Guy P. Martel

The applicant, VBI Vaccines Inc., sought court approval for a sale transaction structured as a reverse vesting order (RVO) to its secured lender, K2 HealthVentures, as part of its CCAA insolvency proceedings.

The motion also sought collateral relief, including releases for various parties and the ability to sell residual assets up to $5 million without further court approval.

The court granted the motion, finding that the RVO was necessary and met the stringent Harte Gold factors, as well as the traditional Sound Air factors.

The RVO was deemed essential due to the debtor's highly regulated industry and the non-assignability of its intellectual property and government licenses, making it the only viable option to maximize value compared to a bankruptcy scenario.

The court also approved the releases and the limited authority to sell residual assets, noting the Monitor's support and the lack of opposition from stakeholders.

The Québec Plaintiff, Jean-François Bourassa, brought a motion seeking a CCAA Representation Order to represent Canadian Personal Injury Claimants in foreign recognition proceedings and related Chapter 11 proceedings, including the appointment of specific counsel and an order for their fees to be borne by the Canadian Debtors.

The motion was opposed by the Canadian Debtors and other stakeholders.

The court dismissed the motion, finding that the interests of the Canadian Personal Injury Claimants were already adequately represented by the Official Committee of Opioid Claimants (OCC) in the U.S. Chapter 11 cases, which had been recognized as the foreign main proceeding in Canada.

The court emphasized the principle of cooperation with the foreign court and noted the Québec Plaintiff's lack of timely objection to previous orders in both the U.S. and Canadian proceedings.

Harte Gold Corp. sought approval of a sale of its mining enterprise to a strategic purchaser via a reverse vesting order (RVO) under the CCAA.

The transaction involved the cancellation of existing shares, the issuance of new shares to the purchaser, and the vesting out of excluded assets and liabilities to newly formed entities.

The court found that it had jurisdiction under section 11 of the CCAA to grant an RVO and applied the section 36(3) factors to assess its appropriateness.

The court approved the transaction, finding it was the best outcome reasonably available, preserved necessary mining licenses and permits, and was overwhelmingly positive for creditors and stakeholders.

The court also granted an extension of the stay of proceedings and expanded the Monitor's powers.

The applicant sought an Amended and Restated Initial Order, approval for a sale and investment solicitation process, and an increase in DIP financing in its CCAA proceedings.

Due to the chronic problem of late filings on the Commercial List, the court adjourned the motion because the materials were filed late the evening before the hearing.

The court extended the stay and authorized a small increase in DIP borrowing to maintain the business until the adjourned date, warning counsel that late filings for scheduled matters will result in adjournments.

An insolvent consulting engineering firm became subject to CCAA proceedings, after which the appellant municipality refused to pay for post-initial order work and sought to effect compensation between amounts owed to the firm and two pre-order fraud-related claims.

The majority held that participation in Quebec's Voluntary Reimbursement Program does not in itself establish that a claim relates to fraudulent misrepresentation under s. 19(2)(d) of the CCAA.

The majority further held that a supervising judge has broad discretion under ss. 11 and 11.02 to stay a creditor's right to pre-post compensation, though the absolute prohibition from the Quebec Court of Appeal was tempered to allow for exceptional cases.

The initial stay order covered the appellant's right to effect pre-post compensation, and no basis was shown to lift the stay on either claim.

Brown J. dissented, arguing the matter should have been remanded to the supervising judge to exercise her discretion.