Canadian pork producer enters restructuring following $35 million fraud lawsuit in the U.S.
Alberta, has filed for protection under Canada’s Bankruptcy and Insolvency Act, alongside several of its subsidiaries — including Trochu Meat Processors, a key pork processing facility.
The filings come amid serious legal scrutiny stemming from a federal lawsuit filed in the United States by Compeer Financial, a Minnesota-based farm credit cooperative. The lawsuit alleges that three Sunterra-owned hog operations — Sunterra Farms, Sunwold Farms, and Lariagara Farms — were involved in a “long-running fraud” scheme.
$35 Million Fraud Allegation
According to the lawsuit, the companies collectively owe more than $35 million to Compeer Financial, backed by only $19 million in collateral. The legal complaint accuses the operations of engaging in a check-kiting scheme — a practice where checks are repeatedly circulated between companies using accounts with insufficient funds, temporarily inflating bank balances and triggering unwarranted interest payments from Compeer.
Business Operations Continue During Restructuring
Despite the financial and legal challenges, Sunterra has indicated that it has no intention of closing its stores or ceasing operations. The company is working with its insolvency trustee, Harris and Partners Inc., to restructure finances and stabilize the business in the wake of these allegations.
“This is a financial restructuring—not a shutdown,” stated representatives close to the process. “The goal is to protect the business and its employees while addressing creditor obligations.”
Industry Implications
Sunterra Farms and its affiliated operations have played a prominent role in Western Canada’s pork production landscape. The outcome of this legal and financial process will be closely watched by producers, processors, and stakeholders across North America’s swine industry.
Swine Web will continue to provide updates as this story develops and the restructuring efforts progress.
