Monette Farms has asked an Alberta court to extend its creditor protection by 12 days, from Nov. 13 to Nov. 25. This comes after the binding bid deadline moved from Oct. 15 to Nov. 3, and the end of the sale process moved from Nov. 30 to Dec. 4 at noon Mountain time.
The reason: to “continue negotiations.” The filings do not say how many bids arrived so far, who bid, or at what price for the 19 real estate listings.
New filings in the case include the application for the extension and a Fifth Affidavit from Darrel Monette, the company’s president and CEO, both filed by Monette’s lawyers, and the Fourth Report of the court-appointed monitor, FTI Consulting Canada.
Bids are in, and talks are still running
The monitor, not the court, changed the dates in the court-supervised sale and investment solicitation process, known as the SISP. It did so after consulting the agent for Monette’s debtor-in-possession (DIP) financing, the loan that funds operations during the restructuring. Darrel Monette swears in his affidavit: “On October 15, 2026, the Monitor, following consultation with the Group and the DIP Agent, extended SISP milestones pursuant to paragraphs 16, 53, and 54 of the SISP. The Binding Bid Deadline was extended to November 3, 2026 and the SISP Termination Date was extended to 12 pm (MT) on December 4, 2026.”
The original deadlines were Oct. 15 for binding bids and Nov. 30 for the end of the process.
The affidavit doesn’t elaborate on the negotiations but documents say parties are engaged with the SISP in regards to the property.
On where the process stands, the affidavit says Monette, the monitor and the lenders’ agent are reviewing binding bids “with the intention of implementing transactions through the end of the year.”
The stay would end nine days before the sale process does
Next week, Justice D.R. Mah is scheduled to hear the application Nov. 10 at 2 p.m. in the Court of King’s Bench of Alberta, Calgary, by Webex. It asks for one thing: moving the stay of proceedings, which blocks creditors from enforcing against Monette Farms, from Nov. 13 to Nov. 25, “or such later date as this Court may order.”
The application says the extension is needed so the company can continue harvesting, close the pending Arizona property sale, and assist the monitor with the continuation and conclusion of the sale process.
Darrel Monette adds in his affidavit: “To the best of my knowledge, no party will be materially prejudiced by the proposed Stay Extension.”
The monitor’s Fourth Report backs the request. It says “there will be no material prejudice to the Applicants’ creditors and other stakeholders” and that the group is acting in good faith. It does not use the word “recommend.”
Nov. 25 falls nine days before the Dec. 4 end of the sale process. If sales run to Dec. 4, another extension would be needed. That is an inference; none has been requested.
The farm keeps operating while assets sell
Harvest. The affidavit says the company has “substantially completed its harvest.” It seeded about 385,000 acres and has harvested about 500,000 metric tonnes of crop. About 3,000 acres remain, mainly in northern Saskatchewan and Manitoba. Yields and quality were “nominally lower than expected due to late season wet weather through September,” according to the affidavit.
Arizona. The Arizona property sale was approved Aug. 19 but has not closed. U.S. bankruptcy court approval came at the end of September. The affidavit says the sale is expected to close “imminently” once certain state land leases are transferred to the buyer. The buyer and price are not given in these filings.
Aircraft. Monette has given notice that it is cancelling, or “disclaiming,” a deal to sell its aircraft to Industrial Measuring Systems Inc. The cancellation takes effect Nov. 15, and the monitor says the buyer has not gone to court to challenge it. Monette says it has a competing offer of US$985,000, about US$385,000 more than the first buyer’s proposal, and that the higher price would substantially repay the Bank of Nova Scotia, which is owed money under the aircraft lease. In a letter filed with the affidavit, the company’s lawyers write that Monette “remains under significant pressure to deleverage.”
Cash is thin: $1.8 million of headroom on the loan
Monette has about $1.8 million of room left on its $90 million DIP loan, and the monitor forecasts $5.0 million in cash on Nov. 27. As of Oct. 23 the group held about $7.2 million in cash and had drawn about $88.2 million of the facility, which the Bank of Nova Scotia provides as DIP agent.
The takeaway: receipts ran about $25 million under forecast, the DIP loan is nearly fully drawn, and the monitor says liquidity is sufficient through the extension, but only with that financing still available.
The forecast $5.8 million paydown of the DIP did not happen. The report calls the receipts shortfall “timing variances” and ties it to weather and grain elevator delivery quotas.
For Oct. 24 to Nov. 27 the monitor forecasts $47.9 million in receipts, $44.0 million of it from grain, and a $5.5 million DIP repayment in the final week. That leaves ending cash of $5.0 million and a DIP balance of $82.7 million.
The monitor adds a caution: “the Monitor expresses no assurance as to whether the Fourth Cash Flow Statement will be achieved.”
Debt built the operation, and thinner margins left it overleveraged
The story of how Monette got here comes from the affidavit Darrel Monette swore April 17, before the filing. It is the company’s own account, and the documents reviewed record no lender statement. The business began as a family grain farm near Swift Current, Saskatchewan, in 1912 and grew fast from about 2004, as AgWeb reported in April. The affidavit says “as a result of substantial debt-driven expansion, the Group’s revenue grew from $45 million (cultivating 97,000 acres) to $198 million (cultivating 269,000 acres), while EBITDA grew from $20 million to $83 million).
It added U.S. farmland in 2019, then cattle and produce in 2021. The affidavit calls those “higher profit segments but require higher start-up capital costs and greater staffing requirements as compared to grain.”
The growth ran on a $950 million senior secured credit facility signed Dec. 5, 2018, with the Bank of Nova Scotia as agent for a lender syndicate (paragraph 12). Paragraph 147 gives Monette’s own diagnosis: “The Group’s historical growth strategy relied heavily on leverage, primarily through the expansion of farmable land using debt secured against Real Property under the Capital Facility.”
Then conditions turned. Beginning in 2024, “the Applicants’ EBITDA declined materially due to a combination of expansion into lower-margin segments and adverse farming conditions. At the same time, Real Property valuations backing the Capital Facility remained flat and interest rates and inflation remained persistently high.” The affidavit concludes: “As a result, the Group became overleveraged, rendering the existing capital structure unsustainable.”
The numbers: EBITDA fell to $37 million in 2024, and earnings per acre dropped by nearly half, to $83, the lowest of the decade. In 2025 Monette projected $72 million, but actual EBITDA was about $31 million because of “poor crop prices, higher costs, spoilage, and poor yields”.
The lenders’ patience ran out in stages. Defaults began in October 2024. The syndicate signed two waiver and covenant agreements and eight amending agreements, then a forbearance agreement in November 2025 that added deleveraging milestones. An equity raise of about $400 million through RBC Capital Markets in 2024 “did not result in a completed transaction”. Soon after the forbearance deal, the affidavit says, the Group “defaulted again on deleveraging milestones”.
The syndicate wanted asset sales. Monette sold land in Regina for $41.18 million and 17,000 acres in Montana for $47.5 million in 2025, then 12,932 acres near Swift Current for $54 million, or $5,312 an acre, which closed in March 2026. A second round of sales brought $30.78 million for about 3,000 acres, a result the affidavit says was “not acceptable to the Group”.
The loan came due April 15. The affidavit says: “The Group has no alternative other than to commence this proceeding and seek immediate interim financing to allow it to seed its farmland”. At filing, secured debt totalled $900 million against about $1.24 billion of assets booked at cost, a figure the affidavit calls “not reflective of market value”.
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