Evan Cobb

The Receiver of The Lion's Share Group Inc. brought a motion to appoint an interim receiver over the property of the debtor pursuant to section 46 of the Bankruptcy and Insolvency Act.

The Receiver argued that the debtor owed over $23 million under various promissory notes and personal guarantees, and that an interim receiver was necessary to prevent the dissipation of assets.

The debtor opposed the motion, arguing he was not personally liable under the guarantees and that the transactions in question were in the ordinary course of business.

The court granted the motion, finding that the Receiver was likely to succeed on the bankruptcy application and that there was an immediate need to protect the estate given the debtor's recent transactions and the complex web of related entities.

The Monitor of Bondfield Construction Company Limited and the Trustee in Bankruptcy of Forma-Con Construction brought applications under s. 96 of the Bankruptcy and Insolvency Act to recover tens of millions of dollars transferred out of the debtor companies through a false invoicing scheme and an alleged fund cycling scheme.

The court found that the payments made under the false invoicing scheme were transfers at undervalue made with the intent to defraud, defeat, or delay creditors, and held the participating respondents jointly and severally liable.

The court declined to apply the strict corporate attribution doctrine from Canadian Dredge, instead imputing the directing mind's fraudulent intent to the corporate debtors to fulfill the remedial purpose of s. 96.

The Monitor's claim regarding the fund cycling scheme was dismissed for lack of evidence that the transfers lacked consideration.

The applicant, acting as the foreign representative for the syncreon Group, sought an Initial Recognition Order under Part IV of the CCAA to recognize scheme of arrangement proceedings commenced in the United Kingdom.

The court found that the UK proceedings under Part 26 of the Companies Act constituted 'foreign non-main proceedings' under the CCAA.

The court granted the recognition order, recognized the UK Convening Order, appointed an Information Officer, and dispensed with the statutory publication requirement, finding that a formal cross-border protocol was unnecessary in this case.

In the context of CCAA restructuring proceedings, the applicants sought approval of a grievance claims procedure to resolve approximately 3,000 outstanding grievances.

USW Local 2251 opposed the motion, arguing that the CCAA stay did not apply to grievances, that imposing a new procedure impermissibly amended the collective agreement, and that staying the grievance process violated section 2(d) of the Charter.

The court granted the motion, holding that the CCAA permits staying grievance procedures and imposing a claims process, which does not constitute an amendment to the collective agreement.

The court also found no Charter violation and held that under the doctrine of paramountcy, the CCAA stay provisions prevail over the grievance arbitration requirements in the provincial Labour Relations Act.

Applicants sought an initial order under the Companies’ Creditors Arrangement Act to obtain court protection while restructuring a national not‑for‑profit healthcare organization suffering significant liquidity shortfalls.

The court found the applicants insolvent and satisfied that the statutory requirements for CCAA protection were met.

The court granted a stay of proceedings, approved a modified cash management system, appointed a monitor and chief restructuring officer, and approved administration and directors’ charges and a key employee retention plan.

The court also appointed a receiver over certain intellectual property and goodwill to enable terminated employees to access benefits under the Wage Earner Protection Program Act.

A comeback hearing was scheduled to permit creditors to raise concerns.

The applicant sought court sanction of a plan of compromise and arrangement under the Companies’ Creditors Arrangement Act to resolve extensive litigation arising from the audit of Castor Holdings Ltd. The plan involved contributions from partners, insurers, and related entities totaling approximately $220 million and included third‑party releases.

A creditor group opposed the sanction, arguing that the releases violated Quebec civil law and that the claims process was unfair.

The court rejected these objections, finding the expert evidence unreliable, confirming that federal insolvency law permits third‑party releases notwithstanding provincial law, and concluding the plan was fair and reasonable given overwhelming creditor approval.

The plan was sanctioned.

A supplier sought specific performance of a master services agreement during proceedings under the Companies’ Creditors Arrangement Act, arguing that deferred implementation fees constituted payment for post‑filing licensed software use and therefore fell within the supplier payment exception in s. 11.01(a).

The court examined the contractual structure separating implementation services from ongoing outsourcing services and held that the implementation fee related to historical system development completed before the CCAA initial order.

Because the services associated with the implementation fee were performed pre‑filing, the claim constituted a pre‑filing debt subject to the stay of proceedings.

The exception in s. 11.01(a) applies narrowly and only to goods or services provided after the initial order.

The motion seeking payment of deferred implementation fees and related amounts was dismissed.