Geoffrey B. Morawetz

The applicants, facing severe liquidity issues and unable to meet financial covenants, sought protection under the Companies' Creditors Arrangement Act (CCAA).

The court found the applicants met the statutory definitions of 'company' and 'debtor company' and that a stay of proceedings was necessary to allow them to maintain operations and complete a sales process.

The court granted the Initial Order, which included the appointment of a Chief Restructuring Officer, approval of a DIP facility, various priority charges (Administration, Critical Supplier, Directors', and DIP Lenders'), and a Cross-Border Protocol to coordinate with parallel Chapter 11 proceedings in the United States.

The applicants, comprising the Cinram Group, sought an Initial Order under the CCAA.

The court found that the applicants were debtor companies and insolvent, facing a looming liquidity crisis.

The court granted the Initial Order, which included a stay of proceedings extended to non-applicant subsidiaries, authorization to pay critical pre-filing obligations, and approval of various charges including a $15 million DIP financing charge, a $3.5 million administration charge, a $13 million directors' and officers' charge, and a $3 million KERP charge.

The court also authorized the foreign representative to seek recognition under Chapter 15 of the US Bankruptcy Code.

The bankrupt appealed a registrar’s order lifting the automatic stay under s. 69 of the Bankruptcy and Insolvency Act to permit a creditor’s civil action to proceed.

The creditor alleged that the debt arose from misappropriation of funds received in a fiduciary capacity, potentially falling within s. 178(1)(d) of the Act such that the debt could survive bankruptcy discharge.

The court held that the registrar properly applied the governing legal principles and correctly concluded that the pleadings disclosed a sufficient basis to lift the stay.

The bankruptcy court’s role was not to determine the merits of the underlying claim but only whether sound reasons existed to allow the action to continue.

The appeal was dismissed with costs.

This endorsement determined costs arising from a security-for-costs motion and a related motion concerning transfer of an interest and continuation of the proceeding.

The court found the defendants had considerable but not complete success on the security-for-costs issue, and reduced the amount sought to account for partial success and duplication in senior-lawyer time.

For the continuation issue, the court ordered each side to bear its own costs.

Overall, the court fixed a single fair and reasonable costs award payable by the plaintiff to the defendants.

In CCAA restructuring proceedings, the plaintiff in a securities class action sought to lift the stay of proceedings to continue the class action against the debtor company and related defendants.

The moving party argued the action should proceed in order to access insurance proceeds that would not be available to other creditors.

The court considered the purposes of the CCAA stay, including preserving the status quo and facilitating a restructuring or sales process for the benefit of stakeholders.

Balancing prejudice, convenience, and the interests of the restructuring process, the court held that permitting the litigation to proceed would divert management resources from the ongoing court‑supervised sales process.

The stay was maintained except to permit the plaintiff to pursue a leave application to the Supreme Court of Canada on a limitation period issue.

The applicant landlord sought a declaration that a commercial tenant was required to pay its proportionate share of the cost of rehabilitating a shopping centre parking lot as additional rent under a lease provision requiring tenants to pay common area maintenance costs for repairs and maintenance.

The dispute turned on whether the parking lot rehabilitation constituted a repair or a capital expenditure under “accepted accounting practice.” After considering expert engineering and accounting evidence and principles drawn from GAAP and relevant case law, the court concluded that the work significantly extended the life of the parking lot and reduced operating costs, thereby enhancing its service potential.

The court held that the rehabilitation constituted a capital expenditure rather than a repair within the meaning of the lease.

Accordingly, the tenant was not responsible for the cost and was entitled to set-off amounts already paid.

Two affiliated technology companies applied for initial protection under the Companies’ Creditors Arrangement Act after exhausting start-up capital and becoming unable to meet payroll and other obligations.

The applicants sought a stay of proceedings, approval of debtor-in-possession financing, and priority charges for administration expenses and directors’ and officers’ liabilities.

The court held that the companies qualified as debtor companies under the CCAA and that they were appropriately treated as affiliated entities for the purpose of the proceedings.

The court approved the requested stay, DIP facility and related charges, finding them reasonable and necessary to allow time for restructuring or a going-concern sale for the benefit of stakeholders.

Creditors brought a motion under s. 69.4 of the Bankruptcy and Insolvency Act seeking a declaration that the statutory stay of proceedings arising from a proposal no longer applied to their civil action against the debtor.

The underlying action alleged fraud, conspiracy, deceit, and conversion involving the misappropriation of significant funds.

The court held that the creditors would likely be materially prejudiced by continuation of the stay and that equitable grounds justified lifting it, particularly where the alleged debt would likely survive a bankruptcy discharge and the debtor appeared to be delaying the proceedings.

The court also confirmed a previously granted Mareva injunction on a nunc pro tunc basis to preserve assets.

Costs were awarded to the moving parties on a partial‑indemnity basis.

The applicant corporation sought relief under the Companies’ Creditors Arrangement Act including an initial order, a stay of proceedings, approval of a sale process, and authorization of administration and directors’ charges.

The court considered whether the corporation qualified as a debtor company and whether the requested restructuring steps were appropriate in the circumstances of significant financial distress and ongoing investigations.

The court accepted that the corporation was insolvent and that a restructuring under the CCAA was necessary to preserve enterprise value and explore a potential sale of business operations.

The court approved the requested charges, authorized the sale process, and granted ancillary relief including recognition proceedings in foreign jurisdictions.

In an oppression application under the Ontario Business Corporations Act, the applicants sought interim relief authorizing a corporation to proceed with litigation against a third party and to amend an earlier order to permit them to sign corporate cheques to fund litigation and reimburse certain expenses.

The respondent opposed the motion and brought a cross‑motion seeking payment or preservation of alleged shareholder allowances and corporate expense reimbursements.

The court held that only limited interim relief was appropriate because the substantive issues in the oppression proceeding could not be determined at this stage.

The court authorized a $65,000 corporate payment to fund independent counsel for the litigation but preserved the existing order requiring dual signatures for other corporate payments.

Other reimbursement claims were deferred to the hearing of the oppression application.

In CCAA proceedings involving a large telecommunications company, the applicants sought authorization to cease environmental remediation work at several contaminated sites and to have regulatory remediation orders treated as claims within the insolvency process.

The provincial environmental regulator argued that its orders imposed regulatory performance obligations rather than monetary claims and therefore should not be stayed by the insolvency proceedings.

The court held that where a debtor is no longer operating and compliance with regulatory orders necessarily requires the expenditure of funds, such orders are in substance financial obligations.

The court concluded that environmental remediation orders relating to pre‑filing contamination constituted claims subject to the CCAA claims process and were stayed by the existing stay of proceedings.

The applicants were authorized to cease remediation activities and environmental claims were directed to be resolved through the established claims procedure.

A secured creditor applied for the appointment of a receiver over a debtor real estate holding company under s. 243(1) of the Bankruptcy and Insolvency Act and s. 101 of the Courts of Justice Act.

The respondent argued that the appointment of a receiver should not proceed by application and that ordinary remedies were available.

The court held that the governing legislation expressly contemplates appointment by application and that such an order constitutes a final order determining the issues raised.

Given the debtor’s continuing default, the enforceability of the creditor’s security, and the lack of an operating business, the court found it just and convenient to appoint a receiver.

The Chapter 11 Debtors brought a motion under section 49 of the CCAA for recognition and implementation of several orders made by the U.S. Bankruptcy Court, including a Final DIP Facility Order.

The Information Officer noted that the Final DIP Facility Order contained a partial 'roll up' provision that would not be permissible under section 11.2 of the CCAA in a domestic proceeding.

The court held that recognition of the foreign orders was necessary for the protection of the debtors' property and creditors' interests, and that the public policy exception under section 61(2) of the CCAA should be interpreted restrictively and did not apply to prevent recognition.

An insurance company applied for a winding-up order under the Winding-Up and Restructuring Act.

The central issue was the interpretation of insolvency in the context of a life insurance company whose liabilities consist primarily of long‑term policy obligations.

The court adopted a purposive interpretation and applied the definition of insolvency from the Bankruptcy and Insolvency Act, recognizing that contingent and future policy liabilities form part of the solvency analysis.

The court also accepted regulatory measures such as the Minimum Continuing Capital and Surplus Ratio as relevant indicators of financial distress.

Finding the company’s liabilities exceeded its assets and accepting the regulator’s assessment of insolvency, the court granted the winding‑up order.

In CCAA proceedings, the debtor companies sought approval of a debtor-in-possession (DIP) financing facility and a super-priority DIP lenders’ charge ranking ahead of other encumbrances, including potential pension-related claims.

Two unions opposed the motion, arguing that granting super priority would undermine fiduciary duties owed to pension plan beneficiaries and that the evidentiary record was insufficient to justify the relief.

The court held that the statutory requirements under s. 11.2 of the Companies’ Creditors Arrangement Act were satisfied and that DIP financing was necessary to maintain operations and conduct a sales or restructuring process.

Applying the doctrine of federal paramountcy, the court found that the CCAA could override conflicting provincial pension legislation where necessary to avoid bankruptcy and facilitate restructuring.

The DIP facility and super-priority charge were approved.

On an unopposed insolvency motion under Part III of the Bankruptcy and Insolvency Act, the moving parties sought sanction of an amended consolidated proposal with substantive consolidation and a broad third-party release.

The court applied the section 59(2) reasonableness-and-benefit test, considered good faith and creditor voting support, and accepted that the proposal met statutory requirements.

The court held that third-party releases were permissible in the circumstances and interpreted the statute harmoniously with restructuring principles applied under related insolvency legislation.

Applying the Metcalfe criteria, the court found the release was necessary, supported by tangible contributions, and beneficial to creditors generally compared with bankruptcy alternatives.

The sanction order was granted.

The applicants, Timminco Limited and Bécancour Silicon Inc., sought orders in their CCAA proceedings to suspend special payments to their pension plans, grant super priority to Administration and D&O Charges over provincial pension deemed trusts, approve Key Employee Retention Plans (KERPs), and seal the KERP details.

The unions opposed the super priority and suspension of pension payments, arguing it violated provincial pension legislation and fiduciary duties.

The court granted the motion, applying the doctrine of paramountcy to find that enforcing the provincial pension obligations would force the companies into bankruptcy and frustrate the CCAA restructuring.

The court also approved the KERPs and sealed the confidential supplement.

The applicant bank brought an application under s. 243 of the Bankruptcy and Insolvency Act for the appointment of a receiver and manager over the respondents' assets.

The respondents opposed the application, arguing it was premature and that they should be given more time to address the outstanding demand for payment.

The court found that the respondents were in default, had failed to make agreed-upon payments from a prior adjournment, and that the applicant's security position was eroding.

Concluding that it was just and convenient to do so, the court granted the application and appointed a receiver.

The applicants, Timminco Limited and Bécancour Silicon Inc., sought initial protection under the Companies' Creditors Arrangement Act (CCAA) due to severe liquidity issues and an inability to meet financial obligations.

The court found the applicants to be insolvent debtor companies and granted the initial CCAA order.

The court also extended the stay of proceedings to certain directors, officers, and specific partnership agreements, and approved an Administration Charge of $1 million and a Directors' and Officers' Charge of $400,000.

The applicants appealed an arbitration award concerning a franchise dispute under the Arthur Wishart Act (Franchise Disclosure), 2000 and alleged negligent misrepresentation in financial forecasts relating to a Canadian Tire store development.

They argued the arbitrator applied an incorrect legal test for negligent misrepresentation and erred in assessing reliance, causation, and damages.

The court held that the scope of review was limited to errors of law and concluded the arbitrator had effectively applied the correct test from Queen v. Cognos Inc. The arbitrator’s findings that the forecasts were not negligently prepared and that the applicants did not rely on them were factual determinations not subject to appeal.

The court also upheld the arbitrator’s approach to damages and the interpretation of the release provisions in the dealer contract.