A. Slavens

Following the successful dismissal of a motion to approve a settlement agreement in CCAA proceedings, the successful lien claimants sought costs against the applicants, Tarion, and the applicants' shareholder.

The court declined to award costs against Tarion because the lien claimants failed to provide adequate prior notice of their intention to seek costs against it.

However, the court awarded costs against the applicants' estate, reasoning that the estate and its creditors benefited from the lien claimants' successful opposition, which preserved security funds.

Costs were fixed at $35,000 total on a partial indemnity basis, payable only to the extent the applicants actually receive the benefit of the security.

In a bankruptcy proceeding, the trustee sought an order permitting employees and retirees of the bankrupt corporation who were creditors to nominate and vote on the election of inspectors at the first meeting of creditors.

Section 113(3) of the Bankruptcy and Insolvency Act generally prohibits employees from voting on the appointment of inspectors unless the court grants permission.

The court considered the circumstances, including that employee severance claims and pension deficit claims constituted a substantial portion of the unsecured creditor claims and that no party opposed the request.

The court concluded it was fair and appropriate to allow employees and retirees who were creditors to participate in the election of inspectors, subject to the standard requirements for filing proofs of claim and vote counting under the Act.

The applicant secured creditor moved to lift a stay of proceedings under the Companies’ Creditors Arrangement Act in order to appoint a receiver over insolvent debtor corporations.

The evidence showed that the court-approved sales process had collapsed, further DIP funding was unavailable after a sales process default, and the debtor companies’ board of directors had resigned, leaving operations effectively shut down.

The monitor supported the motion and no party opposed it.

Applying principles governing the lifting of a CCAA stay, including prejudice to stakeholders and the likelihood that the restructuring would fail, the court concluded that receivership was necessary to stabilize the situation and preserve asset value.