Jay A. Carfagnini

The Monitor brought a motion to sanction the Canadian Debtors' Plan of Compromise and Arrangement under the CCAA, which implemented a settlement allocating $7.3 billion in sale proceeds.

Two self-represented long-term disability (LTD) beneficiaries objected, arguing the Plan was unfair and violated sections 7 and 15 of the Charter by treating their claims pari passu with other unsecured creditors.

The court found the Plan fair and reasonable, noting it was approved by 99.7% of creditors.

The court dismissed the Charter arguments, holding that section 7 does not protect pure economic interests and that equal treatment of creditors in insolvency does not constitute discrimination under section 15.

The Plan was sanctioned.

In CCAA proceedings involving a mining company, competing motions were brought concerning the restructuring process.

The debtor sought directions regarding the procedure for resolving noteholder claims and the alleged misuse of confidential information by certain creditors, while the noteholders sought an order convening a meeting of creditors to vote on their proposed plan of arrangement.

The court held that calling a creditors’ meeting was premature because the proposed plan conflicted with the debtor-in-possession financing facility, had been introduced without meaningful consultation, and unresolved claims and litigation issues could affect voting rights and recoveries.

The court dismissed the noteholders’ motion without prejudice and declined to order disclosure sought by the debtor.

The stay of proceedings was extended to facilitate continued negotiations and mediation.