Arthur O. Jacques

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 ongoing proceedings under the Companies’ Creditors Arrangement Act, the applicants sought approval of an Employee Hardship Application Process and an extension of the stay of proceedings.

The requested hardship process was unopposed and approved.

Certain noteholders sought conditions requiring enhanced reporting and procedural safeguards in relation to the claims process and employee claims.

The court held that the statutory test under s. 11(6) of the CCAA was satisfied because the circumstances warranted the extension and the applicants had acted in good faith and with due diligence.

The stay extension was granted, while proposed procedural changes to the claims process were found more appropriately addressed through a motion to vary existing orders.

The moving party sought leave to appeal an order sanctioning the monitor's methodology for distributing funds in Nortel's Health and Welfare Trust under the CCAA.

The Court of Appeal dismissed the motion, finding that the interpretation of the specific termination clause was not of significance to the practice, the appeal was not prima facie meritorious, and granting leave would unduly hinder the progress of the restructuring.

Costs were awarded to the Monitor.

The moving parties, Objecting LTD Beneficiaries, sought an order expediting their motion for leave to appeal and consolidating the leave motion with the appeal itself.

The responding parties consented to expediting the leave motion but opposed consolidation.

The court agreed with the responding parties, finding no urgency requiring consolidation as benefits continued until the end of the year.

A schedule for the expedited leave motion was approved.

The appellants appealed an order annulling their assignments into bankruptcy under s. 181 of the Bankruptcy and Insolvency Act.

The motion judge had found that the assignments were filed without obtaining leave as required by a prior receivership order.

The Court of Appeal upheld the decision, finding that an assignment in bankruptcy constitutes a 'proceeding' under the prior order and that the leave requirement did not offend the doctrine of federal paramountcy.

The appeal was dismissed.