Sunterra takes steps toward creditor protection while U.S. subsidiaries face legal scrutiny

Paula Duhatschek · CBC News

· Posted: Apr 10, 2025 12:12 PM EDT | Last Updated: 9 minutes ago

Several businesses nether the Sunterra banner, known successful Alberta for its agriculture and high-end market operations, person taken steps toward creditor extortion arsenic 3 of its U.S. subsidiaries look ineligible and fiscal scrutiny. 

Late past month, Sunterra Quality Food Markets, Sunterra Food Corporation, Sunterra Farms, Trochu Meat Processors and Sunwold Farms each filed notices nether the Bankruptcy and Insolvency Act, a process that gives financially strained companies 30 days of extortion from creditors portion they travel up with a program to restructure.

Trochu is wherever Sunterra processes its pork successful Alberta. The installation was damaged successful a occurrence past summertime and has not yet reopened.

Sunwold Farms is simply a pig cognition successful South Dakota wherever Sunterra sends pigs to beryllium finished.

"Please beryllium advised that the institution is not bankrupt and has availed itself to a process whereby an insolvent person, with creditor and Court approval, restructures its fiscal affairs," said the insolvency trustee, Harris and Partners Inc., successful letters to creditors for each of the 5 entities. 

Documents amusement each of the 5 entities beryllium millions of dollars to creditors, though immoderate of that includes wealth owed to 1 another. For example, Sunterra Farms Ltd. owes conscionable implicit $3 cardinal to Sunterra Food Corp., and Sunterra Food Corp. owes $4.9 cardinal to Sunterra Farms Ltd.

Meanwhile, a Midwestern workplace recognition cooperative has alleged breach of declaration and fraud against 3 of Sunterra's U.S. subsidiaries. Since 2002, Sunterra has been shipping pigs to northwest Iowa and South Dakota to decorativeness growing, according to the company's website.

The claims against Sunterra Farms Iowa, Sunwold Farms and Lariagara Farms South (another pig-finishing cognition successful South Dakota) are related to an alleged "cheque kiting" strategy successful South Dakota, tribunal documents show. 

All 3 entities person the aforesaid genitor company, Sunterra Enterprises Inc.

Cheque kiting refers to the process of depositing cheques from 1 relationship with insufficient funds into another, to temporarily marque a slope equilibrium look inflated.

According to Compeer Financial, the companies were sending aggregate cheques each time via next-day message to beryllium deposited with Canada Western Bank. At the aforesaid time, they were besides sending Compeer aggregate cheques, drawn against the Canada Western Bank account.

"In different words, Defendants were sending astir identical amounts and numbers of checks backmost and distant betwixt CWB and Compeer daily," said the tribunal documents.

Compeer alleges the cheques purposely didn't transcend $1 cardinal to debar scrutiny.

It's alleged that the companies collectively beryllium $35,259,796 to Compeer and person $19,017,724 successful collateral.

Given the evident fiscal strain, Compeer has suggested that the companies can't spend to decently provender and attraction for 110,000 pigs that are being utilized arsenic collateral connected its loans.

"[An appraisal serviceman for Compeer] testified that Defendants' pigs deficiency provender and veterinary care," the tribunal documents say. "[He] added that propane was moving low, which is utilized to vigor the barns that location Defendants' pigs."

The companies, for their part, said Compeer was facing a self-inflicted occupation due to the fact that it controlled the "purse strings" and was trying to "turn disconnected the taps" to origin an emergency, the tribunal records show.

"Asking for Compeer to "keep the taps flowing" portion Defendants' accounts are overdrawn tens of millions of dollars owed to Defendants' alleged fraud is an untenable argument," a South Dakota justice wrote successful his treatment of the case.

On March 28, the justice granted Compeer's question to debar mediation successful the lawsuit and to name a receiver. 

Sunterra has not responded to an interrogation petition from CBC News.

A spokesperson for Compeer declined to comment.

The Sunterra institution started with a tiny household pig workplace operated by Stan and Flo Price successful Acme, Alta. In 1970 the institution began a pig-breeding business, Pig Improvement Canada (now known arsenic Sunterra Farms). In 1990, it launched pork processing successful Trochu and Sunterra Market retail locations successful Calgary.

In 1990, the institution told the Calgary Herald it had invested successful a specialty slaughterhouse successful Trochu and retail stores successful Calgary to merchantability "superior, 'uniform-quality' meat" from "genetically improved herds" to the public. 

Sunterra has 8 retail locations successful Calgary, Edmonton and Red Deer, according to its website.