James Henry Szumski

In CCAA proceedings involving several related aerospace entities, the court considered a motion by the court-appointed monitor seeking approval of an adjudication process and determinations regarding claims asserted against a directors’ and officers’ charge.

The Ministry of the Environment filed claims for environmental remediation costs arising from pre‑filing contamination and anticipated a future director’s order against former directors and officers.

A law firm representing certain directors and officers also filed contingent contribution and indemnity claims.

The court held that the environmental claims and related indemnity claims did not constitute liabilities incurred by directors and officers after the commencement of the CCAA proceedings within the meaning of s. 11.51 of the Companies’ Creditors Arrangement Act.

Allowing such claims to access the directors’ charge would improperly alter creditor priorities and indirectly elevate unsecured environmental claims over a secured lender.

The trustee in bankruptcy of a securities firm sought directions on how to calculate a customer's “net equity” under s. 253 of the Bankruptcy and Insolvency Act in the context of the firm’s insolvency.

The dispute concerned whether post‑bankruptcy mark‑to‑market adjustments for commodity futures contracts should be included in the calculation of the customer’s claim.

The customer argued that daily settlement obligations inherent in futures contracts required inclusion of post‑bankruptcy adjustments.

The court held that net equity must be calculated based on the liquidation value of securities positions as of the date of bankruptcy, without adjustments for post‑bankruptcy mark‑to‑market fluctuations.

The trustee’s interpretation was preferred as consistent with the statutory language and the objectives of Part XII of the Bankruptcy and Insolvency Act.

In CCAA proceedings, the applicant sought approval of a sale transaction involving substantially all of its pulp mill assets pursuant to s. 36 of the Companies’ Creditors Arrangement Act.

Certain creditors opposed the transaction and urged the court to consider a late competing offer that proposed a higher purchase price.

The court held that the sales process had been extensively marketed internationally, complied with the court‑approved process, and was conducted with the oversight of the monitor and consultation with key stakeholders including the Province.

Applying the Soundair principles and s. 36(3) of the CCAA, the court found that the monitor had acted prudently, the process maintained integrity and fairness, and the later competing offer did not demonstrate that the accepted transaction was improvident.

The court approved the transaction and granted the requested vesting order.