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The Fruit & Vegetable Dispute Resolution Corp., based in Ottawa, ON, issued a notice to its members June 9 advising that Deloitte & Touche Inc. in Windsor, ON, has been appointed receiver of Red Zoo Marketing, headquartered in Kingsville, ON.

Fred Webber, vice president of trading assistance at the DRC, told The Produce News that under Canadian law, receivership is much like a bankruptcy in the United States.

"During the receivership process, creditors cannot sue or try to collect from the company," explained Mr. Webber. "They must sit back and wait for the process to unfold. We don't know at this time if Red Zoo will file a full bankruptcy, [similar to] Chapter 7 bankruptcy law in the U.S., or if it will reorganize, which is a process similar to Chapter 11 bankruptcy."

Mr. Webber said that the bankruptcy level will not be known until Red Zoo's assets and liabilities are sorted.

Jay Colasanti, president and co-owner of Red Zoo, told The Produce News last month that his company was not planning to file for bankruptcy protection. "Our intentions are not to file for bankruptcy," he said in a May 12 interview. "We have, however, ceased functioning in normal trade. We are not producing, sourcing from grower-partners or marketing at the moment."

Telephone calls to both Mr. Colasanti and Deloitte & Touche were not returned by this publication's deadline.

Mr. Webber said that Red Zoo's financial situation in no way implies that the Ontario -- or Canadian -- greenhouse industry is in financial distress.

Jim DiMenna, president of Jem-D International, a major distributor of greenhouse produce headquartered in Leamington, ON, concurred with Mr. Webber.

"Red Zoo's financial situation is certainly not an indication of a financial crisis trend in Canada," said Mr. DiMenna. "The entire Canadian greenhouse industry, including Ontario, is a very viable and solid industry. We have managed to grow efficiently and with sound volumes to turn high-quality, premium greenhouse produce into a competitively priced mainstream category that consumers throughout North America seek out for purchasing."

Mr. DiMenna added that consumer demand for greenhouse produce continues to increase.