Harry Mendel Fogul

Following the approval of an amended restructuring proposal under the Bankruptcy and Insolvency Act, two limited partner applicant groups sought costs for their participation in the proceedings.

The court declined to award costs, noting the Commercial List practice of generally not awarding costs in restructuring matters.

The court emphasized that restructuring is not a classic adversarial proceeding and that stakeholders should not be discouraged from participating by the threat of costs.

No order as to costs was made for the bankruptcy proceeding, though the court left open the possibility of addressing costs in the related civil proceedings if funds flow back to the partnership.

The debtors, YG Limited Partnership and YSL Residences Inc., sought court approval for version 2 of Amended Proposal #3 under the Bankruptcy and Insolvency Act, following the court's previous rejection of an earlier proposal.

The amended proposal addressed the court's prior concerns by treating related party claims as equity, ensuring construction lien claims did not dilute unsecured creditors' recoveries, and providing that any surplus funds would be returned to the limited partnership.

The court found the amended proposal to be reasonable, calculated to benefit the general body of creditors, and advanced in good faith, and therefore granted the order approving the proposal.

The debtors, YG Limited Partnership and YSL Residences Inc., sought court approval of a bankruptcy proposal under the Bankruptcy and Insolvency Act.

Two groups of limited partners opposed the proposal, arguing it was not reasonable, was advanced in bad faith, and improperly treated related-party advances as debt rather than equity.

The court refused to approve the proposal, finding that the related-party claims were equity claims, the proposal sponsor had improperly induced unaffected lien claimants to vote as affected creditors, and the general partner had breached its fiduciary duties by advancing a proposal designed to benefit related parties at the expense of the limited partners.

The Receiver of two insolvent real estate brokerages (TRP and TRP Realty) sought the court's advice and direction on whether approximately $3.7 million in commissions owed to the brokerages' agents were held in trust for the agents or formed part of the general assets available to secured creditors.

The court applied the "three certainties" test for a valid trust, focusing on certainty of intention.

Despite some ambiguous indicators like bank account names and standard form documents, the court found that the agents' contracts and the brokerages' audited financial statements did not objectively demonstrate an intention to create a trust.

Consequently, the commissions were deemed unsecured debts, not trust funds, and thus available to the secured creditors.

The bankrupt, Emmanuel Diena, sought an absolute discharge from bankruptcy.

Two creditors, Kohl & Frisch Limited and Joddes Limited (the "Objecting Parties"), opposed the discharge, alleging misrepresentation of assets in a personal financial statement and efforts to shield assets and income.

The court found that the bankrupt intentionally misrepresented the ownership of corporate shares and a Florida condominium in his financial statement and had structured his affairs to have no assets in bankruptcy.

While the Objecting Parties' reliance on the misrepresentation was limited, the court determined that the bankrupt's actions offended commercial morality.

Balancing the interests of the bankrupt, creditors, and the public, the court granted a conditional discharge, requiring the bankrupt to pay $100,000 to the trustee, as he failed to establish an inability to satisfy such a payment.

The applicants, a group of companies owned by Dondeb Inc., sought an Initial Order under the Companies' Creditors Arrangement Act (CCAA) to enable an orderly liquidation of their assets.

The application was opposed by approximately 75% of the secured creditors, who argued for individual receiverships due to a lack of confidence in the applicants' principal and the burden of CCAA administrative costs.

The court dismissed the CCAA application, finding it unlikely that a successful plan could be developed and approved by the creditors.

Instead, the court issued a Global Receivership Order, which was supported by the opposing creditors, to achieve an orderly liquidation at a lower cost.

The court considered a motion to approve a debtor proposal under the Bankruptcy and Insolvency Act after creditor approval.

It held the proposal terms were not reasonable because key records were not produced, the trustee could not provide an opinion on exclusion provisions, and the proposed structure risked prejudice to creditor recovery rights.

The court also found statutory grounds requiring security were proved and concluded the offered funding did not satisfy the required security threshold.

The motion to approve the proposal was dismissed to protect creditor interests and the integrity of the insolvency process.

The appellant appealed an order fixing the trustee's remuneration and declining to appoint a substitute trustee.

The Court of Appeal dismissed the appeal, finding that s. 39(5) of the Bankruptcy and Insolvency Act provided the motion judge with the authority to fix the remuneration.

The court also agreed that there was no basis to appoint a substitute trustee, as the appellant was permitted and capable of carrying a claim against the bankrupt.

The appeal was dismissed with costs.

The appellants appealed an order approving a debtor's proposal under the Bankruptcy and Insolvency Act, seeking an order that the debtor pay them $244,049.10.

The Court of Appeal dismissed the appeal, finding no legal error in the approval of the proposal.

The Court noted the appellants could pursue claims against individuals or follow statutory procedures to question the claim amount.