A group of companies that run an Armstrong dairy farm and trucking operation are having certain financial struggles.
Five companies — Bifano Consolidated, Bifano Farms, Nata Farms, SSC Ventures and Spallumcheen Farm Ltd — are all named in a B.C. Supreme Court petition launched by creditor Bank of Nova Scotia.
The court documents show that Bifano Consolidated and Spallumcheed Farm own property in Armstrong valued at roughly $4,461,400. Since 2018, the companies have expanded their trucking operations with debt and have ceased making lease payments.
The Bank of Nova Scotia is the companies’ primary secured creditor and is owed about $36.5 million plus interest and other costs, according to the documents. The bank made a demand for payment on June 15, 2023.
The companies have been in default since 2022, but the Bank of Nova Scotia has provided them with time and opportunities to resolve the defaults, including entering into forbearance agreements in December 2022 and February 2023. The bank also issued reservations of rights letters in which it agreed to defer the farm companies’ scheduled loan payments. It also worked with the companies regarding a proposed restructuring.
“The companies have been unable to resolve the defaults, restructure or refinance and, accordingly, (the Bank of Nova Scotia) commences these proceedings,” the court documents state.
The companies have ceased making payments since April 2023, according to the court documents.
There are also significant tax debts, including over $1.8 million owed by Nata Farms, another $800,000 owed by the five companies, and about $1.6 million in shareholder loans.
In the petition, the Bank of Nova Scotia says a stay of proceedings is needed to maintain the status quo, or else there will be “an immediate and significant erosion of value.”
The bank sought the appointment of management consulting company A&M to be the monitor with enhanced powers in the case. A&M agreed to this appointment to monitor the business and financial affairs of the companies, the court documents state.
According to the documents, the companies will require funding to meet critical expenses until May 19, including expenses related to the maintenance of the company’s livestock and payroll obligations.
“Without the interim financing, the companies will not have sufficient cash on hand required to continue operations and the companies’ assets will be at risk, adversely affecting the companies’ stakeholders,” the court documents state.
“(The companies) are unable to meet obligations as they come due and will run out of cash before they are able to implement a restructuring.”
The court ordered that the companies responding to the petition will remain in possession and control of their current and future assets and properties and continue to carry on their business.
Vernon Morning Star reached out to Bifano Consolidated for comment, but had not received a response by publication.
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