Caitlin Fell

On a CCAA motion, the moving parties sought approval of a reverse vesting transaction and ancillary relief following a court-approved SISP with a stalking horse credit bid.

The court applied the s. 36(3) criteria and found the process was transparent, adequately marketed, monitor-supervised, and fair and reasonable in the circumstances.

The court accepted the monitor’s evidence that a going-concern outcome would produce materially better stakeholder outcomes than liquidation and would preserve enterprise value while reducing restructuring costs.

Applying the Harte Gold framework, the court held the reverse vesting structure was necessary, economically superior to viable alternatives, non-prejudicial to stakeholders relative to alternatives, and reflective of fair value for preserved intangibles.

The motion was granted and both the Reverse Vesting Order and Ancillary Order were approved.

The court was asked to decide between the debtors’ application for protection under the Companies' Creditors Arrangement Act (CCAA) and the Toronto-Dominion Bank’s application for the appointment of a receiver.

After reviewing the facts and arguments, the court concluded that it was most just and convenient to appoint a receiver, dismissing the CCAA application.

The decision reviews the history of the debtors’ restructuring efforts, the positions of the parties, and the legal principles governing the choice between CCAA and receivership, ultimately finding that the interests of the senior secured creditor should prevail in the circumstances.

The applicants, a group of companies undergoing CCAA proceedings, sought to extend the existing stay of proceedings to DAK Capital Inc., a non-debtor third-party guarantor involved in an arbitration with Canopy Growth Corporation.

Canopy opposed, arguing that CCAA s. 11.04 prohibits such an extension for guarantors.

The court, relying on the broad inherent jurisdiction under CCAA s. 11 and recent Ontario precedents, found that s. 11.04 is a clarifying provision, not a prohibitive one, and granted the temporary stay against DAK Capital to prevent distraction from the ongoing restructuring efforts.

In a CCAA proceeding, the Applicants sought three orders: approval of a factoring portfolio purchase agreement, approval for distribution of proceeds from a property sale, and permission for a creditor to sell certain vehicles.

The court approved the distribution of Chehalis property proceeds to Roynat.

For the Regions vehicles, the court granted the order allowing Regions to take possession, setting a 30-day retrieval period and approving storage costs of $35/day.

The motion for approval of the JD Factors Purchase Agreement was adjourned to a later date, as Mitsubishi HC Capital Canada Inc. objected, claiming ownership of the receivables and requiring more time to prepare its position.

The Applicants, Fresh City Farms Inc. and Mama Earth Organics Inc., sought approval for a reverse vesting order related to a share subscription agreement with their DIP Lender, who was also the proposed purchaser.

This transaction aimed to preserve the business as a going concern, including non-transferable assets like tax losses and licenses, after an unsuccessful Sale and Investor Solicitation Process (SISP).

The motion also sought third-party releases, an extension of the stay period, approval of the Monitor's reports and fees, and an order compelling Stripe Payments Canada, Ltd. to remit withheld funds.

The court granted all requested relief, finding the transaction fair and reasonable, the reverse vesting structure appropriate given the circumstances (highly regulated environment, non-transferable assets), and the releases justified.

The court also found Stripe's withholding of funds to be in breach of the initial order and critical to the applicants' cash flow, ordering their remittance.

In a CCAA restructuring proceeding, the applicant debtors brought a motion to extend phase 2 of the Sale and Investment Solicitation Process (SISP), increase the DIP loan limit, approve a Key Employee Retention Plan (KERP), and extend the stay of proceedings.

The primary secured creditor opposed the motion, arguing the debtors had already had their chance at restructuring.

The court balanced the potential prejudice to the secured creditor against the public interest in preserving jobs and the debtors' role in serving remote communities.

The court granted partial relief, approving a modest DIP loan increase of $170,000, a KERP of $70,000, and a shorter SISP extension to March 21, 2023, while denying the stay extension at this time.

The court-appointed receiver brought a motion for an approval and vesting order (AVO) to sell a real estate development property to a third-party purchaser.

A second mortgagee and joint venture participant brought a cross-motion to redeem the property or, alternatively, for approval of its credit bid.

The court dismissed the cross-motion, finding that allowing a redemption after a court-approved sale process had concluded would undermine the integrity of the process.

The court granted the receiver's motion, holding that the proposed sale satisfied the Soundair principles, as the receiver acted providently, considered all stakeholders' interests, and conducted a fair and commercially efficacious process.

The applicants, operating an aircraft maintenance business in Northern Ontario, sought an initial order under the CCAA due to financial distress exacerbated by the COVID-19 pandemic.

The court granted the initial order, including a 10-day stay of proceedings, approval of a $600,000 DIP loan, an administration charge, and a directors' charge.

The court also appointed MNP as Monitor, permitted payment of pre-filing amounts to critical suppliers, and granted a sealing order for confidential appraisals to preserve value during the restructuring process.

The Bondfield Group, a major construction company, sought CCAA protection due to insolvency, over $1 billion in active contracts, and over 200 lawsuits.

The application was unopposed and resulted from extensive stakeholder negotiations.

The court granted an initial order for CCAA protection, including a stay of proceedings, approval of a tailored $8 million Debtor-in-Possession (DIP) facility funded by Zurich Insurance, an Administration Charge for professional fees, and a Directors' Charge for $3 million (excluding John Aquino).

The court emphasized the public interest in completing critical infrastructure projects and the preference for CCAA over receivership to preserve enterprise value.

The applicants, first mortgage holders, sought an order for three months' interest under s. 17 of the Mortgages Act or their mortgage terms, after their mortgaged properties were sold by a court-appointed receiver.

The court dismissed the application, holding that s. 17 does not apply to payments of sale proceeds by a court-appointed receiver to a secured creditor.

A receiver is not a "person entitled to make such payment" under s. 17, nor is it an agent of the debtor or subsequent mortgagee.

The court found no material distinction between private and court-appointed receivers for the purpose of s. 17, emphasizing the provision's historical intent to protect mortgagors seeking relief from forfeiture, not to benefit mortgagees realizing on security.

This decision addresses the costs arising from a receivership application, specifically motions to approve an asset purchase agreement and a cross-motion to postpone the sale.

The court awarded substantial indemnity costs to the Receiver due to unfounded allegations impugning its integrity.

Partial indemnity costs were awarded to the Secured Creditor and Legacy Hill Resources Ltd. The court declined to hold Mr. Wetelainen, a principal of the respondent, personally liable for costs, finding no evidence of fraud or abuse of the bankruptcy process for a wrongful collateral purpose, despite his breach of a prior order and the respondent's inability to pay.

The applicant, GuestLogix Inc., sought an initial order under the Companies' Creditors Arrangement Act (CCAA) for a stay of proceedings, the appointment of a Monitor, and authorization for super-priority charges.

The court found the applicant to be an insolvent debtor company with over $5 million in unsecured liabilities, making it eligible for CCAA protection.

The court granted the stay and the requested Administration and Directors' Charges.

However, due to a potential conflict of interest raised by a secured creditor, the court declined to appoint the proposed Monitor, Deloitte Restructuring Inc., and instead appointed PricewaterhouseCoopers Inc.