Alexandra Teodorescu

The court-appointed receiver of a partnership brought a motion seeking expanded investigative powers to examine a partner and two former employees under oath regarding potential insider transactions.

The partner opposed the motion and brought a cross-motion for production of the receiver's investigative materials.

The court granted the receiver the power to examine the partner, limited to transactions within two years of the receivership, finding it just and convenient to investigate the concerns.

However, the court denied the request to examine the former employees as premature, requiring the receiver to exhaust ordinary investigatory tools first.

The partner's cross-motion was dismissed, and the receiver's fees and activities were approved.

The moving party, a shareholder and creditor in CCAA proceedings, sought to vary a prior order requiring him to post security for costs before proceeding with a motion.

He argued that new facts had arisen regarding a promissory note issued during the proceedings.

The court dismissed the motion, finding that the evidence relied upon was either available at the time of the original hearing or could have been discovered with reasonable diligence, and would not have probably affected the result.

The court also declined to exercise its discretionary authority under section 11 of the CCAA, noting that reopening a final order would encourage litigation by installment.

The interim receiver sought an order to release holdback funds totaling $449,881.87 to be added to the proposal fund for distribution among creditors.

The respondent claimed the funds based on a mortgage that had been discharged and alternatively sought a constructive trust.

The court found that the mortgage constituted both a fraudulent conveyance under the Fraudulent Conveyances Act and an unjust preference under the Assignments and Preferences Act.

The court dismissed the respondent's motion and granted the interim receiver's motion, allowing the holdback funds to be distributed to creditors in accordance with the approved proposal.

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.

This supplementary endorsement addresses a request from JTI-Macdonald Corp. regarding the adequacy of notice elements in the Claims Procedure Order within the ongoing Companies' Creditors Arrangement Act (CCAA) proceedings.

The court confirmed its satisfaction that the notice elements in the Claims Procedure Orders are reasonable in the circumstances, addressing an oversight from previous submissions.

The Superior Court of Justice addressed multiple motions within the complex Companies’ Creditors Arrangement Act (CCAA) proceedings of JTI-Macdonald Corp., Imperial Tobacco Canada Limited, Imperial Tobacco Company Limited, and Rothmans, Benson & Hedges Inc. The court granted a stay extension until January 31, 2025, and approved Meeting Orders and Claims Procedure Orders.

These orders facilitate the advancement of comprehensive Plans of Arrangement, developed by the court-appointed Mediator and Monitors, aiming for a Pan-Canadian global settlement of tobacco claims totaling $32.5 billion.

The court found the plans were not "doomed to fail" despite outstanding issues regarding financial allocation among the Tobacco Companies and the creditor status of JTI-Macdonald TM Corp.

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 Thomas Canning Claimants appealed two procedural decisions by the Claims Officer in the Bridging Finance Inc. receivership, which denied their requests for extensive pre-hearing disclosure of documents from the Receiver and examinations of third-party witnesses.

The Claimants argued these denials were procedurally unfair and prioritized expediency over their disclosure rights.

The court dismissed the appeal, finding the Claims Officer's decisions were discretionary case management orders entitled to deference, and that no palpable and overriding error or failure of natural justice occurred.

The court emphasized that receivership claims processes are intended to be expeditious and summary, unlike normal civil litigation.

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 brought a motion for leave to appeal an order dated November 25, 2021.

The Divisional Court dismissed the motion for leave to appeal and ordered the moving party to pay costs of $5,000 to the responding parties.

The defendant/plaintiff by counterclaim, Dr. Eric Owens, brought a motion seeking leave to amend his amended statement of defence and counterclaim to include claims for negligence, negligent misrepresentation, and increased damages of $8 million.

The plaintiff/defendant by counterclaim, Navigator Limited, opposed, arguing that the proposed amendments introduced new causes of action after the expiry of the applicable limitation period and that the increased damages claim was not tenable in law due to contractual limitation clauses.

The court granted Dr. Owens leave to amend, finding that the proposed claims arose from the same factual matrix as the original pleadings and were clarifications or alternative remedies, not new causes of action.

The court also determined that the applicability and effect of the contractual limitation of liability clauses should be assessed at a hearing on the merits, not at the pleadings stage.