Christopher Burr

The applicant, a major Canadian toy retailer, sought an initial order under the Companies' Creditors Arrangement Act (CCAA) due to a liquidity crisis triggered by the bankruptcy filing of its US parent company.

The court granted the initial order, including a stay of proceedings to stabilize operations ahead of the holiday season.

The court also approved a debtor-in-possession (DIP) lending facility to replace existing secured debt and fund ongoing operations, while limiting the DIP lenders' enforcement rights to require court approval.

Provisions allowing the Monitor to pay pre-filing claims of critical suppliers and establishing charges for administration and directors/officers were also approved.

The applicant, Zochem Inc., applied under Part IV of the CCAA for recognition of First Day Orders made by the U.S. Bankruptcy Court in Chapter 11 proceedings.

The court found that the U.S. proceeding was a foreign main proceeding, as the debtors were managed as an integrated group from the United States, despite Zochem's operations being in Ontario.

The court also recognized the interim financing order and granted a super-priority charge for the DIP lender, noting that the interim advance was necessary to meet payroll and that the directors must act in the best interests of the Canadian corporation.

A court‑appointed receiver sought approval of bidding procedures and a sales process for a distressed technology company, including the use of a stalking horse credit bid by the senior secured lender.

The receiver also sought confirmation of the priority of the receiver’s charge and borrowings charge over existing security interests and approval of its activities to date.

The court applied the Soundair principles in assessing the fairness, transparency, and commercial efficacy of the proposed sales process.

Given the debtor’s lack of liquidity and the need for a rapid process, the court approved the stalking horse structure, the auction procedures, and the expense reimbursement.

The court also granted priority to the receiver’s charges under the Bankruptcy and Insolvency Act and confirmed the receiver’s reported activities.

The applicants, comprising the First Leaside group of companies, sought an Initial Order under the Companies' Creditors Arrangement Act (CCAA) to conduct an orderly wind-down of their operations.

The court found that the applicants, viewed as a group, were insolvent and that the CCAA could be appropriately used for a liquidating proceeding.

The court also granted super-priority Administration and D&O Charges, dismissing arguments from secured creditors that provincial paramountcy issues precluded such priorities without further notice.

The appellant appealed an order regarding funds collected by a receiver.

The Court of Appeal dismissed the appeal, finding that the funds collected by the receiver never lost their character as trust funds because they were not co-mingled with pre-receivership funds and remained identifiable.

The cross-appeal regarding the interpretation of s. 191.0.1(3) was also dismissed, as the provision imposes obligations on persons in Ontario arranging carriage of goods.