George Benchetrit

The applicants, Nordstrom Canada Retail, Inc., Nordstrom Canada Holdings Inc., LLC, and Nordstrom Canada Holdings II, LLC, sought an initial order under the Companies’ Creditors Arrangement Act (CCAA) for a stay of proceedings to facilitate an orderly wind-down of their Canadian operations.

Nordstrom Canada, a subsidiary of Nordstrom US, had incurred significant losses and Nordstrom US had ceased financial support.

The court granted the requested relief, including a 10-day stay of proceedings, extension of the stay to Nordstrom Canada Leasing LP and, for limited purposes, to Nordstrom US (Parent Stay), approval of an Employee Trust funded by Nordstrom US, appointment of Employee Representative Counsel, and authorization for certain pre-filing payments to critical suppliers.

The court also approved Administration and Directors' and Officers' charges.

In a receivership proceeding, a dispute arose between a condominium purchaser and the vendor regarding liability for standard closing adjustments.

The purchaser argued he should be indemnified for borrowing costs, interest, and carrying costs due to the vendor's failure to provide clear title.

The court held that the agreement of purchase and sale expressly precluded any set-off against the purchase price or adjustments.

The purchaser was ordered to pay the closing adjustments, without prejudice to his right to seek indemnity in a separate claim.

Laurentian University brought an unopposed motion within its CCAA proceedings for an order extending the stay period to September 30, 2022, and an order approving a Pension Participation Agreement with the University of Sudbury.

The court found that the applicant had acted in good faith and with due diligence, justifying the stay extension.

The court also approved the pension agreement, finding it to be a fair and reasonable settlement that provided substantial benefits to stakeholders and was consistent with the purpose of the CCAA.

This motion for directions was brought by the Receiver of Unit 417 in a condominium project to determine whether the purchaser, Gerald Rasmussen, was entitled to clear title despite having prepaid the final balance of his purchase price directly to the developer, Brightstar, rather than into a deposit trust account.

The Guarantee Company of North America (GCNA), a secured creditor, opposed, arguing Rasmussen's payment was not bona fide and its mortgage should prevail.

The court found Rasmussen to be a bona fide purchaser for value, ruling that his payment, though structured as a loan, was the final purchase price payment under the agreement of purchase and sale.

The court determined that the APS did not prohibit direct payment to the vendor for the final balance and that GCNA's mortgage did not take priority over Rasmussen's interest.

The Receiver was directed to close Rasmussen's purchase and vest clear title in his name.

The applicant tenant sought a declaration that the respondent landlord acted in bad faith by unreasonably withholding consent to an indirect change of control under a commercial lease.

The landlord demanded a payment of over $5.8 million to grant consent, relying on lease provisions regarding transfers.

The court found that the landlord had already received compensation for the transfer in a previous proceeding and that demanding an exorbitant fee for a change of control that caused no operational prejudice was not in good faith.

The application was granted, and the landlord was ordered to provide consent, limited to the $75,000 processing fee already paid.

Laurentian University brought a motion within its CCAA proceedings seeking the appointment of a Chief Redevelopment Officer, an increase in the fee cap for the Board of Governors' independent counsel, and approval of a claims process.

The court approved the appointment of the CRO and the fee increase.

Regarding the claims process, TD Bank proposed amendments to require consultation on claims over $5 million.

Balancing the need for efficiency with creditor involvement, the court modified the claims process to establish an 'Inspector Group' to authorize the compromise of material claims, drawing on principles from the Bankruptcy and Insolvency Act.

The applicant, Laurentian University, brought a motion within its CCAA proceedings to extend the stay of proceedings, approve an amendment to its DIP facility increasing the available funds by $10 million, and approve settlement agreements with its faculty association, staff union, and Huntington University.

The court found that the applicant had acted in good faith and with due diligence, making significant progress in its restructuring.

Despite opposition from Thorneloe University and the University of Sudbury regarding the DIP amendment, the court approved the requested relief, finding the DIP conditions reasonable and the extension necessary for the applicant's continued operations and restructuring efforts.

The appellant, Deltro Electric Ltd., appealed from an order requiring it to repay $2 million USD to the respondent, Potentia Renewables Inc., with a receiver appointed over its assets in the event of non-payment.

The dispute arose from a failed business relationship concerning a ground-mount solar project in Barbados.

The application judge found that Deltro had breached and repudiated its obligations under a Letter of Intent and Amendment to Letter of Intent, and that final approval of the project had not been obtained within the required timeframe.

The Court of Appeal dismissed the appeal, upholding the application judge's interpretation of the contractual documents, rejection of fresh evidence, and appointment of the receiver with limited liability provisions.

Her Majesty the Queen in right of Ontario sought to lift a stay on its $330 billion health care cost recovery action against three tobacco companies (JTI-Macdonald Corp., Imperial Tobacco, Rothmans, Benson & Hedges Inc.) and eleven co-defendants, which was imposed under CCAA proceedings.

Ontario proposed to temporarily stay the effects of any judgment.

The court dismissed the motion, emphasizing the need to preserve the status quo in CCAA proceedings to facilitate a global resolution of significant claims.

Allowing Ontario's action to proceed would alter the level playing field, distract from restructuring efforts, and impose significant costs, prejudicing other stakeholders.

The applicants, JTI-Macdonald Corp., Imperial Tobacco Canada Limited, Imperial Tobacco Company Limited, and Rothmans, Benson & Hedges Inc., sought protection under the Companies' Creditors Arrangement Act (CCAA) following a $13.5 billion judgment from the Quebec Court of Appeal and other ongoing litigation.

JTI-Macdonald Corp. and Rothmans, Benson & Hedges Inc. moved for orders to file Supreme Court of Canada (SCC) leave applications but suspend further proceedings.

Imperial Tobacco Canada Limited and Imperial Tobacco Company Limited sought a blanket stay of all proceedings and limitation periods.

The Quebec class action plaintiffs opposed the motions and sought to partially lift the stay.

The court affirmed its broad jurisdiction under CCAA s. 11 to stay all actions, including appellate proceedings and limitation periods.

The court dismissed the motion by JTI-Macdonald Corp. and Rothmans, Benson & Hedges Inc., and granted Imperial Tobacco's motion, finding that a blanket stay best preserved the status quo and facilitated a global resolution for all stakeholders.

The Bondfield Group, a major construction company, sought CCAA protection due to insolvency, over $1 billion in active contracts, and over 200 lawsuits.

The application was unopposed and resulted from extensive stakeholder negotiations.

The court granted an initial order for CCAA protection, including a stay of proceedings, approval of a tailored $8 million Debtor-in-Possession (DIP) facility funded by Zurich Insurance, an Administration Charge for professional fees, and a Directors' Charge for $3 million (excluding John Aquino).

The court emphasized the public interest in completing critical infrastructure projects and the preference for CCAA over receivership to preserve enterprise value.

This endorsement addresses three issues following earlier Reasons for Decision: the appointment of KSV Advisory as interim receiver, Deltro's request to reargue its position on repudiation of a Letter of Intent (LOI), and Deltro's request to introduce new affidavit evidence.

The court appointed KSV as receiver, finding no conflict of interest.

Deltro's motion to reargue the repudiation issue was dismissed based on the functus officio principle, as the argument was previously available and no miscarriage of justice was demonstrated.

Similarly, Deltro's motion to introduce new affidavit evidence was dismissed, as the evidence could have been obtained with reasonable diligence and did not meet the high threshold for reopening a case to avoid a miscarriage of justice.

The applicant sought a declaration that the respondent was indebted to it for $2,000,000 USD advanced for a solar project in Barbados, and the appointment of a receiver.

The respondent failed to obtain the required zoning approval within the stipulated 12-month period and repudiated the agreements.

The court found that the respondent was obliged to repay the funds and rejected its claim for equitable set-off based on a separate project in the Dominican Republic.

The court granted judgment for $2,000,000 and ordered the appointment of a receiver, subject to a 30-day grace period for repayment.

An appeal concerning the calculation of a bonus payable to a subordinate debt and equity financing fund upon the sale of a borrower company.

The lower court determined the bonus at $242,552.79 based on net proceeds excluding $55.125 million in debt created through a pre-sale reorganization.

The appellate court reversed in part, holding that the $55.125 million should be included in the bonus calculation as it formed part of the proceeds of sale and was created in violation of the loan agreement's consent requirement.

The court upheld the lower court's rejection of arguments that the bonus contravened the criminal rate of interest, was unconscionable, or was ultra vires the lender's statutory mandate.

The bonus was recalculated at $793,800.48.

In an insolvency proceeding involving syndicated mortgage investments, a claimant sought approximately $103,000 in fees for services allegedly provided to the Investors' Committee, along with a court-ordered priority charge against the respondents' assets.

The court dismissed the claim, finding that no binding contract was ever formed as the parties had not agreed on all material terms and the claimant had insisted on a signed agreement.

The court also rejected a claim in quantum meruit, concluding the claimant provided services gratuitously while negotiating a retainer.

Finally, the court held there was no basis in its inherent jurisdiction to grant a retroactive priority charge for the claimant's fees.

The applicants sought declaratory relief to deny a bonus provision to the respondent, arguing it was criminal, unconscionable, or ultra vires.

The court found a bonus was owing but accepted the applicants' expert opinion on its quantum, significantly reducing the amount claimed by the respondent.

Both parties sought costs.

The court considered contractual full indemnity costs versus partial indemnity, noting the divided success and the absence of settlement offers.

Ultimately, the court ordered no costs, with each party bearing their own, and denied interest on the judgment.

The appellant sought leave to appeal an order approving a bankruptcy trustee's second auction process for the sale of assets of two bankrupt corporations, and refusing an adjournment.

The Court of Appeal dismissed the motion for leave to appeal, finding that the proposed appeal did not raise an issue of general importance, lacked prima facie merit, and would unduly hinder the progress of the bankruptcy proceedings, as the sale had already been completed.

The trustee in bankruptcy moved for an order requiring the responding party to obtain leave to appeal an order approving an auction process.

The responding party argued that leave was not required under s. 193(c) of the Bankruptcy and Insolvency Act because the property involved exceeded $10,000.

The Court of Appeal held that the order was procedural in nature, did not bring into play the value of the debtor's property, and did not determine entitlement to sale proceeds.

Therefore, the responding party requires leave to appeal, which may be sought from the panel scheduled to hear the appeal.

The applicants sought a declaratory order that a bonus payment clause in a 2011 loan agreement with the Business Development Bank of Canada (BDC) was unenforceable, arguing it contravened section 347 of the Criminal Code, was unconscionable, or was ultra vires to BDC's statutory objects.

The court dismissed all these arguments, finding the interest rate was not criminal, the transaction was not unconscionable given the applicants' sophistication, and the bonus provision was within BDC's powers.

However, the court ruled on the calculation of "net proceeds" for the bonus, allowing deductions for certified indebtedness, income taxes, and accounting fees, significantly reducing the bonus amount payable to the respondent.

Nortel Networks Corporation and its Canadian debtor affiliates brought a summary judgment motion to dismiss claims by SNMP Research International, Inc. and SNMP Research Inc. for breach of contract, breach of confidence, and copyright infringement.

SNMP's claims arose from Nortel's post-CCAA filing sales of its business segments (LOBs), during which SNMP's proprietary software source code was allegedly transferred to purchasers without authorization.

The court dismissed SNMP's claim for disgorgement of Nortel's profits, finding no evidence that Nortel received revenue derived from the copyright infringement, as purchasers knew they were not acquiring rights to SNMP software and negotiated separate licenses.

However, the court held SNMP's damage claim in abeyance for six months, acknowledging ongoing discovery in a related U.S. proceeding and the possibility of future evidence regarding LOB purchasers' use of unlicensed SNMP software.