The Prince Edward Island (P.E.I) provincial government is providing a short-term CAD 3.8 million (USD 2.8 million, EUR 2.4 million) loan to lobster processor Seafood 2000 Ltd. as part of a creditor protection arrangement.
The Supreme Court of Prince Edward Island appointed licensed insolvency trustees MNP Ltd., which provided a list of creditors with debts totaling CAD 22 million (USD 16 million, EUR 13.7 million).
The company filed for creditor protection on 11 May, explaining that it is insolvent. According to its filing, it has suffered financial strain due to margin compression caused by several factors, including cost increases and price volatility for lobster, fuel cost increases, uncertainty from tariffs, and a lack of available credit.
Seafood 2000 buys an average of 250,000 pounds of live lobster weekly during the spring season, according to an affidavit filed by Seafood 2000 CEO Etienne Dodier.
According to the affidavit, the company was current on all payments to lobster fishers when it filed the documents, but that it would not have the cash needed to pay for lobster purchased during the week of 4 May, 2026. Those payments were anticipated to be between CAD 1.75 million and CAD 2.15 million (USD 1.27 million and USD 1.55 million, EUR 1.08 million and EUR 1.33 million).
“If the lobster suppliers are not paid, Seafood 2000 will be unable to purchase lobster and its operations will cease,” the affidavit states.
Seafood 2000’s filing said it was “in the midst of a liquidity crisis,” in part due to changes to its business model which created constraint on its cash flow. According to its application, it sold inventory at lower than standard market rates to generate additional cash flow, and also attempted to attain additional financing from other sources, but those efforts to avoid filing for creditor protection under the Companies’ Creditors Arrangement Act (CCAA), a federal act giving companies the opportunity to restructure to avoid bankruptcy, fell short.
Creditors of the Georgetown, P.E.I.-based company include: Atlantic Fisheries Fund, a contribution program funded jointly by the federal, provincial and territorial governments, which is owed more than CAD 893,000 (USD 647,000, EUR 556,000); Maine Shellfish Co., which is owed more than CAD 6,500 (USD 4,700, EUR 4,000); Packer’s Pride USA, owed more than CAD 5,400 (USD 3,900, EUR 3,000); Lobster Council of Canada, owed CAD 3,750 (USD 2,700, EUR 3,000); and National Bank of Canada, owed more than CAD 2 million (USD 1.4 million, EUR 1.2 million).
The company also could not pay payroll at the time. Seafood 2000 employs a seasonal workforce of between 165 and 170, along with five full-time, year-round employees and five casual employees.
Liberal MLA Robert Henderson raised the creditor protection application in the legislature on 20 May, according to local publication The Guardian. Henderson said P.E.I. suppliers are wondering if they’re ever going to see their money.
“Through a court process, the government has put itself in a position of holding first security on Seafood 2000,” P.E.I. Premier Robert Lantz told the legislature.“We are in a position to finance the company so that its payables to fishermen, that it’s already bought product from, will be fulfilled so that lobster fishermen and oyster fishermen will be in a position to be paid for the products that they’ve sold to the company.”
P.E.I. is providing the short-term loan of CAD 3.8 million through a debit in possession financing arrangement, according to a statement provided to The Guardian by Emily Blue, press secretary for Lantz.
The company received an initial CAD 490,000 (USD 355,000, EUR 305,000) to meet immediate cash flow to pay fishermen for their catches and the balance of CAD 3.4 million (USD 2.5 million, EUR 2.1 million) is going through final internal government approvals before another application is submitted to continue the CCAA process, per the statement.
The short-term debt would be fully repayable and will be paid back in full by the end of the fishing season, according to the statement.
Etienne Dodier, Louis Landry, and Conrad Leger, through a corporate entity, purchased all outstanding shares of Seafood 2000 in 2024 for CAD 22.7 million (USD 16.4 million, EUR 14 million) from a family ownership group that included Patrick Dodier – Etienne Dodier’s father – according to the affidavit filed by Etienne.
The acquisition was financed with a CAD 16.2 million (USD 11.7 million, EUR 10.1 million) Farm Credit Canada loan and CAD 6 million (USD 4.3 million, EUR 3.7 million) of vendor take-back financing from three former principal shareholders.
The post-acquisition business plan moved Seafood 2000 toward direct sales, including through Packers Pride USA LLC – in which Seafood 2000 holds a 70 percent interest – and away from broker-driven distribution. The affidavit said the shift was in part a means of responding to market challenges, and that it would accomplish the change by selling directly to customers “by creating Packers Pride” and expanding production in its Georgetown plant.
Packers Pride was subject to a lawsuit by Ready Seafood in a U.S. district court, who accused the company of stealing trade secrets including customer information. The two companies later settled the lawsuit, though the terms of that settlement went undisclosed.
Seafood 2000 said it intends to continue ordinary-course operations, pay critical suppliers and use funding provided by Finance PEI to “bridge the spring season while it works on a broader restructuring.”
