John J. Salmas

This endorsement grants several orders sought by the Applicants in ongoing Companies' Creditors Arrangement Act (CCAA) proceedings, including approval of the Monitor’s reports and activities, amendment of reporting obligations, addition of Block 6 Holding Inc. as an Applicant, approval of a property sale and related distributions, and the appointment of a mediator to address cost allocation issues among financiers.

The court finds all relief appropriate and supported by the record.

This decision concerns motions brought by Pride Group Holdings Inc. and related applicants under the Companies' Creditors Arrangement Act (CCAA) for interim relief in their restructuring proceedings.

The court addresses requests for approval of interim distributions, payment of direct costs, application of deferred payments for working capital, and approval of certain activities of the Monitor.

The court grants the requested relief, finding it necessary to maintain liquidity and continue the wind-down process, and holds that the proposed mechanisms are equitable and consistent with the CCAA’s remedial objectives.

In a CCAA proceeding, the Applicants sought three orders: approval of a factoring portfolio purchase agreement, approval for distribution of proceeds from a property sale, and permission for a creditor to sell certain vehicles.

The court approved the distribution of Chehalis property proceeds to Roynat.

For the Regions vehicles, the court granted the order allowing Regions to take possession, setting a 30-day retrieval period and approving storage costs of $35/day.

The motion for approval of the JD Factors Purchase Agreement was adjourned to a later date, as Mitsubishi HC Capital Canada Inc. objected, claiming ownership of the receivables and requiring more time to prepare its position.

In a Companies' Creditors Arrangement Act (CCAA) proceeding, the applicants sought court approval for the sale of a real property, the Monitor's reports, a revised governance protocol, and a sale and investor solicitation process (SISP) for their logistics business.

The court approved the property sale, finding it met the Soundair Principles despite not being a court-supervised process.

The Monitor's reports and activities were also approved.

The proposed SISP was approved with a minor amendment requiring the Monitor to consult directly affected secured creditors.

The Revised Governance Protocol, which included default commission rates for vehicle sales and collections, was approved as an interim measure, balancing the need for cost recovery with creditor concerns, noting that financiers could negotiate alternative rates or withhold consent to sales.

The applicants, Pride Group Holdings Inc. et al., sought an amended and restated initial order under the CCAA, including an extension of the stay period, approval of a debtor-in-possession (DIP) facility, elevation of charge priorities, confirmation against set-off, and approval of governance, real estate monetization, and intercompany/unsecured claims preservation protocols.

The court granted the requested stay extension to June 30, 2024, approved the $30 million DIP facility, and approved all proposed protocols.

The court declined to add an exception to the paramountcy provision as requested by certain securitization funders and approved a carve-out for Triumph Business Capital but limited it to CDN $3 million.

Carillion Canada Inc. brought a motion within its CCAA proceedings for an order directing HSBC Bank Canada to return $6.8 million that HSBC had unilaterally debited from Carillion's operating account to set off obligations under letters of credit.

The court found that while HSBC breached the initial stay order by exercising self-help without seeking leave, the funds were legally available for set-off.

Applying the Supreme Court's guidance in Montréal, the court held that HSBC's claim was a valid 'pre-pre' set-off preserved under section 21 of the CCAA.

The motion was dismissed, but HSBC was ordered to pay $50,000 in costs due to its conduct in breaching the stay.

The court addressed the issue of who should pay costs previously awarded after dismissing a motion brought by Bending Lake Iron Group Limited (BLIG).

The BLIG motion was deemed an abuse of process, a collateral attack on prior orders, and res judicata, with BLIG lacking standing due to its bankruptcy.

The court ordered that the costs be paid jointly and severally by BLIG's lawyer, Robert MacRae, and its directors and officers (Henry Grant Wetelainen, J. Chris Bailey, Dawn Elaine Mackay-Daynes, and Henry Clayton Wetelainen), citing the broad discretion under the Bankruptcy and Insolvency Act and Rule 57.07 of the Rules of Civil Procedure for personal costs against lawyers.

The United Steelworkers Local Union 2251, supported by USW Local 2724 and Essar Algoma retirees, brought a motion to qualify a "Subject Bidder" as a Phase II Bidder in a Companies' Creditors Arrangement Act (CCAA) proceeding.

The Subject Bidder had been disqualified by Essar Algoma, its Chief Restructuring Advisor, Financial Advisor, and the Monitor for failing to provide satisfactory evidence of financial capability to consummate a transaction.

The union argued it was not properly consulted in the disqualification decision and that it should have been allowed to meet with the Subject Bidder.

The court dismissed the motion, finding that the union's consultation rights under the Sale and Solicitation Process (SISP) did not extend to decisions on a bidder's financial capability, and that the court should not second-guess the business judgment of the CCAA applicants and their professionals.