Canadian meal kit company Goodfood seeks bankruptcy protection
· Toronto Sun
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Canadian meal kit company Goodfood is seeking bankruptcy protection in Quebec, a day after announcing its CEO had resigned after less than six months on the job.
The Montreal-based online meal company said in a news release Wednesday morning that it is looking to pursue a financial restructuring in Quebec Superior Court that will allow it to continue operations by either seeking a buyer or new investor.
The company, which sells meal kits across Canada, operates production facilities in Quebec and Alberta. It employs approximately 230 people in Montreal, Calgary and Mississauga, and does not expect any job losses as a direct result of the filing.
“Goodfood has been implementing a turnaround plan focused on simplifying operations, reducing its cost structure and refocusing on its core meal solutions business while enhancing its customer offering,” the company said in a statement .
“These initiatives have improved operating performance. However, Goodfood continues to face significant near-term liquidity constraints, including upcoming debt maturities and scheduled interest payments.”
Best way to continue operations
The firm said a restructuring under the Companies’ Creditors Arrangement Act (CCAA) was the best way to continue business operations after analyzing alternative options.
“We have made important progress in strengthening our business, but our near-term liquidity pressures require a more comprehensive solution,” said Donald Olds, Lead Independent Director. “The CCAA process will give us the time and flexibility to pursue our restructuring and continue implementing our turnaround plan.”
Later Wednesday, the company said the Quebec Superior Court granted an initial order for creditor protection under the CCAA.
The order gives the firm the time and flexibility needed to move ahead with its financial restructuring while continuing to operate its business.
The court also appointed Raymond Chabot Inc. as a monitor in the bankruptcy proceedings.
CEO resigned after hired in February
On Tuesday, the company announced the resignation of Selim Bassoul as CEO after he joined the firm in February.
“On behalf of the Board, I would like to thank Selim for his commitment, leadership and tireless efforts over the past year,” said Olds. “His work helped reshape the company’s operating model, improve cash generation, and position Goodfood to pursue the next phase of its strategic process. We wish him every success in his future endeavours.”
Also Tuesday, Goodfood announced the appointment of Najib Maalouf as CEO. He joined the company in mid-March as president and chief operating officer.
“Mr. Maalouf’s deep knowledge of our operations, culture, strategic priorities, and proven results make him the right leader to guide Goodfood forward,” said Olds. “His appointment ensures continuity in the execution of our strategy at an important time for the Company as we carefully weigh our strategic options.”