Andrew J. Hatnay

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 decision addresses whether Cushman & Wakefield ULC (C&W), as real estate broker, is entitled to a commission in respect of Stelco’s purchase of the Stakeholders’ limited partnership units and other equity in the Legacy Lands LP, under the Companies’ Creditors Arrangement Act proceedings.

The court finds that C&W is not entitled to a commission, as the relevant brokerage agreements had expired or were never executed for the properties in question, and the transaction at issue was not contemplated by the commission provisions.

The court also dismisses C&W’s alternative claim for unjust enrichment.

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.

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.

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.

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 Ontario Superior Court of Justice (Commercial List) heard two motions within a long-standing Companies’ Creditors Arrangement Act (CCAA) proceeding concerning U.S. Steel Canada Inc. (now Stelco Inc.).

Stelco Inc. sought approval for a Securities Purchase Agreement (SPA) to acquire the remaining ownership interest in a Land Vehicle from various Stakeholders (employees, retirees, pensioners).

DGAP Investments Ltd., a defendant, brought a cross-motion seeking a strict timetable for the completion of a separate land sale agreement (DGAP Sale Agreement) before the SPA could close, alleging bad faith by Stelco.

The court granted Stelco's motion, finding the SPA beneficial to the Stakeholders by providing immediate monetization and extricating them from ongoing litigation.

DGAP's motion was dismissed, as the court found no evidence of bad faith by Stelco sufficient to delay the SPA, and determined that the SPA and DGAP Sale Agreement were not mutually exclusive.

The court emphasized continued judicial supervision and the Monitor's role in future transactions.

Laurentian University brought an unopposed motion within its CCAA proceedings for an order extending the stay period to September 30, 2022, and an order approving a Pension Participation Agreement with the University of Sudbury.

The court found that the applicant had acted in good faith and with due diligence, justifying the stay extension.

The court also approved the pension agreement, finding it to be a fair and reasonable settlement that provided substantial benefits to stakeholders and was consistent with the purpose of the CCAA.

In the CCAA proceedings of Laurentian University, the applicant sought an order regarding a Compensation Claims Process.

On consent, the court deferred relief related to Third Party RHBP Claims to a subsequent hearing, ordering that the deadlines and procedures in the Compensation Claims Process Order would not apply to those claims at this time.

The remaining unopposed relief was granted.

Thorneloe University sought leave to appeal a CCAA judge's decision that allowed Laurentian University to disclaim federation agreements and approved a debtor-in-possession (DIP) loan amendment.

Thorneloe argued the disclaimer would cause its insolvency, provided minimal financial benefit to Laurentian, and was motivated by anti-competition.

The Court of Appeal dismissed the leave motion, finding the proposed appeal was not prima facie meritorious, not of significance to the practice, and would unduly hinder the progress of the CCAA restructuring.

The court upheld the CCAA judge's balancing of interests under s. 32(4) of the CCAA, emphasizing the high deference owed to supervising judges in CCAA proceedings.

In the context of CCAA proceedings for Sears Canada, the Monitor brought a motion to enforce a settlement agreement with several former landlords regarding the valuation of their claims.

The landlords disputed the Monitor's calculation of their claims under the agreed Landlord Claim Formula and sought disclosure of the underlying calculations.

The court held that the landlords were entitled to the disclosure and could dispute the calculations, but only using the sources permitted by the formula.

Additionally, the court ordered one landlord, Primaris, to repay $10,000 it had unilaterally withheld for legal fees when returning a mistaken payment.

Oxford Properties Group brought a motion seeking the appointment of a specific arbitrator to determine the current value of the Newmarket Property under an option agreement.

Sears Canada Inc. and its Monitor brought a cross-motion requesting the appointment of a different arbitrator, who was already acting as a Claims Officer in the CCAA proceedings, to determine both the property's value and Oxford's related disputed claims.

The court found the issues to be inextricably linked and that separate proceedings would lead to additional cost and delay.

The court granted the cross-motion, appointing the arbitrator proposed by Sears and the Monitor to resolve all outstanding issues related to the property in a single, consolidated proceeding, thereby dismissing Oxford's motion.

Two separate representative actions were brought on behalf of approximately 800 terminated employees of bankrupt meat processing companies.

The first action (Caetano) was brought by a union representative on behalf of 700 unionized employees; the second (Abreu) was brought by non-union employees on behalf of approximately 100 non-unionized employees.

The defendants moved to stay the Caetano action on jurisdictional grounds and to strike the representative elements of both actions as statute-barred.

The motion judge stayed the Caetano action and struck the representative aspect of the Caetano action but allowed the Abreu action to proceed.

On appeal, the Court of Appeal dismissed the Caetano appeal and allowed the Abreu appeal, striking the representative aspect of the Abreu action as well.

Two separate representative actions were brought on behalf of approximately 800 terminated employees of bankrupt meat processing companies.

The first action (Caetano) was brought by a union representative on behalf of 700 unionized employees; the second (Abreu) was brought by non-union employees on behalf of approximately 100 non-unionized employees.

The defendants moved to stay the Caetano action on jurisdictional grounds and to strike the representative elements of both actions as statute-barred.

The motion judge stayed the Caetano action and struck the representative aspect of the Caetano action but allowed the Abreu action to proceed.

On appeal, the Court of Appeal dismissed the Caetano appeal and allowed the Abreu appeal, striking the representative aspect of the Abreu action as well.

A family-owned meat processing business went bankrupt, terminating approximately 800 employees.

Two representative actions were commenced: one by Sam Caetano for unionized employees and another by Debbie and Alex Abreu for non-unionized employees, alleging wrongful dismissal, common employment, conspiracy, and oppression against solvent related companies and individuals.

The defendants brought motions to stay the Caetano action for lack of jurisdiction and to dismiss both representative actions as time-barred.

The court granted the jurisdiction motion, staying the Caetano action entirely, finding that claims by unionized employees under a collective agreement fall within the exclusive jurisdiction of labour tribunals.

The court also granted in part the limitations motion, dismissing the Caetano representative action as time-barred because the required Rule 12.08 representation order was not obtained prior to commencement.

However, the Abreu representative action, brought under Rule 10.01, was found not to be time-barred, but was allowed to proceed only on the condition that the plaintiffs forthwith obtain a representation order.

The moving parties sought leave to appeal a CCAA judge's decision dismissing their motion to reinstate other post-employment benefits (OPEBs) to retirees of U.S. Steel Canada Inc. The CCAA judge had dismissed the motion but ordered a one-time payment of $2.7 million towards benefits.

The Court of Appeal applied the stringent test for leave to appeal in CCAA proceedings and found no prima facie merit to the appeal.

The court emphasized the broad discretion of the CCAA judge and the fact-specific nature of the decision, which did not raise issues of significance to insolvency practice.

Leave to appeal was denied with costs fixed at $2,500.

The applicant, U.S. Steel Canada Inc. (USSC), sought approval for a second key employee retention plan (KERP 2), while a group of unions and representative counsel (Moving Parties) sought an order to terminate the suspension of other post-employment benefits (OPEBs).

The court granted the KERP 2 motion, finding it fair and reasonable for business stability and restructuring efforts.

The OPEB motion was denied, as the court found no fundamental improvement in USSC's profitability to warrant OPEB reinstatement, and that USSC's proposed one-time contribution of $2.7 million to a transition fund for retired employees appropriately balanced competing interests during the ongoing sales and investor solicitation process (SISP).

The applicants (Representative Counsel for non-unionized employees and retirees, USW Locals 1005 and 8782, and the City of Hamilton) sought "for counsel's eyes only" disclosure of a confidential settlement agreement between United States Steel Corporation (USS), U.S. Steel Canada Inc. (USSC), and the Government of Canada.

The motion was brought in the context of CCAA proceedings, with applicants arguing procedural fairness and a minor exemption from settlement privilege.

The court dismissed the motion, finding that the applicants failed to demonstrate how they would be prejudiced without access to the specific details of the undertakings in the agreement, or how the information was material to their claims or negotiations.

The court emphasized that there is no exemption from settlement privilege for the purpose of reviewing a document to determine if a public interest exists that would displace the privilege.