Clifton P. Prophet

The applicant appealed a Proposal Trustee's disallowance of its proof of claim against the respondent's estate.

The claim arose from the respondent's alleged breach of a settlement agreement prohibiting the diversion of salon-only products to unauthorized retailers.

The court drew inferences from circumstantial evidence that the respondent had diverted products to a grey market store in Macau, constituting a material breach of the agreement.

The court upheld the liquidated damages clause as a genuine pre-estimate of damages and enforced the applicant's contractual right to reasonable attorneys' fees, allowing the proof of claim in full.

This decision concerns three motions to approve class counsel fees in the context of insolvency proceedings under the Companies' Creditors Arrangement Act involving three major tobacco companies.

The court approved the Quebec Class Action Plaintiffs' counsel fee request of approximately $901 million (representing 22% of the $4.119 billion allocated to the Quebec class members), the Knight Class Counsel fee request of $5 million plus disbursements, and the Tobacco Producers' counsel fee request of $3.75 million.

The court found that the fees were fair and reasonable given the exceptional risks assumed, the unprecedented outcome achieved, and the unique circumstances of the case.

A $50 million reserve was established from the Quebec counsel fees to protect against any pro-rata reduction in class member compensation due to actual take-up rates or other factors.

The decision addresses motions regarding the appointment of representative counsel for current and former employees and retirees of Hudson’s Bay Company ULC and related entities in ongoing Companies’ Creditors Arrangement Act (CCAA) proceedings.

The Court declined to appoint any of the nominated law firms as representative counsel at this stage, instead appointing the Honourable Herman Wilton-Siegel as an independent third party to evaluate proposals and make a recommendation.

The Court also approved amendments to the Sale and Investment Solicitation Process (SISP) to remove the company’s art and artifact collection from the SISP and to appoint Heffel Gallery Limited to conduct a separate auction for the collection, subject to further court approval of procedures.

The reasons review the legal framework for appointing representative counsel and the importance of balancing stakeholder interests in complex insolvency proceedings.

This decision sanctions the CCAA Plans of Imperial Tobacco Canada Limited, Imperial Tobacco Company Limited, JTI-Macdonald Corp., and Rothmans, Benson & Hedges Inc., effecting a global settlement of all tobacco-related claims in Canada.

The court reviews the structure, allocation, and fairness of the plans, including the creation of a $1 billion Cy-près Foundation, and addresses objections from social stakeholders.

The court finds the plans fair, reasonable, and in the public interest, and grants the requested relief, including third-party releases and the appointment of plan administrators.

The appeal concerns who is liable for outstanding municipal taxes in a receiver's sale of assets with an approval and vesting order (AVO).

The motion judge found the purchaser liable because the taxes were not yet due at closing.

The Court of Appeal reversed, holding that under s. 307(3) of the Municipal Act, liability for the taxes arose on January 1 of the relevant taxation years, prior to closing.

Therefore, the liability remained with the vendor (the receiver) and was vested out of the purchased assets by the AVO.

This decision approves a class action settlement and distribution protocol regarding predatory and unconscionable equipment lease agreements, including the registration of Notices of Security Interests (NOSIs) on consumers’ homes.

The court finds the settlement fair, reasonable, and in the best interests of the class, considering the risks of continued litigation, the insolvency of several defendants, and the benefits achieved, including monetary compensation, lease cancellations, and legislative reform.

The court also approves class counsel fees, disbursements, a Class Proceedings Fund levy, and an honorarium for the lead plaintiff.

This decision concerns a certified class proceeding that is progressing towards a settlement approval hearing.

The plaintiffs brought an unopposed motion to appoint Verita Global as the administrator for the implementation of the proposed settlement.

Class counsel, after a request for proposals process, recommended Verita Global based on its extensive experience, capacity to serve vulnerable individuals, communication abilities, reporting, budget, and cybersecurity certification.

The court found class counsel's choice appropriate and approved the appointment of Verita Global as the settlement administrator.

The court addressed two related putative class proceedings concerning predatory equipment lease agreements.

The plaintiffs sought to amend pleadings, add parties, consolidate the actions, certify the consolidated proceeding for settlement, and approve the notice plan.

The court granted all motions, finding that the criteria for class certification under the Class Proceedings Act, 1992, were met in the context of a proposed settlement, and that a class proceeding was the preferable procedure, especially given ongoing CCAA proceedings.

The notice plan for the settlement approval hearing was also approved.

Morrocanoil, Inc. brought a motion seeking leave to supplement the evidentiary record in its appeal from the disallowance of its proof of claim in the insolvency proceedings of Conforti Holdings Limited (CHL).

The motion concerned the inclusion of "Confidential Documents" (depositions) that were referenced in Morrocanoil's proof of claim but not fully provided to the Proposal Trustee due to a New Jersey confidentiality order.

While Morrocanoil argued the documents were already part of the record, CHL disagreed.

The court found that excerpts had been provided by both parties, but the full extent was unclear.

The motion was adjourned to allow the parties to further review the record, determine if additional excerpts were needed, and ascertain if relief from the New Jersey court was required before providing the confidential documents.

The Canadian Imperial Bank of Commerce (CIBC) initiated receivership proceedings against 1340182 Ontario Limited and Kazembe & Associates Professional Corporation.

The court-appointed Receiver, MNP Ltd., sought approval of its second report, fees, and authorization to assign 1340182 Ontario Limited into bankruptcy, and to distribute proceeds from the sale of a property.

A key dispute arose regarding the priority of mortgages on the property, specifically between Arthur Bryan, 923944 Ontario Ltd., and CIBC.

Bryan claimed his earlier mortgage was fraudulently discharged and sought declaratory relief to restore its first-ranking priority.

The court dismissed Bryan's cross-motion, finding that even if the discharge was fraudulent, the subsequent mortgages of 923944 Ontario Ltd. and CIBC were valid and enforceable under the Land Titles Act, as they were not fraudulent instruments and the mortgagees had no actual or imputed knowledge of fraud.

The court approved the Receiver's report and authorized distribution according to the registered priorities (923944 Ontario Ltd. first, CIBC second).

This motion addressed a receiver's application for an approval and vesting order (AVO) for the sale of properties, which was opposed by the debtors asserting their equitable right of redemption.

The debtors sought to delay the sale to secure financing, but their efforts were deemed highly conditional and uncertain.

The court applied the Soundair test, finding that the receiver conducted a robust and fair marketing process that yielded the best price.

The court emphasized that the debtors' inability to present a complete and unconditional financing package at the time of the motion was fatal to their request, distinguishing this case from precedents where redemption was allowed due to the debtor's immediate ability to pay.

The receiver's motion for the AVO was granted, and the debtors' cross-motion was dismissed.

This endorsement concerns the Companies' Creditors Arrangement Act (CCAA) proceedings for JTI-MacDonald Corp., Imperial Tobacco Canada Limited, Imperial Tobacco Company Limited, and Rothmans, Benson & Hedges Inc. The court granted an unopposed motion to extend the stay period until March 29, 2024.

Recognizing the complexity and the four-and-a-half-year duration of negotiations, the court directed the three court-appointed Monitors, in conjunction with the court-appointed Mediator, to collaborate and develop comprehensive Plans of Compromise or Arrangement.

The objective is to finalize plans that are fair and reasonable to all applicants and creditors, moving from observable activity to meaningful action.

The Applicants in a CCAA proceeding sought approval of an amended Share Purchase Agreement (SPA) and a reverse vesting order (RVO) to facilitate the sale of their business as a going concern.

The transaction aimed to preserve cannabis licenses, maintain business operations, and retain approximately 95% of employees.

The motion was unopposed, receiving strong support from the two senior secured creditors (2125028 Ontario Inc. and Marzilli) and the Monitor.

The court found the RVO appropriate, satisfying the factors under CCAA section 36, the Soundair Principles, and the Harte Gold framework.

Ancillary relief, including third-party releases for parties crucial to the restructuring, such as the stalking horse bidder (Cardinal) who provided interim financing and waived fees, was also granted.

The stay period was extended to allow for post-closing matters.