Jason Wadden

The court-appointed receiver brought a motion seeking a declaration that the debtor had no automatic right of appeal from an Approval and Vesting Order under the Bankruptcy and Insolvency Act, and an order denying leave to appeal.

The debtor argued it had an automatic right of appeal under s. 193(a) or (c) of the BIA, or alternatively sought leave under s. 193(e).

The Court of Appeal held that the debtor had no automatic right of appeal, as the order did not affect future rights or result in a direct loss exceeding $10,000.

The Court also denied leave to appeal, finding the proposed appeal lacked merit, did not raise an issue of general importance, and would unduly hinder the insolvency proceedings.

The court-appointed receiver brought a motion for an approval and vesting order (AVO) to sell a real estate development property to a third-party purchaser.

A second mortgagee and joint venture participant brought a cross-motion to redeem the property or, alternatively, for approval of its credit bid.

The court dismissed the cross-motion, finding that allowing a redemption after a court-approved sale process had concluded would undermine the integrity of the process.

The court granted the receiver's motion, holding that the proposed sale satisfied the Soundair principles, as the receiver acted providently, considered all stakeholders' interests, and conducted a fair and commercially efficacious process.

The defendants were successful in obtaining a temporary stay of the Ontario action and sought costs of the motion on a partial indemnity scale.

The plaintiff argued that costs should follow the cause and be awarded upon final disposition, or that the parties should bear their own costs because the defendants were only partially successful.

The court rejected the plaintiff's arguments, finding the defendants were the successful parties and entitled to costs payable forthwith.

Costs were fixed at $23,687.55 on a partial indemnity scale.

The applicants and respondents, involved in a joint venture for a condominium development, experienced an irrevocable breakdown in their relationship.

Both sides agreed the property should be sold but disagreed on the mechanism: the applicants sought the appointment of a receiver, while the respondents sought a signing officer with limited powers.

The court found it just and convenient to appoint a receiver to conduct the sales process, concluding that a receivership would not stigmatize the property and that the receiver's powers could be appropriately tailored to consider existing offers.

In a CCAA proceeding, the court considered supplementary written submissions regarding the appropriateness of differential consideration offered to unsecured creditors in the proposed Plan.

The court accepted the applicants' submission that the fairness of the differential consideration, which involves providing shares to Term Loan Lenders and cash to General Unsecured Creditors, should be determined at the Sanction Hearing rather than at the Meetings Order stage, given the low threshold for a Meetings Order and the presence of conflicting expert reports.

The Applicants sought an Authorization Order and Meetings Order under the CCAA.

The primary issues in dispute concerned the voting rights and classification of Litigation Claimants, which included uncertified U.S. class actions, a certified Ontario class action, and Texas mass tort claims.

The court held that the Litigation Claimants are creditors entitled to vote, but restricted them to one vote per action to prevent them from overriding other stakeholders on numerosity grounds.

The court also ordered summary proceedings to value their claims rather than accepting the Applicants' proposal to value them at $1.

Finally, the court declined to place the Term Loan Lenders in a separate class from other unsecured creditors, finding sufficient commonality of legal interests.

The applicants sought an order requiring the respondent credit union to return approximately $5,000,000 that had been held in their accounts.

The credit union, under administration by the regulator, had unilaterally collapsed the applicants' term deposits and appropriated the funds, claiming a right of set-off under the Credit Unions and Caisses Populaires Act, 1994 for unliquidated damages related to alleged fraud and breach of fiduciary duty.

The court held that the statutory right of set-off does not permit a financial institution to unilaterally appropriate funds for unliquidated and disputed claims without judicial determination.

The court ordered the credit union to restore the accounts to their previous state and compensate the applicants for lost interest.

The receiver of a film animation studio brought a motion for directions regarding the distribution of approximately $1,150,000 in tax credits.

A priority dispute arose between the studio's secured creditor, who held a registered general security agreement, and several film producers who claimed the tax credits were assigned to them or held in trust pursuant to their production services agreements.

The court held that the producers' interests in the tax credits were, in substance, security interests under the Personal Property Security Act (PPSA).

Because the producers failed to register their interests under the PPSA, the secured creditor's prior registered security interest took priority.

The court declined to impose a constructive or Quistclose trust, noting that sophisticated commercial parties should not be relieved of their obligation to register security.

In the context of Target Canada's CCAA proceedings, the Monitor sought advice and directions on whether to accept amended claims filed by Bell Canada and Bell Nexxia.

Bell sought to increase its original claims by approximately $4.1 million due to inadvertent calculation errors discovered after the claims bar date and after the original claims were admitted.

Target Corporation opposed the amendment.

Applying the Blue Range test, the court found that Bell acted in good faith, the errors were inadvertent, and admitting the amended claims would not cause relative prejudice to other creditors.

The court directed the Monitor to accept the amended claims for review, with Bell to bear the reasonable costs incurred by the Monitor and Target Canada due to the error.

The moving party, Zayo Inc., previously had its motion dismissed.

The motion sought an order for the Monitor to pay Zayo $1,228,799.81 from the proceeds of the sale of the applicants' assets.

In this costs endorsement, Zayo argued that costs are not the norm in CCAA proceedings.

The court disagreed, finding this to be an exceptional case where the normal rule of costs should apply, as the real opponents (the secured lenders and the purchaser) were not insolvent.

The court awarded costs against Zayo, fixing them at $30,000 each for Primus and BMO, and $20,000 each for Birch and the Monitor.

In the context of the global insolvency of Nortel Networks, the UK Pension Claimants (UKPC) asserted multiple claims against the Canadian debtors (NNC and NNL).

The UKPC claimed for a contingent Financial Support Direction (FSD) under UK pension law, amounts under a Funding Guarantee and a Swift Guarantee, and remedies for oppression and unjust enrichment.

The court dismissed the FSD claim as too remote and speculative to constitute a provable claim in the CCAA proceedings.

The court also dismissed the claims under the Swift Guarantee, oppression, and unjust enrichment.

However, the court allowed the UKPC's claim under the Funding Guarantee, finding NNL liable for £339.75 million.