Ashley John Taylor

In CCAA proceedings, the debtor companies sought approval of a debtor-in-possession (DIP) financing facility and a super-priority DIP lenders’ charge ranking ahead of other encumbrances, including potential pension-related claims.

Two unions opposed the motion, arguing that granting super priority would undermine fiduciary duties owed to pension plan beneficiaries and that the evidentiary record was insufficient to justify the relief.

The court held that the statutory requirements under s. 11.2 of the Companies’ Creditors Arrangement Act were satisfied and that DIP financing was necessary to maintain operations and conduct a sales or restructuring process.

Applying the doctrine of federal paramountcy, the court found that the CCAA could override conflicting provincial pension legislation where necessary to avoid bankruptcy and facilitate restructuring.

The DIP facility and super-priority charge were approved.

The applicants, Timminco Limited and Bécancour Silicon Inc., sought orders in their CCAA proceedings to suspend special payments to their pension plans, grant super priority to Administration and D&O Charges over provincial pension deemed trusts, approve Key Employee Retention Plans (KERPs), and seal the KERP details.

The unions opposed the super priority and suspension of pension payments, arguing it violated provincial pension legislation and fiduciary duties.

The court granted the motion, applying the doctrine of paramountcy to find that enforcing the provincial pension obligations would force the companies into bankruptcy and frustrate the CCAA restructuring.

The court also approved the KERPs and sealed the confidential supplement.

The applicants, Timminco Limited and Bécancour Silicon Inc., sought initial protection under the Companies' Creditors Arrangement Act (CCAA) due to severe liquidity issues and an inability to meet financial obligations.

The court found the applicants to be insolvent debtor companies and granted the initial CCAA order.

The court also extended the stay of proceedings to certain directors, officers, and specific partnership agreements, and approved an Administration Charge of $1 million and a Directors' and Officers' Charge of $400,000.

The interim receiver of a bankrupt company sought to distribute funds from operating assets to a secured creditor.

The pension plan administrator opposed, claiming priority under a statutory lien for unpaid pension contributions pursuant to s. 57(5) of the Pension Benefits Act.

The Ministry of the Environment also opposed, arguing funds should be retained for environmental remediation.

The Court of Appeal dismissed both appeals, holding that the pension administrator is not a secured creditor under the Bankruptcy and Insolvency Act because the unpaid contributions are not a debt due to the administrator.

The Court also held that the MOE was an unsecured creditor regarding the operating assets and that the BIA's specific provisions for environmental claims governed.

The appellants appealed a motion judge's order calculating the Amended DIP Deficiency in a CCAA proceeding.

They argued that an Accommodation Agreement required the respondents to contribute up to $2,000,000 of the deficiency before recourse could be had to the appellants' collateral.

The Court of Appeal dismissed the appeal, finding that the Accommodation Agreement did not require the respondent to forego recovery of its responsible amount and that it was entitled to look to the collateral held by the first secured creditors without first foregoing $2,000,000 of the money advanced pursuant to the DIP Facility.

The appellants appealed a trial judgment finding that a transaction between the bankrupt company and its subsidiaries was a reviewable transaction under s. 100 of the Bankruptcy and Insolvency Act and constituted oppression under s. 248 of the Business Corporations Act.

The trial judge found a conspicuous difference between the fair market value of the promissory note given up by the bankrupt and the shares it received.

The Court of Appeal dismissed the appeal, finding no palpable and overriding error in the trial judge's factual findings regarding fair market value, and holding that the trial judge properly exercised his discretion in allowing the trustee in bankruptcy to act as a complainant for the oppression remedy.

The Court of Appeal for Ontario issued a costs endorsement following an appeal.

Costs were awarded to the respondent, Air Canada, against the appellant, Global Payments Canada Inc., on a partial indemnity basis fixed at $46,000 inclusive of disbursements and GST.

The Court of Appeal for Ontario issued an endorsement regarding the costs of an appeal in the context of Companies' Creditors Arrangement Act proceedings involving Air Canada.

The court awarded costs to the respondent, Air Canada, against the appellant, Global Payments Canada Inc., on a partial indemnity basis fixed at $46,000 inclusive of disbursements and GST.

Air Canada applied for relief under the Companies' Creditors Arrangement Act.

The initial stay order required the appellant to continue providing credit card processing services to the respondent.

The appellant appealed, arguing the order violated s. 11.3(b) of the CCAA by requiring a further advance of money or credit due to its exposure to chargebacks.

The Court of Appeal dismissed the appeal, finding that the risk of chargeback exposure was a contingent liability, not an extension of credit, and that receiving immediate payment for future services did not constitute a further advance of money or credit.

The applicants, franchisees of the respondent debtor company, sought leave to appeal an order sanctioning a Plan of Arrangement under the CCAA.

They sought to introduce fresh evidence alleging that they had over-contributed to the national advertising fund compared to other franchisees, giving them a claim for unjust enrichment that they were unaware of during the claims process.

The Court of Appeal dismissed the application, finding that the fresh evidence did not meet the due diligence requirement for admission, as the differential treatment had been disclosed in the debtor's materials.

Furthermore, the applicants failed to meet the stringent test for granting leave to appeal in CCAA proceedings, as they offered no alternative plan and there was no evidence the sanctioned plan was unfair or unreasonable.