The court overseeing creditor protection for seeding equipment maker Morris Industries is being asked to approve a deal for the company’s sale to another Saskatchewan manufacturer.
Calgary consultancy Alvarez and Marsal, the court-appointed monitor for Morris, said Tuesday in its latest report to Court of Queen’s Bench in Saskatoon it recommends approval of a sale and vesting order, clearing the way for Morris’ sale to Superior Farms Solutions Ltd. (SFSL), the operator of Rite Way Manufacturing.
The report also recommends Morris’ creditor protection, which has been in place since Jan. 8 with several extensions and otherwise expires Friday, be extended again to Nov. 30.
Alvarez and Marsal said it expects the “transactions contemplated” in the proposed deal to close on or before Nov. 15, and has “continued to work towards satisfying the remaining conditions” of asset purchase agreements (APAs) with SFSL for Morris.
The monitor said it believes it’s appropriate to seek a sale and vesting order now, since it’s working to address those outstanding conditions on or before Friday (Sept. 18). The APAs, it noted, have the approval of BMO, Morris’ largest secured creditor.
The APAs, Alvarez and Marsal said, “represent the highest and best offer received for the assets” of Morris, and a deal with Rite Way “would be more beneficial to (Morris’) creditors than a sale or disposition under a bankruptcy given the offers previously received.”
Remaining conditions for a deal include SFSL reaching an acceptable financing arrangement with its lender — and for Morris to negotiate an “acceptable arrangement” with the union representing employees at its Yorkton, Sask. manufacturing plant.
On the latter, Alvarez and Marsal said a letter of understanding between Morris and the Retail, Wholesale and Department Store Union Local 955 was drafted and submitted to union members. The membership then approved the terms of the letter on Aug. 26 in a vote at an open-air meeting at a Yorkton baseball diamond.
That letter proposes setting up a fund to manage payments to an unspecified number of Yorkton plant employees “whose employment is anticipated to be terminated” once the sale closes.
Further details weren’t available; the monitor has also asked Queen’s Bench to place the letter under confidential seal along with the proposed APAs.
Apart from its plant at Yorkton, Morris also has a plant at Minnedosa, Man. The Saskatoon-based company’s businesses include manufacturing air carts, drills, seeders, harrow bars and bale carriers.
Founded in 1929 as Morris Rod-Weeder, the company was owned by the Morris family up until 2007, when it was sold to an ownership group led by then-CEO Casey Davis. Another ownership group, led by Ben Voss replacing Davis as CEO, took majority control in 2017.
Apart from BMO, Morris’ secured creditors include Avrio, Kubota Canada, Wells Fargo and the financing arm of fabricating equipment maker Trumpf, among others. Unsecured creditors include Western Economic Diversification Canada and various trade vendors.
Rite Way, founded by Regina machine shop owner Les Hulicsko, is today headquartered in Regina but has its main plant at Imperial, Sask., about 130 km north of the city. Hulicsko, who began building rock pickers in 1972, sold the business in 2012.
Apart from rock pickers and rock windrowers, Rite Way’s product lines today include land rollers, heavy harrows, rotary harrows, crimper rollers, bale carts, grapples and high-speed compact discs. — Glacier FarmMedia NetworkTagged bankruptcy, BMO, court, creditor protection, Minnedosa, Morris Industries, Retail Wholesale and Department Store Union, Rite Way Manufacturing, sale, yorkton