Monette Farms Faces $900M Insolvency

LINCOLN, Neb. (DTN) -- Saskatchewan-based Monette Farms has filed for protection from creditors to reorganize nearly $900 million in total secured debt, according to court documents filed by the farm's owner, Darrel Monette, requesting a court to supervise an insolvency restructuring process.

Monette Farms is one of the largest farming operations in North America with 350,000 acres that encompass both Canada and the U.S.

The farm became insolvent when on April 15, 2026, a senior facilities agreement matured at a cost of $829.5 million, according to court documents filed in the Court of the King's Bench of Alberta.

When such an agreement matures, it means all outstanding principal and interest on the loan comes due.

"As of the date of this affidavit, the applicants lack sufficient liquidity to fund ongoing operations and meet obligations as they become due," according to an affidavit filed by Darrel Monette.

"Absent immediate court protection, creditor enforcement would result in a disorderly liquidation and material value destruction to the assets of the group."

Monette filed for protection under Canada's Companies Creditors Arrangement Act, which is similar to Chapter 11 bankruptcy in the U.S., except it provides a court-supervised restructuring and the process usually take less time to resolve than Chapter 11.

The farm has sought a stay to stop all creditors from taking enforcement actions and from filing lawsuits.

The filing covers 18 named Monette corporations and three limited partnerships, including Monette Seeds Ltd.

SEED LICENSE LOST

On April 23, 2026, the Canadian government announced in a news release that Monette Seeds would no longer be licensed by the Canadian Grain Commission and that its primary license at Swift Current, Saskatchewan would not be renewed effective on May 1, 2026.

The government asked farmers who have open contracts with Monette Seeds to contact the court-appointed monitor FTI Consulting Canada Inc. at 1-833-417-0766. Payment complaints can be filed here: https://grainscanada.gc.ca/….

Monette Farms also is seeking approval of an initial $40 million debtor-in-possession financing with the ability to expand it to $90 million, according to court documents.

The farm told the court the funding was critical in keeping the business running through the 2026 spring seeding season.

A so-called comeback hearing has been scheduled for May 1, 2026, with the court to consider a full extension of the DIP funding and to continue to stay the proceedings.

FERTILIZER, INPUT COSTS

Darrel Monette said in the affidavit that the cost of fertilizer and crop inputs for spring planting, compounded by suppliers now demanding cash on delivery, led to a liquidity problem for the operation.

"Notwithstanding the stay of proceedings, the cash flow projection demonstrates that the group requires interim financing to ensure that they have sufficient liquidity to pay critical suppliers for crop inputs during the growing seasons," he said in the affidavit.

"Based on the cash flow projection, the applicants' cash flow projection through to July 2026 indicates a liquidity shortfall of approximately $90 million for the period arising mainly from the aforementioned fertilizer and crop inputs and the need to pay suppliers on delivery due to the group being subject to a CCAA proceeding."

In his affidavit, Monette explained how his farm reached the point of default.

Between 2017 and 2022, the company expanded using debt and growing revenue from $45 million to $198 million and earnings before interest, taxes, depreciation and amortization, or EBITDA, from $20 million to $83 million.

By 2024, Monette revenue hit $347 million but EBITDA collapsed to just $37 million. He said the crush came from expansion into lower margin produce and cattle segments, high interest rates and flat real property valuations.

Monette Farms then attempted to raise about $400 million in capital by selling a minority stake. The affidavit said it generated market interest, but the company was unable to find the money.

FAILED AUCTION

The farm attempted to sell at auction 12 different ranches in southern British Columbia, which was scheduled for March 2026. The Vancouver Sun reported Monette Farms did not receive offers for the ranches because of ongoing title concerns.

According to court documents, Monette bought his first quarter of land in 2004 and incorporated it in 2009 as Monette Farms. He is the CEO and principal of Monette Farms. By 2016 he diversified the company which produces grains, pulses, beef, seeds and produce in different locations.

By the fall of 2020, Monette Farms had up to 450 people working for it operationally and 55,000 seeded acres. Based in Swift Current, Saskatchewan, Monette Farms is now a large ranching and agricultural corporation operating in Saskatchewan, Manitoba and B.C.

Monette began expanding into the U.S. under Monette Farms USA Inc. in 2019, in Havre, Montana. Since then, the company expanded its ownership of farming and ranching operations in the U.S. to Billings, Montana, as well as Tonopah, Arizona.

Read more on DTN:

"Monette Farms Wins Appeal on BC Land," https://www.dtnpf.com/….

"Judge: Monette Farms Owner to Pay $12M," https://www.dtnpf.com/….

Todd Neeley can be reached at todd.neeley@dtn.com

Follow him on social platform X @DTNeeley

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