Jeffrey Spiegelman

The Monitor of the Canadian Debtors of Nortel Networks sought court approval for two environmental property settlement agreements concerning the Belleville and Brockville properties under the Companies’ Creditors Arrangement Act (CCAA).

These settlements aimed to resolve significant environmental liabilities, crystallize claims, and facilitate further distributions to creditors.

The court granted the motion, approving both the MECP Belleville Settlement and the Brockville Settlement, finding them fair, reasonable, beneficial to stakeholders, and consistent with the CCAA's objectives, including the provision of third-party releases.

The Bank of Montreal (BMO) opposed the confirmation of a referee's report regarding a costs award in a CCAA proceeding.

The referee had fixed BMO's costs at $50,000 on a partial indemnity basis, finding that BMO's participation in the lien claimant litigation contributed little and was largely unnecessary, limiting costs to "salvage costs." BMO argued its extensive costs were caused by the Private Mortgagees' actions in asserting priority over lien claimants, which forced BMO's full participation.

The court, applying a deferential standard of review for referee reports, found no patent misapprehension of evidence or error in principle by the referee.

The court upheld the referee's decision, concluding that BMO should have sought costs from lien claimants or put Private Mortgagees on notice of its claim.

BMO's alternative argument to tack costs onto its security via debenture provisions was also rejected as res judicata, as the referee had already determined reasonable costs.

The appellant appealed a Master's order requiring it to pay security for costs.

The Master had found that the appellant, a foreign corporation, had insufficient assets in Ontario and failed to demonstrate impecuniosity on a balance of probabilities due to inadequate financial disclosure and credibility issues with its principal.

The Superior Court of Justice applied the palpable and overriding error standard of review and found no basis to interfere with the Master's assessment of the evidence.

The appeal was dismissed.

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.