Jane O. Dietrich

An insolvent cannabis contract manufacturer filed a notice of intention to make a proposal under s. 50.4(1) of the Bankruptcy and Insolvency Act and sought orders approving DIP financing, a further stay extension, a SISP with a stalking horse bid, and related charges.

The court raised concerns about the SISP because the stalking horse agreement had not yet been executed, the milestones were abbreviated, the treatment of employees and contracts was uncertain, and a break fee was contemplated before any definitive agreement existed.

Following a standdown, the company abandoned pursuit of the full relief and requested only a brief stay extension to February 17, 2026.

The court was satisfied that the three-part test under s. 50.4(9) of the BIA was met and granted the short extension, finding no evidence of bad faith, no material prejudice to creditors, and sufficient liquidity for the brief period.

The moving parties sought to set aside two international arbitral awards under Article 34 of the UNCITRAL Model Law, alleging inability to present their case, excess of jurisdiction, and inadequate reasons.

The court found a procedural fairness breach where the arbitrator made a proper-party finding without submissions, but held the issue was not material in context because separate findings eliminated personal liability on other grounds.

The court rejected the jurisdiction and insufficiency-of-reasons challenges, emphasizing the narrow scope of intervention and deference to international arbitral awards.

Exercising discretion under Article 34, the court declined to order a new arbitration.

The application was dismissed.

The moving parties sought a finding that the respondents breached an interim order restraining the founder and controlling shareholder from participating in management of a publicly traded company and restraining the shareholder from using voting shares to remove directors.

The court found the founder in contempt for communications to the SEC that constituted indirect participation in management, but declined to find contempt against the shareholder and company, finding the relevant order provision was declaratory rather than directive.

The court scheduled a penalty phase to consider purging of contempt.

The Monitor and the Van Iersel Parties brought motions for security for costs against Kenneth Schaller, a former shareholder of three debtor companies in a CCAA proceeding.

Schaller filed a wide-ranging motion seeking to reopen the CCAA proceedings, set aside the approval and reverse vesting order, and replace the Monitor, alleging fraud and misconduct.

The court found that Schaller appeared to be ordinarily resident outside Ontario and that there was good reason to believe the motion was frivolous and vexatious.

The court ordered Schaller to post security for costs totalling $400,000 ($250,000 to the Monitor and $150,000 to the Van Iersel Parties).

The decision also addressed Schaller's submission of AI-hallucinated case citations, finding this to be a serious breach of his obligation to verify authorities submitted to the court.

The applicant sought to enforce paragraph 7 (the "Comeback Provision") of an arbitral award dated June 20, 2024, which permitted any party to bring the matter back before the arbitrator for guidance regarding the sale process of real property.

The respondents opposed enforcement, arguing the provision fell within the exceptions under section 50(7) of the Arbitration Act because it was not a remedy a court would grant.

The court found that the provision was made on consent, was limited to matters involving the property sale process, did not limit counsel rights, and did not require expedited hearings.

The court distinguished the case from Thompson v. Thiessen and enforced the Comeback Provision.

The Estate Trustee of a deceased shareholder sought oppression remedy relief and alleged breach of natural justice regarding the valuation of the deceased's 50% shareholding in a steel fabrication company.

The valuation was conducted by a professional valuator (Crowe) pursuant to a shareholders agreement.

The Estate Trustee challenged the valuation methodology, claiming the respondent director provided inaccurate and self-serving information regarding holdback amounts, related party expenses, and goodwill attribution.

The Estate Trustee also claimed it should have been involved in the valuation process.

The court dismissed the application, finding no oppression and holding that natural justice principles do not apply to expert determinations under commercial contracts.

The applicants sought to convert an application into an action and consolidate it with a related action.

The respondents opposed, seeking to strike the action for lack of corporate authority and arguing against consolidation.

The court found that while the action was technically deficient due to improper director authorization, the appropriate remedy was a stay pending delivery of a properly authorized resolution, not dismissal.

The court granted consolidation and conversion of the application to an action, finding substantial overlap in the pleadings and common factual and legal issues.

The applicants were substantially successful and awarded costs of $75,000.

The interim receiver sought an order to release holdback funds totaling $449,881.87 to be added to the proposal fund for distribution among creditors.

The respondent claimed the funds based on a mortgage that had been discharged and alternatively sought a constructive trust.

The court found that the mortgage constituted both a fraudulent conveyance under the Fraudulent Conveyances Act and an unjust preference under the Assignments and Preferences Act.

The court dismissed the respondent's motion and granted the interim receiver's motion, allowing the holdback funds to be distributed to creditors in accordance with the approved proposal.

A defendant sought to vary a Mareva injunction and Norwich order granted in connection with allegations of a fraudulent scheme involving the misappropriation of public funds earmarked for homelessness relief.

The defendant sought to exclude future income from the Mareva Order's scope, obtain monthly releases for living expenses and a one-time release for outstanding debts, remove the passport surrender requirement, and remove a phone number from the Norwich Order.

The court dismissed all aspects of the motion, finding the defendant had not met the required test for varying the Mareva Order due to lack of full and frank disclosure, and that the passport requirement and Norwich Order remained appropriate given the circumstances.

The court considered a motion for summary judgment by Jonathan Rosenthal, in his personal capacity, seeking dismissal of the oppression claim brought against him by Paragon Protection Ltd. and Rosencrantz & Guildenstern Inc. The central issue was whether the plaintiffs were proper "complainants" under section 245 of the Ontario Business Corporations Act and thus had standing to advance an oppression remedy claim.

The court found that the plaintiffs, not being current or former security holders or creditors of Tamstu-Harjon Holdings of Canada Limited, could not qualify as proper complainants based solely on their status as potential creditors arising from the litigation itself.

The motion for summary judgment was granted, dismissing the claim against Mr. Rosenthal personally.

The decision concerns the interpretation of a settlement agreement between siblings Marvin Rubner, Joseph Rubner, and Brenda Bistricer regarding the division of special shares in Kalber Developments Incorporated, a family corporation, and the estate of their mother, Eda Rubner.

The court finds that the Kalber Settlement Agreement and the Will Settlement Agreement do not operate as a disclaimer or renunciation by Brenda of her interest in the special shares, and that Joseph, not being a party to the agreements, cannot claim a benefit under them.

The application by Marvin is granted, and costs are fixed against Joseph.

The Applicants, Apollo Technology Capital Corporation and Nobul Technologies Inc., sought orders regarding the conduct of the upcoming annual general meeting (AGM) of MediPharm Labs Corp., including the appointment of an independent chair, the appointment of TSX Trust as scrutineer, and a declaration regarding the validity of their Dissident Circular.

The Court declined to grant the requested relief, finding no evidence of impropriety or unfairness in the process established by MediPharm’s by-laws and confirming that the issues raised could be addressed after the AGM if necessary.

The court considered whether to dismiss a bankruptcy application brought by Bioventus, LLC against Trindent Consulting Management International Inc. under section 43(7) of the Bankruptcy and Insolvency Act, in light of Trindent’s prior U.S. Chapter 7 bankruptcy.

The court found that Canadian law allows for concurrent insolvency proceedings and that the statutory remedies under the BIA are not property of the debtor’s estate.

The motion to dismiss was denied, and the bankruptcy application may proceed.

The applicant, Harry Littler, a director of CMC Credit Ltd., sought an order compelling the respondents to provide access to CMC’s books and records, including loan agreements.

The respondent, Michael Smith, objected on the basis of privacy legislation (PIPEDA) and alleged improper purpose.

The court found that directors have an unconditional statutory right to inspect corporate records under the Ontario Business Corporations Act, and that PIPEDA does not prevent such access.

The application was granted, and costs were fixed in favour of the applicant.

The court granted Jason Allison's motion for production of financial documents from CMC Consumer Credit Limited, CMC Capital Inc., and Michael Smith.

Allison was found entitled to the documents as a shareholder under a Shareholders’ Agreement, as a trust beneficiary, or as an intended director.

The court rejected the defendants’ arguments regarding clean hands, limitation periods, and the status of Allison as a defaulting or beneficial shareholder.

The court also fixed costs in Allison’s favour.

The applicant, Samer Bishay, sought an order under the Bank Act compelling the Bank of Montreal to reinstate his bank accounts, a trial on damages, and a Norwich Order for disclosure of information leading to the account closure.

The court found that s. 627.17 of the Bank Act only requires banks to open accounts under certain conditions, not to maintain them indefinitely, and that the common law right to terminate banking relationships on reasonable notice was not displaced.

The application was dismissed, including the request for a Norwich Order, as the applicant's claim was found to be speculative.

This decision concerns a comeback motion on a Mareva injunction originally granted against Alykhan Karmali and AK&H Ltd. The plaintiff, Latif Nanji, alleges that he was induced to invest millions of dollars in a business venture based on fraudulent misrepresentations by the defendants.

The court reviews the background of the investments, the lack of supporting documentation, and the use of funds by the defendants.

The court finds that the plaintiff has established a strong prima facie case for fraudulent misrepresentation and that the risk of dissipation of assets justifies the continuation of the Mareva injunction.

The decision concerns an application under section 192 of the Canada Business Corporations Act (CBCA) for approval of a plan of arrangement by The Cannabist Company Holdings (Canada) Inc. and 16834434 Canada Inc., opposed by Murchinson Ltd. (on behalf of certain noteholders).

The court granted the final order approving the arrangement, which restructures the company’s senior notes, and dismissed Murchinson’s related oppression application.

The reasons address the fairness and reasonableness of the arrangement, the appropriateness of third-party releases, and the standing of Murchinson to bring an oppression claim.

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.

This decision concerns three related matters: the appointment of a receiver over the assets of Sussman Mortgage Funding Inc. and related companies, the granting of a Mareva injunction against Sanford Sussman, and the scheduling of a motion to appoint representative counsel for investors.

The court finds the appointment of B. Riley Farber Inc. as receiver to be in the public interest and grants the Mareva injunction on consent.

The decision addresses the statutory and common law bases for receivership, the public interest in protecting investors, and the coordination of proceedings involving multiple stakeholders.