Cook it’s finances had deteriorated so much since “emerging from the pandemic” that its special advisor wondered if the ready-to-cook and ready-to-eat specialist had enough money in its coffers to “pass the holiday season.”
To save the furniture, the company founded by Judith Fetzer found itself in a race against time where it had to insist on receiving purchase offers, which led to the submission of a proposal by the British company -Colombian Fresh Prep Foods.
“At the beginning, we had fears that the liquidity would not allow us to get through the holiday season,” said Jean Gagnon, of Raymond Chabot, Monday, before Judge Michel Pinsonnault, of the Superior Court of Quebec. “Cash flow was very tight. »
The person who acted as trustee in this case was testifying as part of a hearing aimed at obtaining court approval to formalize the sale of Cook it, which had filed a notice of intention to make a proposal under the Bankruptcy and Insolvency Law on January 29. Mme Fetzer was present, but the businesswoman did not testify. The magistrate gave the green light to the transaction.
The sale price was not disclosed, but it is less than 2.3 million, the sum owed to the company’s secured creditors, we note when reading Mr. Gagnon’s report.
Together, the ordinary creditors, including the Fonds de solidarité FTQ (7.7 million) and Desjardins (7.4 million), lost nearly 19 million.
Years in the red
After “several years of deficit”, Cook it had reaped a net profit of 2.8 million at the end of its financial year ending June 30, 2022. M’s companyme Fetzer then turned the page on a year where health restrictions, which limited outings, had sparked a craze among households for ready-to-eat and meal boxes.
The improvement was, however, short-lived. “High inflation” pushes Cook it into the red. Sales decline by 27% between 2022 and 2023, to stand at 39 million. The year ends with a net loss of 7 million. The picture is hardly rosy for the six-month period ending on December 31. Despite efforts to reduce its fixed costs, the company lost 2.7 million. The “accumulated deficit” amounted to 25 million.
“The drop in turnover and inflation in raw materials (food) meant that daily management was more complicated,” explained Mr. Gagnon. This is what essentially led to the problems. Despite a lot of restructuring efforts, the Cook it team was unable to stay the course. »
Between May and December 2023, the company founded by Mme Fezter laid off 74 people. It had 178 salaries at the end of last year. Cook it had also slashed its marketing expenses by around 75%.
A “cold shower”
It is in this difficult context that the company decides to retain the services of the firm Raymond Chabot, on 1er last November. Its mandate: find partners or buyers. Until November 10, Mr. Gagnon is knocking on the doors of 17 “strategic investors/acquirers” in Canada, the United States and Australia. Two potential buyers move on to the next stage, which runs until December. A third actor was added at the last minute.
“Unfortunately, the three actors did not submit an offer,” explained Mr. Gagnon. It was a cold shower. We had a lot of hope with the first stage, but we didn’t get any offers. On the other hand, we continued discussions with the three actors from December 22 to January 17 and we received, with strong encouragement, three offers. »
It was ultimately Fresh Prep Foods, based in Vancouver, which won the prize. The company specializing in ready-to-cook and ready-to-eat meals is currently limited to British Columbia and the Alberta cities of Calgary, Edmonton and Red Deer.
Mr. Gagnon also explained to Judge Pinsonnault that despite his precarious finances, Cook it had preferred to solicit a buyer without sheltering himself from his creditors, in order not to sow “panic” among his customers. The objective, said the trustee, was to avoid an interruption of orders because customers were worried about the financial situation of Cook it.
Read “Cook it safe from creditors to be sold”
- Year of founding of Cook it
Source: cook it
- Number of acquisitions made by the company
Source: Raymond Chabot