinity president Joseph Billet, updates throughout.

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The company, owned by private equity firm Paine Schwartz Partners, has about $679 million in debt, and plans to sell its business in bankruptcy, according to bankruptcy court documents (all figures US$).

Prima grows peaches, nectarines, plums and apricots on its 18,000 acres of farmland in California’s San Joaquin Valley.

Prima has struggled under its high debt load, and it has also faced significant setbacks since 2020, including a salmonella outbreak that led to a recall of peaches in the U.S. and the 2020 Creek Fire in California, which damaged orchards and reduced crop yields and quality.

Prima will try to find a buyer for its assets by November, hoping to avoid an upcoming cash crunch between its profitable harvest seasons. Prima has about $26 million in cash, and it could run out of money by January 2024 if it doesn’t find a buyer before next year’s harvest season begins in May, according to court documents.

If no buyer emerges, Prima will pivot to a debt restructuring or a liquidation of its business, according to court documents.

The company was formed from a 2019 merger of Gerawan Farming Inc. and Wawona Packing Company. The company had over $300 million in sales revenue in 2022, with 60 per cent of that coming from sale of peaches, according to court documents.

— Dietrich Knauth reports on U.S. bankruptcy and product liability law for Reuters from New York City.

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The CGC on Tuesday announced the results of its review of producer claims in the wake of last July’s bankruptcy filing by Pipeline Foods, whose footprint in Canada included two small southern Saskatchewan grain elevators and a Winnipeg office.

The commission’s review found 49 eligible claims for unpaid deliveries, for which the CGC said Tuesday it will pay out compensation of over $2.2 million from the security posted by Pipeline’s Canadian subsidiary.

Pipeline filed for bankruptcy in Delaware last July 8 and suspended its purchases of grain from Canadian growers effective July 9. It sought another petition July 12 to extend creditor protection to cover its subsidiaries, including the Canadian business.

The company said in a release in July that it decided a Chapter 11 bankruptcy reorganization “provides the best means to support its operations and to continue the process of selling the company in order to preserve company value and jobs.”

Pipeline said it “regret(s) the hardship this may present to our creditors, including farmers, producers and vendors and we hope we can work through issues together, in due time, with the least amount of disruption.”

Pipeline had bought its two Saskatchewan elevators in 2017: the former Mainline Terminal facility at Wapella, about 130 km south of Yorkton, and the Gull Lake Grain Corp. site at Gull Lake, about 50 km southwest of Swift Current. The elevators have capacity to handle 3,500 and 4,000 tonnes of grain respectively.

The company had just got rolling earlier in 2017 with backing from players including New York agribusiness investment firm Amerra Capital Management. The new company had planned to store, screen and blend organic and non-GMO grains including barley, corn, rye, flax, lentils, oats, peas, soybeans and wheat at the two elevators.

Pipeline, which had also set up a South American regional office in Buenos Aires, said in 2017 it was “pursuing opportunities” to invest $300 million to $500 million over the next three to five years “to build a better, more sustainable supply chain in agriculture.”

As a condition of licensing, CGC-licensed grain companies in Canada must tender security for outstanding grain liabilities to producers, in the form of a bond, letter of credit, letter of guarantee or payables insurance.

If a CGC-licensed company doesn’t meet its payment obligations, the commission then uses that posted security to compensate eligible producers. — Glacier FarmMedia Network

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Judge Shawn Smith of Court of Queen’s Bench in Saskatoon on Friday approved the sale of Morris to a numbered-company arm of Superior Farms Solutions Ltd. (SFSL), the operator of Rite Way Manufacturing. The numbered company will operate as “Morris Equipment.”

The deal will see Morris’ Saskatoon head office, its Minnedosa, Man. manufacturing plant and its patents and related intellectual property go to Rite Way. The deal’s financial terms and dollar amounts are redacted in court documents posted online.

Rite Way and Morris’ court-appointed monitor have agreed to target a closing date of Dec. 31 for the deal.

In its report to the court on Dec. 11, Alvarez and Marsal, the monitor for Morris, described the deal as “the culmination of all of the efforts and resources expended by Morris Group and its stakeholders over the course of the last 12 months.”

If approved and completed, the monitor said, the deal “will preserve the core components of the 90-year-old farm equipment manufacturing enterprise carried on by Morris Group (and its predecessors) continuously from the 1920s until the present date.”

However, in its “exhaustive sale process” to find an investor or buyer for Morris, “no party had expressed to the monitor an intention to purchase, acquire or operate the Yorkton plant,” the monitor said.

The deal as reached means the Yorkton plant will close down when the deal is completed, officially putting the plant’s 20 remaining employees and another 50 laid-off employees out of work.

Without a letter of understanding, as was reached earlier this year between the company and the Yorkton plant’s union, the plant’s collective bargaining agreement would have required any buyer to “take on a degree of labour relations risk for their existing business operations” even if it didn’t buy the Yorkton facility.

The Yorkton plant’s workers, members of the Retail, Wholesale and Department Store Union Local 955, approved the terms of the letter in August in a vote at an open-air meeting at a Yorkton baseball diamond.

The exact contents of the letter were kept confidential in the monitor’s Dec. 11 report. It calls for creation of a fund to manage payments to Yorkton plant employees “whose employment is anticipated to be terminated.”

The importance of the letter of understanding to the deal “on which the survival of this business enterprise is based cannot be overstated,” Alvarez and Marsal wrote in its report.

BMO, which as Morris’ principal secured creditor is owed about $25 million, has said it supports the proposed sale but also now plans to file for an application-for-bankruptcy order against Morris Group, likely to be heard in court next month.

A bankruptcy would see the employment terminated for Morris’ Saskatoon and Minnedosa staff but, as the monitor’s report puts it, “reasonable prospects exist” for those staff to get employment with the new owner.

Operating in creditor protection since January this year, Morris’ businesses include manufacturing air carts, drills, seeders, harrow bars and bale carriers.

Founded in 1929 as Morris Rod-Weeder, the company was owned by the Morris family up until 2007, when it was sold to an ownership group led by then-CEO Casey Davis. Another ownership group, led by Ben Voss replacing Davis as CEO, took majority control in 2017.

Morris has operated a plant at Yorkton since 1949 and at Minnedosa since 1960, and went on to expand both plants several times. A company-owned dealership and service centre at Virden, Man. closed earlier this year.

Rite Way, founded by Regina machine shop owner Les Hulicsko, is today headquartered in Regina but has its main plant at Imperial, Sask., about 130 km north of the city. Hulicsko, who began building rock pickers in 1972, sold the business in 2012.

Apart from rock pickers and rock windrowers, Rite Way’s product lines today include land rollers, heavy harrows, rotary harrows, crimper rollers, bale carts, grapples and high-speed compact discs. — Glacier FarmMedia Network

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Calgary consultancy Alvarez and Marsal, the court-appointed monitor for Morris, said Tuesday in its latest report to Court of Queen’s Bench in Saskatoon it recommends approval of a sale and vesting order, clearing the way for Morris’ sale to Superior Farms Solutions Ltd. (SFSL), the operator of Rite Way Manufacturing.

The report also recommends Morris’ creditor protection, which has been in place since Jan. 8 with several extensions and otherwise expires Friday, be extended again to Nov. 30.

Alvarez and Marsal said it expects the “transactions contemplated” in the proposed deal to close on or before Nov. 15, and has “continued to work towards satisfying the remaining conditions” of asset purchase agreements (APAs) with SFSL for Morris.

The monitor said it believes it’s appropriate to seek a sale and vesting order now, since it’s working to address those outstanding conditions on or before Friday (Sept. 18). The APAs, it noted, have the approval of BMO, Morris’ largest secured creditor.

The APAs, Alvarez and Marsal said, “represent the highest and best offer received for the assets” of Morris, and a deal with Rite Way “would be more beneficial to (Morris’) creditors than a sale or disposition under a bankruptcy given the offers previously received.”

Remaining conditions for a deal include SFSL reaching an acceptable financing arrangement with its lender — and for Morris to negotiate an “acceptable arrangement” with the union representing employees at its Yorkton, Sask. manufacturing plant.

On the latter, Alvarez and Marsal said a letter of understanding between Morris and the Retail, Wholesale and Department Store Union Local 955 was drafted and submitted to union members. The membership then approved the terms of the letter on Aug. 26 in a vote at an open-air meeting at a Yorkton baseball diamond.

That letter proposes setting up a fund to manage payments to an unspecified number of Yorkton plant employees “whose employment is anticipated to be terminated” once the sale closes.

Further details weren’t available; the monitor has also asked Queen’s Bench to place the letter under confidential seal along with the proposed APAs.

Apart from its plant at Yorkton, Morris also has a plant at Minnedosa, Man. The Saskatoon-based company’s businesses include manufacturing air carts, drills, seeders, harrow bars and bale carriers.

Founded in 1929 as Morris Rod-Weeder, the company was owned by the Morris family up until 2007, when it was sold to an ownership group led by then-CEO Casey Davis. Another ownership group, led by Ben Voss replacing Davis as CEO, took majority control in 2017.

Apart from BMO, Morris’ secured creditors include Avrio, Kubota Canada, Wells Fargo and the financing arm of fabricating equipment maker Trumpf, among others. Unsecured creditors include Western Economic Diversification Canada and various trade vendors.

Rite Way, founded by Regina machine shop owner Les Hulicsko, is today headquartered in Regina but has its main plant at Imperial, Sask., about 130 km north of the city. Hulicsko, who began building rock pickers in 1972, sold the business in 2012.

Apart from rock pickers and rock windrowers, Rite Way’s product lines today include land rollers, heavy harrows, rotary harrows, crimper rollers, bale carts, grapples and high-speed compact discs. — Glacier FarmMedia Network

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Kruger had initially asked for a $2 million loan to build a grain elevator. But the Chicago-based bank, one of the largest U.S. farm lenders, ended up selling him a $5 million loan for the elevator and another $7 million to finance crops, machinery and debt consolidation, according to documents in the Ohio foreclosure case the bank filed to seize Kruger’s farm (all figures US$).

When Kruger offered to supply receipts of sold grain and other standard documentation, his loan officer told him not to bother. “‘Don’t worry. We’ll make the numbers work’,” Kruger, 67, recalled the officer saying.

Five years later, after aggressively expanding its U.S. farm loan portfolio, the bank called in Kruger’s loans as corn and soy prices collapsed and the United States was starting a trade war with China. As the U.S. agricultural economy sours and farmers’ financial woes pile up, BMO Harris is leaving behind a trail of farmers such as Kruger who have lost nearly everything.

The bank, a subsidiary of Canada’s Bank of Montreal (BMO), has struggled to recoup some of its investments through a slew of bitter legal fights, according to a Reuters review of court documents and bank regulator data, as well as interviews with dozens of U.S. farmers, bankers, and former and current BMO Harris employees.

“BMO Harris did push for growth, and they’ve had some of those deals blow up spectacularly in their faces,” said John Blanchfield, founder of Agricultural Banking Advisory Services, a consulting firm.

The plight of BMO Harris and its customers reflects broader distress in the U.S. farm sector. Farmers are struggling to pay back their loans or obtain new ones. Shrinking cash flow is pushing some to retire early and a growing number of producers to declare bankruptcy, according to farm economists and legal experts.

BMO Harris may yet face more defaults, judging by its high level of delinquent loans. At the end of June, nearly 13.1 per cent of its farm loan portfolio was at least 90 days late or had stopped accruing interest because the lender doubts the money will be paid back — compared to 1.53 per cent for all U.S. farm loans at banks insured by the Federal Deposit Insurance Corporation (FDIC). BMO Harris had the highest rate among the 30 largest FDIC banks, according to a Reuters analysis of loan data the banks reported to the regulator.

Ray Whitacre, head of BMO Harris Bank’s U.S. diversified industries unit, said in a statement that the bank’s distressed loans do not represent “the overwhelming majority” of its borrowers’ experiences. The Bank of Montreal and its U.S. businesses have been in farm lending for more than a century, he said. The bank takes a long-term view of helping farmers through “all stages of the economic cycle,” Whitacre said.

BMO Harris spokesman Patrick O’Herlihy attributed the high delinquency rates to the bank’s lending in the upper Midwest, where dairy and grain operators have faced serious financial challenges. Sam Miller, BMO Harris’ managing director of agriculture banking, said the bank is keeping a closer eye on its customers with cash-flow shortages and lending to fewer mid-sized operators. “We have to be more vigilant in underwriting the risk,” Miller said in an interview.

The bank declined to comment on any individual loans or borrowers, or on the prospect that it could face additional defaults based on its delinquency rates.

Missing collateral

The bank’s exposure to the farm sector reached a peak of $1.59 billion in 2018. Most other major banks have been scaling back their farm-loan portfolios since about 2015, as prices fell due to a global grains glut, according to the Reuters analysis of FDIC data.

Among the BMO Harris deals that went belly-up was $43 million in farm operating loans to McM Inc, run by Ronald G. McMartin Jr. in North Dakota. The farm filed for Chapter 7 bankruptcy in 2017.

BMO Harris secured a $25 million loan with McM’s grain, cattle and other farm crops, along with other assets. McM agreed to use the sale of these crops to pay the bank back, according to a copy of the loan.

During the bankruptcy proceedings, BMO Harris’ attorneys told the court it was unable to locate all the crops backing its loans, alleging that McM had sold some of the crops to pay other creditors first. Court documents also show the bank had not audited some of the farm’s financial statements. An outside consultant later found McM’s accounts receivable and inventory was overstated by at least $11 million, according to court filings. Neither McMartin nor his attorney responded to requests for comment.

Some experts and bankruptcy attorneys representing former BMO Harris customers say the bank issued too many loans for too long that farmers simply could not pay back. The problems, they said, stem from the aggressive practices of some loan officers and a lack of oversight by bank auditors.

Michael and Byron Robinson borrowed $2.5 million in an agricultural loan and another $2.5 million on a line of credit in 2013 through their Indiana businesses, court records show. The bank sued the Robinsons in federal court as part of its foreclosure process in 2016 and later sold the farmland at auction. The property brought far less than the value the bank had estimated the properties were worth to justify the original loans, said their bankruptcy attorney, Maurice Doll.

Michael and Byron Robinson did not respond to requests for comment. Doll said BMO Harris had loaded his clients up with far more debt than they could reasonably pay.

‘Don’t worry. it’ll be fine’

The Indiana-based BMO Harris banker working with the Robinsons and Kruger, Thomas “T.J.” Mattick, found his customers through farm magazine advertisements, word of mouth, at church gatherings and from rural loan brokers who were paid a finder’s fee, according to interviews with 10 farmers and one loan broker.

“I thought I could trust him,” Kruger said. “We would talk about church and faith all the time.”

When the Robinsons were looking to expand their corn and soybean operations, Mattick convinced them to buy two new farms instead of one — with BMO Harris financing 100 per cent of the deal, said Michael Morrison, the Robinsons’ farm bookkeeper and a former agricultural banker.

Morrison told Reuters he was concerned by how the bank’s underwriters valued the family’s grain in storage, on the premise that its value would continue to rise — even as grain prices were starting to soften at the time.

“We used to say that T.J. never saw a loan he didn’t like,” Morrison said. “I kept telling them, ‘Don’t do this. Don’t take on the debt.’ But T.J. kept telling them, ‘Don’t worry, it’ll be fine’.”

Mattick, who no longer works for the bank, denied that he encouraged borrowers to take on more debt they could pay back. In written answers to questions from Reuters, Mattick said “extensive underwriting and analysis” were conducted on the loans for Kruger and the Robinsons, as with any other file.

Mattick denied telling Kruger that he would “make the numbers work” without standard documentation such as sold-grain receipts. And he said BMO Harris would not have given the Robinson’s 100 per cent financing on their farms unless they pledged additional collateral. BMO Harris declined to comment on Mattick’s statements regarding individual loans and bank policy, and Reuters could not independently verify them.

“I worked with clients to help them determine what they could afford and never would have counseled them to incur debt beyond what they could afford,” Mattick said.

— P.J. Huffstutter reports on agriculture and agribusiness for Reuters from Chicago; additional reporting by Jason Lange and Pete Schroeder in Washington.

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Canadian Exotic Grain’s grain dealer license was revoked April 26 after the company was unable to pay producers. On June 4, Saskatchewan Pulse Growers posted on its website that it had been told by the CGC that Canadian Exotic Grains was no longer licensed.

A notice on the Deloitte Canada website stated that as of July 17, Canadian Exotic Grains had filed a notice of creditors of intention under the Bankruptcy and Insolvency Act.

The Eston, Sask.-based specialty crops company, at a court hearing Aug. 8 in Saskatoon, was granted until Sept. 28 to file a proposal, amongst other relief.

The company, incorporated by area farmer Gary Schweitzer in 2009, grew and also marketed crops such as lentils, chickpeas and coriander. Schweitzer later retired, stepped out of the company’s day-to-day operations in 2014 and moved to Medicine Hat.

According to CEG’s application documents filed with Court of Queen’s Bench, the company’s revenues had “significantly declined” in recent years for reasons including poor crop years in 2016 and 2017, “uncollected receivables” and the inability to secure operating financing.

The uncollected receivables, CEG said, followed the 2013 bankruptcy of Quebec food processing firm CLIC International, whose assets were later bought by Saskatchewan pulse processor AGT.

CEG said a “key” employee and shareholder also quit around that time, which led the company to sell its landholdings and focus solely on grain marketing.

The CGC said Tuesday it investigated a number of non-payment claims against CEG, determining finding four producer claims eligible for compensation. Those producers were fully covered under the security CEG posted under the terms of its license.

Licensed companies have to provide a security to CGC to cover amounts owed to producers for grain deliveries; if a company is unable to pay for grain that has been delivered, the security is used to compensate producers.

A number of claims against CEG were deemed ineligible, however, because they were not submitted on time, the commission said.

To be eligible for compensation, producers had to submit their claims within 90 days of delivery or within 30 days from the date the cash purchase ticket or cheque were issued, whichever is less.

CEG’s secured creditors include Farm Credit Canada and the financing arm of equipment firm Agco. Other listed creditors with claims over $250 include a relatively small number of farmers. –– CNS Canada, with files from GFM Network staff

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