In CCAA restructuring proceedings, the applicants sought approval of an asset sale transaction and related vesting order.
The provincial environmental regulator opposed the transaction and argued that a pre‑filing environmental remediation order was regulatory in nature and not subject to the CCAA stay.
The court held that where an insolvent debtor with no ongoing operations would necessarily incur financial obligations to comply with the environmental order, the order effectively enforced a payment obligation and was therefore stayed.
The court further held that the regulator could file a claim for remediation costs but could not use regulatory orders to create a super‑priority inconsistent with the CCAA priority scheme.
The proposed asset sale was approved as the result of a comprehensive marketing process and in the best interests of stakeholders.
