Abir Shamim

The decision addresses motions regarding the appointment of representative counsel for current and former employees and retirees of Hudson’s Bay Company ULC and related entities in ongoing Companies’ Creditors Arrangement Act (CCAA) proceedings.

The Court declined to appoint any of the nominated law firms as representative counsel at this stage, instead appointing the Honourable Herman Wilton-Siegel as an independent third party to evaluate proposals and make a recommendation.

The Court also approved amendments to the Sale and Investment Solicitation Process (SISP) to remove the company’s art and artifact collection from the SISP and to appoint Heffel Gallery Limited to conduct a separate auction for the collection, subject to further court approval of procedures.

The reasons review the legal framework for appointing representative counsel and the importance of balancing stakeholder interests in complex insolvency proceedings.

This endorsement grants a brief adjournment in the Companies’ Creditors Arrangement Act (CCAA) proceedings involving Hudson’s Bay Company ULC and related entities, following ongoing discussions between the applicants and stakeholders.

The court extends the stay of proceedings, increases the Directors’ Charge, amends the relative priorities of charges, and approves the engagement of Reflect Advisors, LLC as financial advisor.

The court finds the requested relief appropriate, unopposed, and supported by the Monitor, and orders the requested amendments to the Initial Order.

The Body Shop Canada Limited (TBS) brought a motion seeking an extension of the Companies' Creditors Arrangement Act (CCAA) stay, a declaration that the UK Purchaser is a critical supplier, the granting of a critical supplier charge over inventory up to $1.5 million, and approval of charge priorities.

The Court-appointed Monitor supported the relief.

Certain terminated employees did not oppose the relief but requested a shorter stay extension and information for a liquidation analysis to explore WEPPA benefits.

The court granted all relief sought by TBS, finding the UK Purchaser to be a critical supplier essential for TBS's continued operations and the ongoing sale process.

The critical supplier charge was deemed appropriate and non-prejudicial.

The requested stay extension was found reasonable and necessary, and the employees' request for a shorter extension and liquidation analysis was denied as inappropriate at this stage.

Representative Counsel for Non-Union Employees and Retirees sought approval for $200,000 in additional costs, including legal fees and financial advisor costs, to be paid from distributions to employees and retirees in the Metroland Media Group Ltd. proposal.

The request was unopposed by the Proposal Trustee and supported by the affected stakeholders.

The court, exercising its discretion under section 197(1) of the Bankruptcy and Insolvency Act, approved the costs, finding them reasonable based on factors such as the extensive activities undertaken and the fact that the costs were paid by the employees themselves, causing no prejudice to other creditors.

The Body Shop Canada Limited (TBS Canada) brought a motion seeking three orders: authorization to continue its Bankruptcy and Insolvency Act (BIA) proposal proceeding under the Companies' Creditors Arrangement Act (CCAA), approval of a Sale and Investor Solicitation Process (SISP), and a Discharge and Termination Order for the Proposal Trustee.

The court granted all requested relief, finding that the conversion to CCAA was appropriate given the company's insolvency, the ongoing UK sale process for its parent company, and the CCAA's flexibility to maximize stakeholder value and preserve the going concern.

The court also approved the SISP, the continuation of existing charges (administration, D&O, KERP), and the fees and releases for the Proposal Trustee and counsel.

A former employee of The Body Shop Canada Limited brought a motion in the company's bankruptcy proceedings seeking to be appointed as the Representative for all terminated Canadian employees, and to have her counsel appointed as Representative Counsel.

The moving party sought an order that included a mandatory opt-out mechanism and broad immunity from liability for the Representative and Representative Counsel.

The court dismissed the motion, finding that the claims of the terminated employees were relatively straightforward, the class was small and easily identifiable, and the proposed opt-out mechanism and broad immunity were inappropriate in the circumstances.

The plaintiffs in a putative class action sought leave to discontinue the action under s. 29 of the Class Proceedings Act, 1992, with the defendants' consent.

The action alleged Bell Canada miscalculated a 1998 cost-of-living allowance (COLA) increase for pensioners.

This issue was resolved through an "Action Plan" negotiated between Bell and the Office of the Superintendent of Financial Institutions (OSFI), resulting in approximately $84.2 million in retroactive payments to affected pensioners.

The court found the action moot and granted leave to discontinue, approving the proposed notice plan, as the discontinuance would not prejudice the putative class members.

This motion concerned the interpretation of the Wage Earner Protection Program Act (WEPPA) regarding Service Canada's subrogation rights to recover payments made to employees from an insolvent employer's distribution.

Metroland Media Group Ltd. made a proposal to its creditors, entitling unsecured creditors to a 17% distribution.

Service Canada had approved payments to former non-unionized employees under WEPPA for unpaid severance pay.

The issue was whether Service Canada was entitled to recover these payments on a dollar-for-dollar basis from the employees' distribution or only a pro-rata share (17 cents on the dollar) as an unsecured creditor.

The court held that Service Canada is entitled to a dollar-for-dollar recovery, up to the amount of the WEPP payment, from the employee's distribution before the employee receives any balance.

The moving party sought an order appointing Representative Counsel and a Non-Union Employee Representative for non-unionized employees terminated by the debtor following its Notice of Intention to Make a Proposal under the BIA.

The motion was unopposed and supported by the debtor and the Proposal Trustee.

Applying the CanWest factors, the court found the non-union employees to be a vulnerable group requiring representation to advance their claims.

The court granted the order, finding it would benefit all stakeholders by streamlining the claims process and avoiding a multiplicity of legal retainers.

DGAP Investments Ltd. sought a stay pending leave to appeal an order from the supervising judge in a CCAA proceeding.

The order authorized Stelco Inc. to acquire partnership units in a Land Vehicle, which DGAP argued would obstruct its prior agreement to purchase land from the Land Vehicle.

The Court of Appeal applied the RJR-MacDonald test for a stay, finding that DGAP's case for leave to appeal was weak on the merits, there was no irreparable harm given the supervising judge's measures to protect DGAP's interests, and the balance of convenience favoured dismissing the stay to allow the CCAA proceeding to conclude and benefit aging stakeholders.

The motion for a stay was dismissed, and the leave to appeal motion was expedited.

The appellant's property was sold under power of sale.

She initiated an action alleging conspiracy to defraud and moved to set aside the sale, claiming fraud and improvidence.

The motion judge dismissed all claims except for an accounting by the mortgagee.

The Court of Appeal dismissed the appeal, finding no direct or circumstantial evidence of fraud, and that the sale was not improvident, especially considering the appellant's history of default and delay.