In CCAA proceedings arising from the wind-down of a national retail chain, a pharmacy franchisee association moved to set aside disclaimer notices delivered in respect of franchise agreements for in-store pharmacies, and sought representative status, counsel, a financial advisor, and estate-funded professional fees.
The court held that the statutory factors under s. 32(4) of the Companies’ Creditors Arrangement Act favoured permitting the disclaimers to stand, as store closures were inevitable, the monitor had approved the notices, setting them aside would delay liquidation and divert estate value from unsecured creditors generally, and no evidence showed continued operation in dark stores would improve the franchisees’ financial circumstances.
The court nevertheless found limited collective representation would assist with transition issues including regulators, inventory return, and claims, and appointed the association as representative, with counsel and a financial advisor.
Funding of up to $100,000 inclusive of disbursements and HST was approved, but no administrative charge was granted.
