Alan Mersky

In CCAA proceedings involving a large telecommunications company, the applicants sought authorization to cease environmental remediation work at several contaminated sites and to have regulatory remediation orders treated as claims within the insolvency process.

The provincial environmental regulator argued that its orders imposed regulatory performance obligations rather than monetary claims and therefore should not be stayed by the insolvency proceedings.

The court held that where a debtor is no longer operating and compliance with regulatory orders necessarily requires the expenditure of funds, such orders are in substance financial obligations.

The court concluded that environmental remediation orders relating to pre‑filing contamination constituted claims subject to the CCAA claims process and were stayed by the existing stay of proceedings.

The applicants were authorized to cease remediation activities and environmental claims were directed to be resolved through the established claims procedure.

The appellants, representing unionized and non-unionized former employees of Nortel, appealed a decision dismissing their motions for directions to compel Nortel to pay severance, termination, and retirement benefits during its CCAA restructuring.

The appellants argued that the payments were protected under s. 11.3(a) of the CCAA as compensation for ongoing services, and that the CCAA stay could not override provincial Employment Standards Act obligations.

The Court of Appeal dismissed the appeals, holding that the payments were for past services and that the doctrine of federal paramountcy allowed the CCAA stay to suspend the immediate payment obligations under the provincial legislation to facilitate the restructuring.

The appellant appealed the dismissal of its motion under Rule 45.02 for an order preserving a sum of money held as cash collateral.

The appellant argued that its obligations under a Letter of Credit Agreement were discharged because the respondent entered into a forbearance agreement with the principal borrower, materially altering the guaranteed loan.

The Divisional Court dismissed the appeal, finding that the agreement was for a standby letter of credit, not a guarantee, and thus the law of guarantees did not apply.

Furthermore, the cash collateral was not a specific fund to which the appellant had a proprietary claim, and the appellant had implicitly ratified the forbearance agreement by participating in the borrower's insolvency proceedings without objection.

In a CCAA proceeding, the appellant sought to enforce a Memorandum of Agreement to purchase the debtor's assets after missing a deadline.

The motion judge found the agreement had expired.

The respondents moved to quash the appeal on the basis that leave was required under s. 13 of the CCAA.

The Court of Appeal held that leave was required because the order was made under the CCAA.

The Court dismissed the appellant's cross-motion for leave to appeal, finding no basis to interfere with the motion judge's findings on expiration and estoppel, and concluding the proposed appeal lacked significance to the practice.