Jeremy Dacks

The Applicants in a CCAA proceeding moved for a reverse vesting order to approve a transaction with a purchaser related to a secured creditor, Marzilli.

The transaction would vest out the first-ranking security interest of another creditor, 212, and transfer its debt to a residual entity with no assets. 212 opposed the motion, arguing its debt assumption was part of the stalking horse bid that set the floor for the sales process.

The court applied the Third Eye and Harte Gold factors, finding that 212 had not consented to the vesting out of its interest and that the equities favoured 212.

The court dismissed the motion for the reverse vesting order, concluding it was not equitable to extinguish 212's first-ranking security interest under the circumstances.

The Applicants, a group of retail energy providers under CCAA protection, brought a motion seeking approval of a going-concern sale transaction to be implemented through a reverse vesting order (RVO).

The business is highly regulated and depends on numerous non-transferable licenses across multiple jurisdictions.

The court found that the RVO was the only viable structure to preserve the going-concern value of the business and maintain necessary regulatory approvals.

Applying the Soundair principles and section 36(3) of the CCAA, the court approved the transaction and granted the RVO, along with an order granting the Monitor enhanced powers to implement the transaction.

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.

In the context of CCAA proceedings, the applicants brought a motion to approve a Support Agreement, a Backstop Commitment Letter, and a Meetings Order.

The court approved the uncontested portions of the agreements and the Meetings Order.

The court also determined that there would be two classes of creditors for voting on the Plan: a Secured Creditor Class and an Unsecured Creditor Class, with the latter including Term Loan Lenders and various class action plaintiffs.

The court ordered expedited summary proceedings to value the class action claims and requested supplementary submissions on the differential consideration offered to unsecured creditors.

In the context of a complex CCAA restructuring, the applicants sought approval for several motions, including a second Key Employee Retention Plan (KERP), an extension of the stay of proceedings, an extension of the DIP financing facility, and two corporate transactions involving the wind-up of subsidiaries.

US class action plaintiffs opposed the KERP and DIP extension, arguing they would deplete the estate.

The court approved all requests, finding the KERP and DIP extension necessary to maximize creditor recovery and advance a restructuring plan.

The court also used its broad jurisdiction under s. 11 of the CCAA to approve a corporate dissolution that technically violated the solvency requirements of the CBCA, as the transaction benefited the estate and did not prejudice stakeholders.

The Receiver brought a motion to extend the appointment of limited partner advisory committees, approve its activities, and approve a process for appointing Representative Counsel for the Unitholders.

The Ad Hoc Committee of Retail Investors raised concerns about the independence of the proposed appointment process.

The court approved the Receiver's activities and the extension of the committees, but modified the Representative Counsel appointment process to include an independent third party to evaluate proposals and make a recommendation to the court.

The plaintiff in two proposed class actions alleging a price-fixing conspiracy in the canned tuna industry brought a motion for approval of a third-party litigation funding agreement.

The plaintiff could not bear the financial burden of funding the required expert evidence.

After extensive negotiations and due diligence, the plaintiff entered into an agreement with Lake Whillans Fund.

The court applied the four-factor test for approving third-party funding agreements and found the agreement to be necessary for access to justice, fair, reasonable, and protective of the defendants' interests.

The motion to approve the funding agreement was granted.

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 applicants in CCAA proceedings sought an extension of the Stay Period to April 15, 2016, as they prepared an Amended and Restated Plan of Compromise.

The court found the parties were working in good faith and with due diligence, and granted the extension.

The court also approved an agreement to lift the Co-Tenancy Stay on acceptable terms and extended the Notice of Objection Bar Date.

Third party lenders sought declarations in CCAA proceedings that funds, brokered payday loans, and receivables advanced through the debtor company were their property and not assets of the debtor estate.

The court examined the written broker agreements and the parties’ actual practices, including commingling of funds, guaranteed returns to lenders, and capital protection arrangements that insulated lenders from loan losses.

The evidence showed the lenders received fixed 17.5% returns irrespective of customer loan performance and that all loan proceeds and repayments flowed through the debtor’s general accounts.

The court held that the parties’ conduct varied the broker agreements and created a debtor–creditor relationship rather than a trust or agency relationship.

The lenders’ motions for declarations of ownership were dismissed and the disputed receipts were held to belong beneficially to the debtor.

The Applicants, operating a network of alternative financial services branches across Canada, sought initial protection under the Companies' Creditors Arrangement Act (CCAA) due to a severe liquidity crisis and regulatory challenges.

The court found the Applicants to be insolvent and granted a stay of proceedings to provide breathing space for restructuring.

The court confirmed its jurisdiction to hear the matter in Ontario, as the Applicants' chief place of business is located there.

However, the court deferred the request for a DIP financing charge to allow other stakeholders time to respond.