Jennifer Stam

The court granted a bankruptcy order against Thomas Dylan Suitor, finding that the applicant, The Fuller Landau Group Inc. (as Receiver of The Lion’s Share Group Inc.), established the necessary statutory requirements under the Bankruptcy and Insolvency Act.

The court found that Mr. Suitor was personally liable under promissory notes as both borrower and guarantor, that he owed debts exceeding $1,000, and that he had ceased to meet his liabilities generally as they became due.

The court also found the existence of multiple creditors and/or special circumstances justifying the order, and declined to exercise its discretion to refuse the order.

The applicants, a group of real estate development entities (Ashcroft Homes Group), sought to extend an initial Companies' Creditors Arrangement Act (CCAA) stay of proceedings to facilitate a restructuring.

Secured creditors, representing 84% of the total secured debt, opposed the extension and instead moved for the appointment of interim receivers.

The court found the applicants' restructuring plan lacked substance, noted a significant loss of confidence in management due to past conduct and outdated property valuations, and determined that the collaborative receivership approach proposed by the majority of secured creditors was more appropriate.

The motion to extend the CCAA stay was dismissed, and the motions for the appointment of receivers were granted.

The Receiver of The Lion's Share Group Inc. brought a motion to appoint an interim receiver over the property of the debtor pursuant to section 46 of the Bankruptcy and Insolvency Act.

The Receiver argued that the debtor owed over $23 million under various promissory notes and personal guarantees, and that an interim receiver was necessary to prevent the dissipation of assets.

The debtor opposed the motion, arguing he was not personally liable under the guarantees and that the transactions in question were in the ordinary course of business.

The court granted the motion, finding that the Receiver was likely to succeed on the bankruptcy application and that there was an immediate need to protect the estate given the debtor's recent transactions and the complex web of related entities.

The court-appointed Receiver of The Lion's Share Group Inc. (LS), a real estate investment company in insolvency, sought an order declaring certain promissory notes as valid charges on real property, requiring their registration, and expanding the receivership to include The Windrose Group Inc. The promissory notes, issued by LS to borrowers, included provisions for registration on title upon default, but the Land Registry Office required a court order.

Objecting noteholders requested an adjournment due to short service.

The court granted the Receiver's requests, finding the notes created equitable mortgages and that the matter was urgent due to the risk of asset dissipation.

The court also approved the expansion of the receivership and the Receiver's First Report, while providing a comeback hearing for affected parties to address any prejudice.

The Monitor in a CCAA proceeding sought court approval for a complex transaction involving a reverse vesting order (RVO) structure for the sale of electricity generation facilities of the Validus Entities to Macquarie and Far North Power Corp. The motion also requested the addition of a new entity (Residualco) as a debtor, approval of the Monitor's reports and fees, and an extension of the stay period.

The court granted all requested relief, finding the transaction commercially reasonable and in the best interests of stakeholders, particularly due to the highly regulated nature of the business which made an RVO necessary to preserve numerous permits and licenses.

The court also confirmed the appropriateness of the releases granted to various parties involved in the restructuring.

KSV Restructuring Inc., as court-appointed Monitor and Receiver for the Validus Entities (a group of power generation companies), brought motions seeking approval of a Sales and Investment Solicitation Process (SISP), authorization to implement it, approval of a Stalking Horse Bid by Macquarie Equipment Finance Ltd. and Far North Power Corp., approval of bid protections (break fee and expense reimbursement), approval of an Unknown Contract Bar Process, approval of Monitor's reports, and an extension of the stay of proceedings.

Additionally, the Receiver sought to increase its borrowing limit.

The Validus Entities opposed certain terms of the SISP and the Stalking Horse Offer, arguing the quantum owed to Macquarie was overstated, unconscionable, violated the anti-deprivation rule, and raised concerns about HST treatment.

The court granted all relief sought by the Monitor/Receiver, finding the SISP fair and transparent, the quantum owed to Macquarie correctly calculated under the sale-leaseback agreements, the anti-deprivation rule not engaged as the default was contractual, and the HST issues appropriately deferred to a transaction approval motion.

The court emphasized the need for stability and timely action to maximize recovery.

The moving defendants brought motions to enforce settlement agreements dismissing two construction-related actions without costs.

The plaintiff opposed the motions, arguing the settlements were entered into due to misrepresentations, unconscionability, and misapprehension, and brought a cross-motion to join the actions to separate ongoing litigation.

The court found that a valid settlement was reached and rejected the plaintiff's arguments, noting that the alleged misrepresentations were based on double hearsay and the plaintiff was represented by capable counsel.

The court granted the motions to enforce the settlements and dismissed the cross-motion.

The Bondfield Group, a major construction company, sought CCAA protection due to insolvency, over $1 billion in active contracts, and over 200 lawsuits.

The application was unopposed and resulted from extensive stakeholder negotiations.

The court granted an initial order for CCAA protection, including a stay of proceedings, approval of a tailored $8 million Debtor-in-Possession (DIP) facility funded by Zurich Insurance, an Administration Charge for professional fees, and a Directors' Charge for $3 million (excluding John Aquino).

The court emphasized the public interest in completing critical infrastructure projects and the preference for CCAA over receivership to preserve enterprise value.

Self-represented long-term disability beneficiaries sought leave to appeal a sanction order from the Superior Court of Justice in the Nortel Networks CCAA proceedings.

The applicants challenged their binding status under the 2009 Representation Order for Disabled Employees and the 2010 Employee Settlement Agreement.

The Court of Appeal dismissed the motion for leave to appeal, finding that the stringent test for leave in CCAA proceedings was not met.

The proposed appeal lacked merit, the applicants were bound by the settlement agreement, and further delays in the protracted litigation were to be avoided.

The court also rejected a late-filed notice of constitutional question challenging sections 6(1) and 11 of the CCAA.

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.

In Companies’ Creditors Arrangement Act proceedings involving the Nortel corporate group, the Canadian debtor entities moved for approval of an Allocation Protocol governing the distribution of sale proceeds among various affiliated estates and stakeholders.

The court approved the protocol substantially in the form originally proposed, subject to modifications requiring reliance on the June 7, 2011 protocol version and expansion of the list of “core parties” to include additional indenture trustees.

The court directed the Monitor to prepare a revised list of core parties and coordinate a litigation schedule for resolving allocation disputes.

A cross-motion by the Joint Administrators of a UK affiliate seeking to compel arbitration of allocation disputes under the Interim Funding and Settlement Agreement was dismissed.

The appeal period was deferred until the release of full reasons coordinated with reasons of the United States Bankruptcy Court for the District of Delaware.

The applicant corporation sought relief under the Companies’ Creditors Arrangement Act including an initial order, a stay of proceedings, approval of a sale process, and authorization of administration and directors’ charges.

The court considered whether the corporation qualified as a debtor company and whether the requested restructuring steps were appropriate in the circumstances of significant financial distress and ongoing investigations.

The court accepted that the corporation was insolvent and that a restructuring under the CCAA was necessary to preserve enterprise value and explore a potential sale of business operations.

The court approved the requested charges, authorized the sale process, and granted ancillary relief including recognition proceedings in foreign jurisdictions.