The Varennes clean-fuels project transitioned to a new owner through proceedings under the Companies’ Creditors Arrangement Act (CCAA), with StormFisher acquiring Varennes Cellulosic Ethanol LP (VCE) by way of a reverse vesting order to continue the partly built Québec project in modified form. On March 10, 2025, VCE filed an application under the CCAA for an initial order, an amended and restated order, and a sale and investment solicitation process (SISP) order, and Ernst & Young Inc. (EY) was appointed as court-appointed monitor.
At the time of filing, the Varennes clean-fuels project remained under construction. The debtors faced multiple challenges, including major factory modules and equipment for the construction project being in transit by ship to the construction site while foreign suppliers remained unpaid. An interim funding facility provided by Investissement Québec and the Canada Infrastructure Bank, both secured creditors of VCE, allowed the implementation of a SISP to transition the project to a new owner.
On October 8, 2025, Justice Sheehan granted an application by VCE, contested by several parties, for an approval and reverse vesting order (RVO). Through the RVO, StormFisher acquired the shares of VCE to pursue the construction project at Varennes, albeit in a modified form, so as to produce green methanol using a different technology. Along with the RVO, VCE obtained a release in favour of its directors and officers, employees, and secondees; that order was appealed and was the subject of a motion for leave to appeal heard by the Court of Appeal of Québec on November 28, 2025. Separately, on June 5, 2025, VCE filed a motion to bring its pending arbitration with Proman Services Canada Inc., a limited partner of the VCE entities, under the jurisdiction of the CCAA court; on October 23, 2025, Justice Luc Morin dismissed that application.
The matter is significant for the insolvency bar: the release granted in favour of the directors and officers is one of the few instances where such a release was granted despite imminent litigation against the released parties, and the case is one of the few to apply the Supreme Court of Canada’s decision in Petrowest, as well as the only known case in which a debtor sought to bring pre-filing arbitration proceedings under the jurisdiction of the CCAA court for the benefit of its creditors.
Stikeman Elliott LLP acted as counsel to VCE with a team that included Vanessa Coiteux and Francis Blais-Lord (Corporate); Joseph Reynaud and Stéphanie Lapierre (Litigation); Nicholas Blach and Antonin Lapointe (Tax); and Michael Laskey (Regulatory). Fasken Martineau DuMoulin LLP acted for the Monitor, EY; Gowling WLG (Canada) LLP acted for the Canada Infrastructure Bank; McCarthy Tétrault LLP acted for Investissement Québec; Davies Ward Phillips & Vineberg LLP acted for the Royal Bank of Canada; Miller Thomson LLP acted for Hydro-Québec; Osler, Hoskin & Harcourt LLP acted for Proman Services Canada Inc.; Norton Rose Fulbright Canada LLP acted for Gastier; and Torys LLP acted for the purchaser, StormFisher.