One of the last remnants of Toronto’s “Hogtown” past has formally gone bankrupt, in a move expected to permanently close the doors and strip out the assets at Quality Meat Packers and its Toronto Abattoirs arm.
The two pork-packing and -processing companies in early April filed a notice of intention for a proposal to restructure under creditor protection, but did not renew their stay of protection before Monday night’s deadline, according to receiver A. Farber and Partners. [Related story]
Ontario Superior Court Justice David Brown on Tuesday approved Farber to “administer the orderly realizations” of the companies’ assets, including, if need be, “to market any or all of the property.” Farber said it “has not yet finalized the marketing process.”
While in creditor protection, Quality “attempted to stabilize the business and source sufficient supply” to continue operating, and had projected it would reopen on about April 21, but found it was “unable to recommence its operations as contemplated.”
Specifically, Quality had negotiated a deal with the Ontario Pork Producers’ Marketing Board for pre-payment on hogs, as producers were “not willing to supply hogs… absent a pre-payment mechanism,” Quality president David Schwartz said in a May 2 affidavit.
Despite the deal, he wrote, Quality remained “unable to secure sufficient supply to operate at an economically viable level.”
In turn, since Quality had put its operations in shutdown mode after entering creditor protection, it “had difficulty obtaining customers’ commitments for its products without being able to confirm to its customers that it had certainty of sufficient supply to meet those commitments.”
The plants’ lists of creditors show Quality as owing an estimated $40.53 million to suppliers overall, and Toronto Abattoirs as owing $28.92 million.
Several hog operations are listed as being owed five and six figures. Farber has estimated that, as of April 3, Quality and Toronto Abattoirs together owed hog producers about $8.67 million; all unsecured creditors combined are owed about $13.01 million.
Both companies’ finances have been “negatively affected by a number of factors including the volatility of the price of pork,” Farber said on its website. Court documents cite the company’s “inability to obtain sufficient supply.”
Hog prices have risen dramatically in the past year, partly on the arrival and spread of the porcine epidemic diarrhea (PED) virus in the U.S., putting price pressure on packers big and small seeking live hogs. [Related story]
Farber said it’s now working with the companies to prepare statements of affairs ahead of their first meeting of creditors, to be held May 26 in Toronto.
Wages and vacation pay owing to plant employees have been paid up to and including Monday, Farber said, and creditors and employees should receive an official notice to creditors by mail by May 16. The two plants combined had over 600 unionized and 100 non-unionized employees.
Quality was formed in 1931 by meat market operator Nick Schwartz, Quality Meat Packers in 1960 bought the Toronto Civic Abattoir and operated at that site until this year, supplying retailers and marketing its own Legacy brand pork products.
Thanks to its location, the Quality plant in recent years has famously drawn complaints and protests from condo-dwelling neighbours and animal-welfare activists in what’s now Toronto’s Fashion District.
The plant was federally inspected and licensed for slaughter, boning, cutting, rendering and casing preparation, and for export to the U.S., the European Union, China, Mexico, Australia and Brazil, among other countries. — AGCanada.com Network