A Québec court approved Fresh Prep Foods Inc.’s purchase of Goodfood Market Corp.’s operating assets, advancing a transaction the court-appointed monitor says would keep the business running and improve creditor recovery over liquidation in bankruptcy. Goodfood and Fresh Prep expect the sale to close around Nov. 13, subject to customary conditions.
The Superior Court of Québec issued its approval and vesting order Nov. 10. The purchase agreement was signed Nov. 2 after a court-supervised sale process managed by Raymond Chabot Inc., the appointed monitor. The monitor reported six binding offers for the assets and said Fresh Prep’s bid was selected Oct. 22.
The assets include customer data, accounts and subscriptions, recipes, intellectual property, inventory, contract rights and equipment at Goodfood facilities in Montréal and Calgary. The sale leaves out Goodfood’s shares in 16423132 Canada Inc., which holds about 80% of Genuine Tea Inc.
Fresh Prep said it expects to serve about 30,000 active Goodfood customers after the deal closes. It also said the purchase would strengthen its presence in Québec and extend its service to Saskatchewan, which it described as its fifth province of operation.
The monitor counted 181 Goodfood employees as of its Nov. 5 report and said Fresh Prep expected to offer jobs on existing terms to a “vast majority” of them. The transfer is structured to unfold over 30 days after closing, with Goodfood’s existing facilities remaining in use as Fresh Prep assumes operations. Fresh Prep will also take on certain obligations tied to gift cards, customer credits and employees, and pay some contract arrears and transition expenses.
Goodfood sought protection under Canada’s Companies’ Creditors Arrangement Act on Aug. 5. In its court application, the company said it faced cash shortages and inadequate revenue after sales fell from pandemic-era levels while expenses were slower to decline. The monitor said Fresh Prep’s proposal would continue Goodfood’s operations and provide creditors a better recovery than liquidation in bankruptcy.
The monitor reported two offers for the shares in 16423132 Canada Inc. by Oct. 30. It projected a buyer selection by Nov. 13 and a possible closing by Dec. 7, subject to further steps and court approval.
