In a move that has been described as a blow to the industry, the Toronto-based North American Fur Auctions (NAFA) lost its primary lender last month and decided to get out of the business of selling furs.
Now, it's been given some extra time to sort things out.
On Oct. 31, NAFA was granted creditor protection by the Ontario Superior Court of Justice. The proceeding was described as "akin to U.S. procedure under Chapter 11 of the US Bankruptcy Code" in a release published by NAFA on Monday.
"NAFA's tremendously difficult decision to enter into [Companies' Creditors Agreement Act] follows a number of months of struggle and hard work of trying to refinance the company," the statement said.
"NAFA has been unable to negotiate a final comprehensive refinancing deal."
The procedure gives the company "breathing room" and "operational ability" to decide on the next steps, according to the statement.
NAFA will proceed to complete the sale of its ranched mink loan portfolio to Saga Furs. After that, the company intends to organize the disposition or return of all furs it holds and will consider future options.
"At this time, it is unlikely that NAFA will conduct its own auction in March 2020 for either wild or ranched fur," the statement said.
The Oct. 31 order prevents the company from paying creditors with outstanding payments from before that day. Depending on how restructuring goes, a claims process may be created to address what will be paid to those with outstanding bills from before Oct. 31.
Deloitte will oversee the restructuring process. A representative from Deloitte Restructuring said he was unable to comment on the matter.
No timeline for restructuring has been made available yet.