Mr. Green

Various parties brought motions seeking reconsideration or clarification of a prior joint allocation decision determining the distribution of $7.3 billion in escrow among debtor estates in multinational insolvency proceedings.

The moving parties argued that aspects of the allocation methodology—including treatment of bond guarantee claims, certain asset sale proceeds, intercompany claims, tax claims, and settled claims—required amendment or clarification.

The court reiterated that reconsideration is an exceptional remedy and rejected most requests because the issues either had been addressed at trial or could have been raised earlier.

Limited clarification was granted regarding the treatment of bondholder claims against guarantors and recognition of certain court‑approved settled pre‑filing claims that had been paid.

Other requested clarifications or amendments were denied.

In a joint cross-border insolvency trial concerning the allocation of approximately $7.3 billion in lockbox funds from the sale of global business lines and residual intellectual property, the court interpreted the Master R&D Agreement as an operating transfer-pricing document that granted limited licence rights but did not govern post-insolvency allocation.

The court rejected both the position that one Canadian debtor owned all sale proceeds by virtue of legal title and the position that the EMEA debtors jointly owned all intellectual property by operation of law.

Applying unjust enrichment principles and the broad remedial jurisdiction available in CCAA proceedings, the court held that a just result required a pro rata allocation among debtor estates based on allowed claims.

The court further directed that duplicate claims be counted only once for allocation purposes, that intercompany claims be included, and that interim distribution proposals be brought forward.

The moving party sought an order appointing a computer forensic expert to inspect the responding party’s computer systems to determine the authenticity of certain emails allegedly exchanged between employees.

The motion alleged a lack of transparency in the responding party’s investigation and requested inspection of servers and archived email systems.

The court accepted the responding party’s evidence that no trace of the emails existed in its live exchange system or archival vault and that prior internal and forensic reviews found no record of the communications.

Applying a threshold requirement that there be a real likelihood the emails once existed and were deleted, the court held the moving party’s request was based on speculation.

Given the intrusive nature of inspecting a competitor’s computer systems and the principle of proportionality in discovery, the court refused the requested order.