John Finnigan

In the receivership of the Bridging Funds, the Receiver brought a motion to determine whether unitholders with Potential Statutory Rescission Claims (based on misrepresentations in offering memoranda) or Potential Redemption Claims (based on unfulfilled redemption requests) were entitled to priority over General Unitholder Claims.

The court held that Potential Redemption Claims were not entitled to priority because the redemption requests had not been completed prior to the receivership.

However, the court held that Potential Statutory Rescission Claims were entitled to priority, finding that the statutory right of rescission under s. 130.1(1) of the Securities Act creates a de facto priority and justifies the imposition of a constructive trust over the invested funds.

The Receiver brought a motion for court approval of multiple settlement agreements resolving litigation arising from the receivership of Distinct Infrastructure Group Inc., and for a sealing order over the confidential settlement terms.

The court approved the settlements, finding them to be a fair and reasonable commercial resolution.

The court also granted the sealing order, applying the Sherman Estate test and finding that the public interest in promoting settlements and preserving commercially sensitive information outweighed the negative effects on the open court principle.

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 Receiver brought a motion for an order approving a proposed sale and investment solicitation process (SISP) and authorizing the disclosure of Borrower Information to Qualified Bidders.

The court found that the proposed SISP satisfied the test for approval, as it was fair, transparent, and optimized the chances of securing the best price.

The court also authorized the disclosure of Borrower Information, finding that the best interests of investors could be jeopardized without such disclosure, and noting that all borrower concerns had been resolved and confidentiality obligations would apply to bidders.

The motion was granted.

Two competing teams of legal counsel sought carriage of a proposed securities class action against CannTrust Holdings Inc. and other defendants for alleged misrepresentations regarding unlicensed cannabis production.

The court granted carriage to the Consortium team, finding that the competing TGF/RG team had a disqualifying conflict of interest because they excluded RBC Dominion Securities Inc., a current client of one of the firms, as a defendant.

The court held that excluding a necessary defendant to prefer a client's interests prejudiced the proposed class members by reducing potential recovery.

The applicants sought costs following a motion for the production of documents.

Both parties claimed success on the motion.

The court found that the applicants were substantially more successful, as the respondent's principal position was that no disclosure should be ordered, forcing the applicants to bring the motion.

The court awarded the applicants costs fixed at $11,500 on an all-inclusive basis, reflecting a reduction for their lack of success on an alternative argument.

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.