George Benchetrit

The applicants, QM GP Inc. and Highpoint Environmental Services Inc., sought an initial order under the Companies' Creditors Arrangement Act and a lien regularization order.

The applicants sought protection to address acute liquidity crisis, interim financing, and relief to stabilize operations.

The court granted the initial order with certain modifications, approving interim debtor-in-possession financing, appointment of a monitor, administration and directors' charges, and a lien regularization order.

The court also granted a temporary stay on performance bond calls and certain indemnity obligations, with the Kingsdale Letter of Credit issue deferred to the comeback hearing.

The decision addresses two competing motions for the appointment of representative counsel for investors in a receivership proceeding involving Sussman Mortgage Funding Inc. The court reviews the procedural background, the need for representative counsel, and the competing proposals from Aird & Berlis LLP and Paliare Roland Rosenberg Rothstein LLP.

The court ultimately appoints Aird & Berlis LLP as representative counsel, finding their approach and fee structure preferable for efficiency, transparency, and certainty.

The decision addresses motions regarding the appointment of representative counsel for current and former employees and retirees of Hudson’s Bay Company ULC and related entities in ongoing Companies’ Creditors Arrangement Act (CCAA) proceedings.

The Court declined to appoint any of the nominated law firms as representative counsel at this stage, instead appointing the Honourable Herman Wilton-Siegel as an independent third party to evaluate proposals and make a recommendation.

The Court also approved amendments to the Sale and Investment Solicitation Process (SISP) to remove the company’s art and artifact collection from the SISP and to appoint Heffel Gallery Limited to conduct a separate auction for the collection, subject to further court approval of procedures.

The reasons review the legal framework for appointing representative counsel and the importance of balancing stakeholder interests in complex insolvency proceedings.

The court granted a bankruptcy order against Thomas Dylan Suitor, finding that the applicant, The Fuller Landau Group Inc. (as Receiver of The Lion’s Share Group Inc.), established the necessary statutory requirements under the Bankruptcy and Insolvency Act.

The court found that Mr. Suitor was personally liable under promissory notes as both borrower and guarantor, that he owed debts exceeding $1,000, and that he had ceased to meet his liabilities generally as they became due.

The court also found the existence of multiple creditors and/or special circumstances justifying the order, and declined to exercise its discretion to refuse the order.

This endorsement grants a brief adjournment in the Companies’ Creditors Arrangement Act (CCAA) proceedings involving Hudson’s Bay Company ULC and related entities, following ongoing discussions between the applicants and stakeholders.

The court extends the stay of proceedings, increases the Directors’ Charge, amends the relative priorities of charges, and approves the engagement of Reflect Advisors, LLC as financial advisor.

The court finds the requested relief appropriate, unopposed, and supported by the Monitor, and orders the requested amendments to the Initial Order.

This endorsement grants the Court-appointed Monitor’s motion for approval of a credit bid process and orderly liquidation plan in the CCAA proceedings of Balboa Inc. and related applicants.

The Court approves the sale agreements, a secondary credit bid process for remaining properties, and an orderly liquidation plan, as well as the Monitor’s reports, activities, and fees.

The stay of proceedings is extended to May 31, 2025.

The decision details the mechanics of the credit bid process, the rationale for the relief, and the Court’s satisfaction that the process is appropriate and fair in the circumstances.

This endorsement concerns a motion by FAAN Mortgage Administrators Inc., as Court-appointed Trustee of Building & Development Mortgages Canada Inc. (BDMC), for approval of its 30th and 31st Reports, its fees and disbursements, a sealing order for certain confidential exhibits, and authorization to distribute the Fortress Holdback and Future Fortress Amounts to investors.

The motion was unopposed.

The court approved the Trustee’s activities and fees, granted the sealing order, and authorized the distribution to investors, finding these steps appropriate and necessary to protect investor interests and confidential information.

The proposed plaintiff, Frank Losak, sought leave to commence a class proceeding against the Financial Services Regulatory Authority (FSRA) and its CEO, Mark White, alleging misrepresentations related to the sale of Pace Savings & Credit Union securities while Pace was under FSRA's administration.

The court determined that leave was required under the Liquidation Order.

It granted leave for the claim against FSRA, finding a viable cause of action not barred by the Crown Liability and Proceedings Act or the Limitations Act, and that it would not undermine the liquidation.

However, leave was denied for the claim against Mark White due to statutory immunity under the FSRA Act, as no particulars of bad faith were provided.

The statement of claim against FSRA was allowed to be issued nunc pro tunc to February 28, 2024.

The appellant, 2557904 Ontario Inc. (the stalking horse bidder), appealed a motion judge's order that dismissed the receiver's motion for an approval and vesting order (AVO) and instead approved the debtor's (1000093910 Ontario Inc.) motion to redeem a first mortgage.

The Court of Appeal found the motion judge erred by not ensuring 255 received compensation for costs thrown away and by granting provisional enforcement of the order after an appeal notice was filed.

The appeal was allowed in part, varying the order to require the debtor to pay $300,000 in compensation to 255 and setting aside the provisional execution.

The court also ordered that if the refinancing transaction does not close, the AVO for 255 will be granted.

The Royal Bank of Canada (RBC) sought the appointment of a receiver over the assets of Maxx Properties (No. 323) Ltd. and Blake Larsen, due to multiple defaults under credit and forbearance agreements.

The debtor admitted default but requested a brief extension, citing a pending transaction.

The court granted the receiver appointment, finding that the debtor had repeatedly defaulted on obligations, failed to comply with forbearance terms, and provided insufficient evidence of the proposed transaction's viability.

The court emphasized the erosion of RBC's security and the debtor's non-compliance.

The plaintiffs, first-position mortgagees, moved for the appointment of a receiver over a property where the debtors had abandoned a gas station and convenience store business.

The loan had matured, and the property was found abandoned with inventory stripped.

While some subsequent mortgagees opposed, arguing for a direct sale or limited investigative receivership to minimize costs, the court found it just and convenient to appoint a receiver.

The court emphasized the contractual right to appoint a receiver, the abandonment of the property, and the need to preserve assets and explore a going concern sale.

The motion was granted, and Rosen Goldberg Inc. was appointed as receiver with full powers.

In the receivership of the Stateview entities, Tarion Warranty Corporation brought a motion seeking declaratory relief on behalf of purchasers who had paid deposits for pre-construction homes.

Tarion argued that the deposits were subject to an express or constructive trust and sought a remedial constructive trust to elevate the purchasers' priority.

The court dismissed the motion, finding that the purchasers had contractually subordinated their interests to secured lenders.

While an express trust existed for contracts with early termination provisions, the funds were not segregated.

The court declined to impose a remedial constructive trust, as doing so would improperly upset the priority scheme under the Bankruptcy and Insolvency Act.

This motion concerned the priority of new home purchasers' deposits in the bankruptcy of residential real estate developers (Stateview entities).

Tarion Warranty Corporation sought declaratory relief, arguing that the deposits were subject to express or constructive trusts due to unjust enrichment, which would elevate purchasers' claims.

The court dismissed Tarion's motion, finding that purchasers' agreements contained subordination clauses giving priority to secured lenders.

The court also determined that while express trusts existed for some purchasers with early termination provisions, these were not statutory deemed trusts.

Furthermore, there was no unjust enrichment for purchasers without express trusts, as the operation of the Bankruptcy and Insolvency Act constituted a juristic reason.

The court declined to impose a remedial constructive trust, emphasizing the high bar for such remedies in insolvency proceedings and the lack of a close causal connection between the deposits and the real property proceeds.

The defendant, Olympia Trust Company, brought a consent motion to dismiss third-party proceedings against ADI Developments (Link) Inc., ADI Development Group Inc., and Tariq Adi.

The motion was brought after the plaintiff's main action against Olympia Trust was dismissed and a comprehensive settlement agreement resolving claims against the ADI Defendants was approved.

The court granted the motion, dismissing the third-party proceedings with prejudice and without costs, as the basis for the third-party claim was obviated and the dismissal was on consent.

The plaintiff in a proposed class action concerning failed syndicated mortgage investments brought a motion to lift a stay of proceedings and dismiss the action against the ADI Defendants.

A settlement had been reached in a related action (the FAAN Action) providing over $18.3 million to the investors, representing over 91% of the principal owed by the ADI Defendants.

The court found the settlement fair and reasonable, and approved the dismissal of the class action against the ADI Defendants without costs, as there was no prejudice to the putative class members.

Santokh Mahal sought a declaration that his security interest in Golden Miles Food Corporation's personal property was valid and had priority, securing $2,182,914 in advances.

The Applicant, Skymark Finance Corporation, and the Receiver, KSV Restructuring Inc., opposed the motion.

The court granted Mahal a secured claim for $281,600, representing direct personal advances, but dismissed the remaining $1,901,314 claimed for advances made by corporations controlled by Mahal.

The court found that these corporate advances were not indirect debts secured by Mahal's General Security Agreement due to insufficient documentation and lack of PPSA registration by the advancing corporations.

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.