Jeremy Elliott Dacks

On an unopposed insolvency motion under Part III of the Bankruptcy and Insolvency Act, the moving parties sought sanction of an amended consolidated proposal with substantive consolidation and a broad third-party release.

The court applied the section 59(2) reasonableness-and-benefit test, considered good faith and creditor voting support, and accepted that the proposal met statutory requirements.

The court held that third-party releases were permissible in the circumstances and interpreted the statute harmoniously with restructuring principles applied under related insolvency legislation.

Applying the Metcalfe criteria, the court found the release was necessary, supported by tangible contributions, and beneficial to creditors generally compared with bankruptcy alternatives.

The sanction order was granted.

The moving parties, Global Payments Direct Inc. and Global Payments Canada Inc., sought to expedite and consolidate the hearing of their motion for leave to appeal and the appeal itself from an order in Air Canada's CCAA proceedings.

The moving parties sought security for their exposure to credit card chargebacks.

The Court of Appeal held that while it had jurisdiction to consolidate the proceedings under Rule 2.03, such an order is exceptional.

The court expedited the leave motion and potential appeal but declined to consolidate them, finding the moving parties would not suffer substantial prejudice if the usual practice of separate hearings was followed.

The appellants, unsecured creditors, appealed orders sanctioning a plan of arrangement under the Companies' Creditors Arrangement Act (CCAA) and awarding costs against them.

The plan effectively eliminated any recovery for unsecured creditors, as the secured claims (over $60 million) far exceeded the maximum estimated value of the debtor's mining assets ($19.9 million).

The Court of Appeal dismissed the appeal, finding no error in the motion judge's acceptance of the asset valuation or his conclusion that the plan was fair and reasonable.

The Court also upheld the costs award, noting the appellants' opposition lacked a realistic basis.