BC Tree Fruits, Burdened by Over $50M Debt, Seeks Creditor Protection

Premier David Eby has announced millions in additional funding for British Columbia’s struggling fruit industry, following the filing for creditor protection by a nearly century-old growers’ co-operative facing over $58 million in liabilities.

At a Tuesday news conference, Eby stated that the fate of the BC Tree Fruits Cooperative, which has provided storage and packing services for farmers, now rests in the hands of a judge.

Court documents reveal that the co-operative received a repayment notice last week for over $50 million in debt owed to the Canadian Imperial Bank of Commerce (CIBC). The co-op is reportedly “non-compliant” with its loan agreements with the bank.

A statement issued by the co-operative on Monday cited a “liquidity crisis” as the reason for filing for creditor protection, with the severe weather damage to this year’s stone fruit crops being described as “the final tipping point” after years of challenges.

Earlier this year, in mid-January, the Interior experienced several days of extreme cold that killed off buds on trees, which had only just begun to recover from the 2021 heat dome and a harsh winter in 2022.

The petition states that the cherry harvest was reduced by 85 to 90 percent, with all other stone fruit crops “reduced to zero.”

CIBC is reportedly “supportive” of the co-op’s restructuring under the Companies’ Creditors Arrangement Act (CCAA), which allows insolvent companies with over $5 million in debt to restructure their operations and temporarily avoid collection efforts.

While the co-op’s legal team was in court, Eby and B.C. Agriculture Minister Pam Alexis held a news conference in Penticton, announcing new supports for farmers.

Last month, the co-operative announced its closure due to “extremely low” estimated fruit volumes and “difficult market and financial conditions.” The petition describes the crisis as having “been building for many years.”

Filing for creditor protection was an effort to “maximize recovery for all stakeholders,” according to the co-op’s statement.

The petition shows that as of last year, the co-op and its subsidiary held more than $111 million in assets, including several properties, one of which—a Kelowna property valued at $21 million—is currently being sold.

However, the co-op also had more than $58 million in liabilities, including debts to CIBC and amounts owed to growers and other creditors.

Eby said Tuesday that the province would closely monitor the creditor protection process and explore options to ensure that “key assets are protected” or that services previously provided by the co-op might continue through the proceedings.

“The co-op has faced significant challenges, including governance issues and substantial debt,” Eby said. “The board’s decision to wind up operations was likely not an easy one, and it came quite suddenly from the provincial government’s perspective. Now that the matter is in court, we’re committed to doing everything we can to protect farmers while recognizing the legal process that is underway.”