By Brandy Harrison
GUELPH — Organic Meadow may have weathered its financial storm, with a repayment proposal out to creditors this month and two possible partners waiting in the wings.
“We’re starting to see the finish line. Once we’re through restructuring, we can breathe a greater sigh of relief. We’re cautiously optimistic about what awaits us on the horizon,” says Michelle Schmidt, marketing manager with the Guelph-based organic dairy co-op.
Organic Meadow Co-operative Inc. began reorganizing last fall but in April it and its two related companies requested a stay of proceedings to stave off creditors while it made a debt repayment proposal.
On July 29, it filed a proposal to repay the nearly $7 million owed to unsecured creditors with its court-appointed trustee, MNP Ltd. In April, it also owed an additional $15 million to secured creditors.
MNP will distribute the proposal to creditors, which will meet on Aug. 18 to vote.
If creditors accept the proposal and it receives court approval, after a 10-day appeal period the lump sum payment can be made to creditors and protection lifted. But if creditors reject the proposal, Organic Meadow would be deemed bankrupt.
In earlier court documents, Organic Meadow CEO Don Rees put the blame for its financial trouble on new payment terms from the Dairy Farmers of Ontario and the combination of a milk shortage and end of a priority access agreement for its own milk. The co-op produces more than 70 per cent of the milk in the organic pool.
With enough milk to meet current demand and the possibility that creditor protection will end in late August, Schmidt is looking forward to September, when she hopes the co-op will have a new partner. It’s in discussions with two possible partners but Schmidt hasn’t heard of a buyout offer and stresses the farmer-owned co-op will remain a key player.