Earl Patrick Shea

In an addendum to previous reasons ordering a buyout of certain members of a corporation, the court addressed disputed terms of the buyout order.

The court determined that the boundaries of severed and retained parcels did not require further input, as the total property value would dictate payouts.

The court also ruled that costs, including commissions, closing costs, and capital gains taxes related to the sale of severed parcels, must be borne by the departing members who benefit from those sales.

A request for interim distributions was denied due to practical uncertainties and tax liabilities.

The Lash family owned a 30-acre cottage property through a non-profit corporation, Lash Point Association Corp. (LPAC).

A dispute arose between family members who wanted to sell their interests and leave (the leave camp) and those who wanted to keep the property for future generations (the remain camp).

The leave camp applied to wind up the corporation and sell the entire property, while the remain camp proposed a court-ordered buyout of the departing members funded by the sale of severed parcels.

The court dismissed the winding up application, finding that a buyout was a viable alternative that would allow departing members to receive fair market value while preserving the corporation's purpose for the remaining members.

The court appointed a receiver to implement the buyout process.

The bankrupt applied for discharge from bankruptcy.

On the first day of the hearing, the bankrupt raised preliminary issues regarding the standing of an opposing creditor, whether an alleged undue preference could be considered, and the admissibility of documents.

The court held that the opposing creditor had standing because its proof of claim had not been disallowed.

The court deferred the undue preference issue, noting a separate proceeding had been scheduled to determine it, and ordered that the discharge hearing be deferred until that issue was resolved.

The court declined to rule on document admissibility in advance.

A court-appointed receiver sought approval of its reports, approval of fees and disbursements, authorization to sell a property to fund payment of those fees, and directions regarding the validity of a corporate board election.

The court approved the receiver’s activities and found the fees of both the receiver and its counsel to be fair and reasonable given the unusual and contentious nature of the receivership.

The court authorized the sale of the property under the receiver’s control to generate funds to pay the receiver’s outstanding fees.

The request for directions regarding the validity of the corporate board election was declined as beyond the scope of the receivership proceeding.

The court ordered that the parties benefiting from the receivership share the receiver’s fees on a 50/50 basis.

The court-appointed Receiver for the properties of a local branch of The Polish Alliance of Canada moved for directions regarding its administration.

The plaintiff national association criticized the Receiver's neutrality, objecting to the presence of former branch executives on the property and disputing the membership list for an upcoming executive election.

The court approved the Receiver's conduct as prudent and neutral, rejected the plaintiff's attempt to unilaterally dictate branch membership, and directed the Receiver to hold an election among the 19 recognized remaining branch members.

In an insolvency proceeding, a self-represented solicitor sought costs following partial success on an application determining his claim against the debtor’s estate.

The claimant requested full indemnity costs alleging improper conduct by the receiver and failure to engage in settlement discussions.

The court rejected those allegations and held that full indemnity costs were not justified.

However, because the claimant achieved a recovery significantly higher than the receiver’s proposed distribution, he was entitled to costs on a partial indemnity basis.

The court fixed fair and reasonable costs payable from the receivership estate.

Recognition proceedings were brought under the cross‑border insolvency provisions of the Bankruptcy and Insolvency Act concerning a foreign main liquidation proceeding in the Commonwealth of the Bahamas.

Multiple parties asserted competing claims to approximately $4 million in assets held by a Canadian financial institution.

Motions were pending regarding whether a stay of proceedings should be lifted or modified to permit bankruptcy proceedings in Canada or enforcement of claimed interests.

The court held there was insufficient time to fully argue the issues and maintained the existing interim stay and related orders to preserve the status quo pending a full hearing.

The endorsement emphasized that the interim directions were not intended to interfere with the foreign main proceeding.

The applicant, a creditor of the debtor company under CCAA protection, sought an order authorizing it to file a plan of compromise or arrangement and directing meetings of affected creditors to vote on the plan.

The proposed plan did not include a shareholder vote.

The debtor opposed the application, arguing the plan was not in the best interests of stakeholders and improperly excluded shareholders.

The court found that because the debtor's shares had potential equity value depending on the outcome of pending litigation, and the proposed plan would radically alter the economic prospects of the shares, a shareholder vote was required.

The application to order a meeting of creditors without a shareholder vote was denied.

Skyservice Airlines Inc. went into receivership leaving unpaid airport and air navigation charges.

The airport authorities and NAV Canada obtained orders to seize and detain aircraft leased by Skyservice to recover the amounts owed.

The aircraft lessors appealed, arguing that Skyservice no longer 'owned or operated' the aircraft at the time of the applications due to the receivership, suspension of its air operator certificate, and the lessors' attempts to terminate the leases.

The Court of Appeal dismissed the appeal, applying the Supreme Court of Canada's decision in Canada 3000, holding that Skyservice remained the registered owner and operator in possession of the aircraft at the relevant time, and the statutory detention remedy takes priority over the lessors' property interests.

The appellant, a secured creditor, appealed an order approving a receiver's proposed purchase agreement and technology license agreement for the assets of the respondent companies.

The appellant argued that the proposal was identical to one previously rejected by another judge.

The Court of Appeal dismissed the appeal, finding that the new proposal differed significantly and that the motion judge appropriately applied the Soundair principles in approving the transaction, given the changed circumstances and the need to sell the subsidiary as a going concern.