Andrew Nesbitt

In an insolvency receivership involving Yorkdale leasehold interests, the court considered whether to approve a receiver-negotiated sublease entered without landlord consent and whether ancillary relief should issue.

Applying the contractual framework under the Head Lease and Commercial Tenancies Act, and considering insolvency discretion under the Bankruptcy and Insolvency Act, the court held the landlord had not unreasonably withheld consent.

The court further held that s. 84.1 of the BIA did not apply directly or by analogy to the proposed sublease structure.

On a broader stakeholder-balancing analysis, the court found unfairness in the process and insufficient commercial soundness to justify discretionary approval.

The motion to approve the new sublease was dismissed, and ancillary relief was not addressed.

In a landmark CCAA proceeding involving Hudson's Bay Company, the court declined to approve the assignment of 25 major retail department store leases across Canada to a new tenant, Ruby Liu Commercial Investment Corp., despite the transaction representing the highest bid and generating approximately $50 million in net proceeds for creditors.

The court found that the proposed assignee failed to meet the reasonableness standard under section 11.3(3) of the CCAA, particularly regarding its ability to perform the substantial and ongoing obligations under the leases.

The decision emphasizes that section 11.3 is an extraordinary power that must be exercised sparingly, and that the court must balance the interests of all stakeholders, including the contractual counterparties (landlords) who would be compelled into a long-term relationship with an untested and undercapitalized purchaser.

The court also rejected the applicants' arguments that certain lease provisions constituted ipso facto clauses violating the anti-deprivation rule and section 34 of the CCAA.

In this CCAA proceeding, the court granted multiple orders sought by Hudson's Bay Company and related entities, including approval of lease assignment agreements with YM Inc. and Ivanhoe Cambridge, sealing of confidential bid information, extension of the stay of proceedings to October 31, 2025, and approval of the Monitor's reports and activities.

The court rejected requests for adjournment and conditional distributions, finding the lease monetization process was fair and transparent, and that the proposed transactions represent a positive development for stakeholders.

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.

The court considered an application by Aggregated Investments Inc. for the appointment of a receiver over the assets of the respondents, including real property, under the Courts of Justice Act and the Bankruptcy and Insolvency Act.

The application was dismissed.

The court found that a bona fide defence existed regarding the underlying debt, specifically whether Aggregated breached its duty of good faith by accepting a reduced recovery and shifting value to a related party.

The court held that the appointment of a receiver was not just or convenient in the circumstances, given the triable issue as to the propriety of the debt and the conduct of Aggregated.

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.