Andrew J. F. Kent

The Moving Parties (First Nations and Municipalities) sought to stay the implementation of a $150 million settlement between Purdue Canada and Canadian Governments, arguing it might be unlawful, prejudicial, preferential, or an abuse of process, and sought financial disclosure from Purdue Canada.

The court dismissed the motion, finding it lacked a basis to compel disclosure or stay the settlement.

The court affirmed its jurisdiction over Purdue Canada was limited to the CCAA recognition proceedings, not general supervision, and found no evidence of bad faith or insolvency to warrant the requested orders.

The Plaintiffs (Bondfield Construction Company Limited and Zurich Insurance Company Ltd.) brought a motion to stay summary judgment motions initiated by PricewaterhouseCoopers LLP (PwC) in complex professional negligence actions against auditors, which also involved significant fraud allegations and discoverability issues.

The court, acting as case management judge, granted the stay, determining that full documentary and oral discoveries were essential to ensure a fair and efficient process.

The decision highlighted the complexity of the case, the substantial damages sought, the allegations of long-standing fraudulent activities, and the potential for inconsistent findings if the summary judgment motions proceeded on a limited record.

The court emphasized the flexibility of judges in case-managed matters and the necessity of a comprehensive record for a just adjudication of limitation period issues.

The Receiver brought a motion to extend the appointment of limited partner advisory committees, approve its activities, and approve a process for appointing Representative Counsel for the Unitholders.

The Ad Hoc Committee of Retail Investors raised concerns about the independence of the proposed appointment process.

The court approved the Receiver's activities and the extension of the committees, but modified the Representative Counsel appointment process to include an independent third party to evaluate proposals and make a recommendation to the court.

The Receiver brought a motion for an order approving a proposed sale and investment solicitation process (SISP) and authorizing the disclosure of Borrower Information to Qualified Bidders.

The court found that the proposed SISP satisfied the test for approval, as it was fair, transparent, and optimized the chances of securing the best price.

The court also authorized the disclosure of Borrower Information, finding that the best interests of investors could be jeopardized without such disclosure, and noting that all borrower concerns had been resolved and confidentiality obligations would apply to bidders.

The motion was granted.

The applicants, a group of Essar Steel Algoma entities under CCAA protection, moved for court approval of a Term Sheet with Cliffs Mining Company for the supply of iron ore pellets.

The motion was opposed by USW Locals and Algoma retirees, who sought disclosure of commercial terms and objected to provisions preventing disclaimer of the agreement and allowing Cliffs to terminate if an Essar Global entity acquired Algoma.

The court approved the Term Sheet, finding it beneficial for Algoma's restructuring by ensuring a stable and technically suitable iron ore supply.

The court dismissed the objections, emphasizing the urgency of approval, the confidentiality of pricing, and that the Term Sheet's provisions did not unlawfully fetter judicial discretion under CCAA section 32 or unduly prejudice stakeholders.

The Nortel group of companies filed for insolvency protection across multiple jurisdictions.

Following the sale of Nortel's assets, approximately $7.3 billion was placed in escrow.

The trial judge ordered that these lockbox funds be allocated on a pro rata basis among the various debtor estates, finding that Nortel operated as a highly integrated multinational enterprise and that the master research and development agreement did not govern allocation upon insolvency.

Several parties sought leave to appeal under the Companies' Creditors Arrangement Act.

The Court of Appeal denied leave, finding that the proposed appeals were not prima facie meritorious, did not raise issues of significance to the practice, and would unduly hinder the progress of the proceedings.

In a CCAA restructuring proceeding, the moving parties (Cliffs) brought a motion objecting to the jurisdiction of the Ontario Superior Court to hear a dispute over a terminated iron ore supply contract.

Cliffs argued that the contract was governed by Ohio law and that Ohio was the convenient forum.

The court dismissed the motion, finding that it had jurisdiction simpliciter because the contract was made in Ontario and Cliffs carried on business in Ontario.

Applying the single control model for insolvencies, the court held that the dispute should be resolved within the CCAA proceedings.

The court also found that Cliffs failed to establish that Ohio was clearly a more appropriate forum.

The appellants, holding unsecured crossover bonds, appealed a CCAA judge's decision that the common law 'interest stops' rule applies in CCAA proceedings, preventing them from claiming post-filing interest above their principal debt and pre-petition interest.

The Court of Appeal dismissed the appeal, confirming that the 'interest stops' rule is a fundamental tenet of insolvency law that applies to CCAA proceedings to ensure fair treatment of creditors and orderly administration.

The Court clarified that while creditors cannot legally claim post-filing interest, the rule does not preclude a negotiated CCAA plan from providing for such payments.

The Court of Appeal issued an addendum to correct an error in paragraph 11 of its reasons for judgment released on November 17, 2005.

The court amended the reasons to replace the reference to 'Subordinated Debenture Holders' with 'Senior Debt Holders' in the first two sentences of the paragraph.

In a CCAA restructuring of Stelco Inc., the appellants, representing subordinated debenture holders, sought to be classified as a separate class of creditors for voting purposes on the proposed plan.

They argued their interests conflicted with senior debt holders due to a turnover payment provision requiring them to remit distributions to senior debt holders until the senior debt was paid in full.

The supervising judge dismissed the motion, finding no material distinction in their legal rights vis-à-vis the debtor company.

The Court of Appeal granted leave but dismissed the appeal, affirming that creditor classification under the CCAA is determined by the creditors' legal rights in relation to the debtor company, not their rights as creditors in relation to each other.