Sask. based Monette Farms files for court protection amid restructuring

Saskatchewan-based Monette Farms has filed for creditor protection under the CCAA as it undergoes a court-supervised restructuring.

Saskatchewan-based Monette Farms has filed for court protection as it continues to restructure its business.

The application for protection under the Companies’ Creditors Arrangement Act (CCAA) was filed in Calgary on April 20.

In a letter to landowners and leasing partners, Darrel Monette, the president of Monette Farms, described the move as a “court-supervised restructuring process” that will allow the farm to continue operating while it stabilizes its finances and restructures its debt.

Monette made it clear the move was made to protect his business’s ability to operate and manage its obligations.

“CCAA is not bankruptcy or a shutdown,” he wrote. “It is a federal restructuring framework with court oversight intended to give a viable business time to develop and implement a plan, while continuing normal operations where possible.”

According to the court application, Monette Farms is facing a liquidity crisis that’s being driven by “poor crop prices, higher costs, spoilage and poor yields.”

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While the overall financial health of the operation is not in question, the value of the farm’s property holdings alone exceeds its liabilities, meaning the farming operation remains over-leveraged and requires assistance as it implements a “controlled deleveraging and refinancing of [its] indebtedness” while also preparing for the cost-heavy spring seeding season.

The application stated Monette Farms requires “urgent” debtor-in-possession financing in order to proceed with fertilization and seeding of its fields. It called this process the most “time-sensitive and operationally critical aspect,” of Monette’s business.

“… These steps require significant upfront expenditures and must be undertaken and paid for now.”

In his letter addressed to landowners, Monette assured partners that lease agreement will remain in force as the farm intends to maintain ongoing operations.

“Rent obligations are being actively managed and prioritized within the restructuring process, with the goal of a timely payment,” he wrote. “If anything changes that could affect your lease, we will communicate directly and as early as possible.”

Monette Farms owns and leases over 400,000 acres of farmland and employs an average of 425 people annually. The company is described as one of the “largest private farming operations in the world.”

Based in Swift Current, Monette Farms operates throughout Saskatchewan, Manitoba and the United States – with operations stretching as far south as Arizona.

Monette serves as the sole owner and shareholder of his business.

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