A notice arrived by registered mail at the offices of a wholesale food and beverage distributor operating out of a warehouse facility in the Edmonton area. The notice announced that a retail grocery chain—the distributor's largest single customer, accounting for approximately 35 percent of its annual revenue—had filed an assignment in bankruptcy under the Bankruptcy and Insolvency Act. The distributor, a privately held corporation with 22 employees that had operated for 14 years, was owed $287,000 for product delivered over the preceding 90 days on standard net-30 payment terms. The owner, who had built the business from a single delivery van into a regional operation serving independent grocers and small chains across central Alberta, now faced the question of what this bankruptcy filing meant for the money owed and for the survival of the distribution business itself.

The relationship between the distributor and the retail chain had developed over 6 years, beginning with modest orders and growing steadily as the chain expanded from 4 locations to 11. Payment had historically been reliable, though in the 8 months before the bankruptcy filing, the chain had begun stretching its payment terms, with invoices regularly settling at 45 or 60 days rather than the contractual 30. The distributor had continued shipping product despite these delays, partly because the volume of business made the chain difficult to replace and partly because the chain's management had repeatedly assured the owner that cash flow difficulties were temporary and tied to expansion costs. No formal security interest had ever been registered against the chain's assets in the distributor's favour, and the goods supplied—perishable food products—had long since been sold through the chain's retail locations.

The trustee appointed to administer the bankruptcy had set a deadline for creditors to file proofs of claim. The distributor's owner had gathered invoices, delivery receipts, and correspondence documenting the amounts owed, but questions remained about whether any portion of the debt might qualify for priority treatment and what realistic recovery might look like given the chain's apparent lack of significant assets beyond leasehold improvements and inventory already subject to bank security. Meanwhile, the distributor's own accounts payable were mounting, and suppliers upstream had begun asking questions about payment. The owner needed to understand the federal insolvency framework, the hierarchy of claims, the mechanics of proving a debt, and the practical steps available to protect what remained of a business suddenly exposed by the failure of its largest customer.