Christopher G. Armstrong

The Monitor in the CCAA proceedings of Nortel Networks Corporation brought an unopposed motion for approval of its fees and disbursements, as well as those of its counsel, for the period of November 1, 2021, to October 31, 2022.

The court applied the overriding principle of reasonableness and considered the significant results achieved by the Monitor, including completing a $38 million distribution and recovering an additional $21 million.

Finding the fees fair and reasonable, the court granted the motion and approved the accounts.

The Monitor brought a motion to sanction the Canadian Debtors' Plan of Compromise and Arrangement under the CCAA, which implemented a settlement allocating $7.3 billion in sale proceeds.

Two self-represented long-term disability (LTD) beneficiaries objected, arguing the Plan was unfair and violated sections 7 and 15 of the Charter by treating their claims pari passu with other unsecured creditors.

The court found the Plan fair and reasonable, noting it was approved by 99.7% of creditors.

The court dismissed the Charter arguments, holding that section 7 does not protect pure economic interests and that equal treatment of creditors in insolvency does not constitute discrimination under section 15.

The Plan was sanctioned.

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.