Around 90 unsecured creditors that are owed more than CAD 1.9 million (USD 1.4 million, EUR 1.3 million) in Toppits Foods’ bankruptcy filing may not ever receive the funds, it was revealed at the first hearing of creditors on 31 May.
The Brampton, Ontario, Canada-based seafood supplier and value-added processor declared bankruptcy on 14 May and lists CAD 6 million (USD 4.4 million, EUR 4 million) in assets, according to the Office of the Superintendent of Bankruptcy in Canada.
In addition to the debts owed to the unsecured creditors, four secured creditors – which will be paid before unsecured creditors – are owed nearly CAD 18.5 million (USD 13.5 million, EUR 12.4 million). The four secured creditors include Toppits President and CEO Hai “Brian” Xiao and three businesses owned by Xiao: Hai Yang International, Ocean Premier Holdings, and Seaward Premier.
The bankruptcy trustee, Peter Maumis, is working with two former employees to collect funds to pay the secured creditors and said that CAD 1.5 million (USD 1.1 million, EUR 1 million) had been collected to date.
"After the creditors' meeting, hope for unsecured creditors was in short supply,” Vinicius Adams, an attorney for Fort Lauderdale, Florida, U.S.A.-based Netuno, which is owed USD 15,000 (EUR 10,000), told SeafoodSource. “However, the trustee offered some reassurance, noting that attorneys hired by Toppits and Xiao would evaluate Xiao's alleged secured claims, potentially impacting the chances of payment for all creditors.”
An attorney for Toppits said at the creditors’ meeting the seafood supplier paid all of its employees but they have not yet received termination pay.
Another secured creditor, the Royal Bank of Canada, was paid from the sale of assets to Export Packers, a seafood wholesaler and processor also based in Brampton, but the amount of that payment was confidential.
In an email to suppliers, Export Packers Senior Vice President of the Domestic Protein Division Arjen Melis said it acquired Toppits' business and assets on 10 May. However, any transactions which occurred on 9 May or prior to that date are governed by agreements suppliers had with Toppits, according to Melis.
At the creditors’ hearing, it was revealed that discussions to sell Toppits’ assets to Export Packers began in the fall of 2023, and then an agreement that was contingent and confidential was signed on 14 April.
For its part, Export Packers CEO Dan LeBlanc said the acquisition will “complement and expand our portfolio of seafood products and will enable us to offer our customers high-quality, value-added seafood products which are produced right here in Canada. It also aligns with our vision to expand our value-added seafood product offerings and domestic production capabilities at a modern plant that produces high-quality products.”
Export Packers supplies seafood products to retailer, foodservice, and further processing businesses across the country under the Ocean Jewel, Diamond Harvest, Ocean Dragon, Green Ocean, and Red Samurai brands.
Toppits' value-added manufacturing facility, which was expanded in 2022 with funding from the Federal Economic Development Agency for Southern Ontario, is located across the street from Export Packers' existing fresh fish processing plant in Brampton.
