Kenneth David Kraft

The moving party, a debtor company in receivership, sought leave to appeal an order approving the sale of its assets by a court-appointed receiver.

The moving party argued that the receiver acted unfairly, that the debtor's management retained the right to negotiate a restructuring, and that the receiver failed to consult with affected Aboriginal communities.

The Court of Appeal dismissed the application for leave to appeal, finding that the debtor's parallel negotiations contravened the receivership order, the receiver had exclusive authority to market the assets, and the Aboriginal consultation issue was raised too late and lacked an adequate evidentiary record.

The Receiver brought a motion for directions to determine whether the debtor required leave to appeal an Approval and Vesting Order that transferred the debtor's property to a purchaser.

The debtor argued it had an automatic right of appeal under sections 193(a), (b), and (c) of the Bankruptcy and Insolvency Act.

The Court of Appeal held that the order did not involve future rights, would not affect other cases of a similar nature in the proceeding, and did not involve property exceeding $10,000 in value within the meaning of the Act.

The motion was granted, the debtor's notice of appeal was quashed, and a timetable was set for a leave to appeal motion.

The appellants, holding unsecured crossover bonds, appealed a CCAA judge's decision that the common law 'interest stops' rule applies in CCAA proceedings, preventing them from claiming post-filing interest above their principal debt and pre-petition interest.

The Court of Appeal dismissed the appeal, confirming that the 'interest stops' rule is a fundamental tenet of insolvency law that applies to CCAA proceedings to ensure fair treatment of creditors and orderly administration.

The Court clarified that while creditors cannot legally claim post-filing interest, the rule does not preclude a negotiated CCAA plan from providing for such payments.

In a joint cross-border insolvency trial concerning the allocation of approximately $7.3 billion in lockbox funds from the sale of global business lines and residual intellectual property, the court interpreted the Master R&D Agreement as an operating transfer-pricing document that granted limited licence rights but did not govern post-insolvency allocation.

The court rejected both the position that one Canadian debtor owned all sale proceeds by virtue of legal title and the position that the EMEA debtors jointly owned all intellectual property by operation of law.

Applying unjust enrichment principles and the broad remedial jurisdiction available in CCAA proceedings, the court held that a just result required a pro rata allocation among debtor estates based on allowed claims.

The court further directed that duplicate claims be counted only once for allocation purposes, that intercompany claims be included, and that interim distribution proposals be brought forward.

In CCAA proceedings involving a debtor company whose assets had already been sold and where no plan of arrangement was contemplated, the representative plaintiff in a proposed securities class action moved to lift the stay of proceedings and to amend the claims procedure order after failing to file a proof of claim by the claims bar date.

The directors argued that the claims procedure barred the class action against them and extinguished related claims, including access to insurance proceeds.

The court held that both the stay and the claims bar order are discretionary tools intended to facilitate restructuring or liquidation objectives under the CCAA.

Because the restructuring process had effectively concluded and no plan was forthcoming, using the claims bar order to extinguish the class action would serve no functional purpose under the CCAA.

The court exercised its discretion to lift the stay and modify the claims procedure order to permit the plaintiff to proceed with the class action.

The appellant appealed a decision declaring that the respondent's debt would be released by his discharge from bankruptcy.

The respondent had acted as a 'straw borrower' and co-signed a mortgage application, unaware that the primary borrower had made fraudulent misrepresentations.

The appellant argued the debt should survive bankruptcy under s. 178(1)(e) of the Bankruptcy and Insolvency Act due to false pretences.

The Court of Appeal dismissed the appeal, holding that s. 178(1)(e) requires a causal connection between the bankrupt's false pretences or fraudulent misrepresentation and the obtaining of the property.

The trial judge correctly found the mortgage funds were advanced based on the primary borrower's misrepresentations, not the respondent's.

In proceedings under the Companies’ Creditors Arrangement Act, the court addressed scheduling issues for a complex multi‑party trial involving the allocation of assets among creditor groups.

The parties proposed deferring the trial from April 1, 2014 to April 28, 2014, but disagreement remained regarding whether the later date would be feasible.

The court concluded that maintaining the earlier date risked a chaotic trial and that a rolling start date would create further uncertainty.

To ensure certainty and orderly preparation, the court rescheduled the trial to begin May 12, 2014 for 20 days and set case management and trial management conferences.

The court also required all parties to provide comprehensive fee and disbursement summaries to monitor escalating litigation costs.

In a CCAA proceeding, the Applicants (Hollinger Inc. et al.) sought approval of settlement agreements with their former auditors (KPMG) and lawyers (Torys).

The Non-Settling Defendants, including Conrad Black and David Radler, opposed the settlements, arguing the court lacked jurisdiction and that the included third-party releases and bar orders would deprive them of procedural rights to discovery.

The court held it had jurisdiction under the CCAA to manage litigation as a corporate asset.

The court approved the Pierringer-style settlements, finding that the procedural rights of the Non-Settling Defendants could be adequately protected through active case management and the application of the principle of proportionality in discovery.

The appellants appealed a sealing order that redacted the amounts to be paid under two proposed settlement agreements in a CCAA proceeding.

The appellants argued the sealing order unjustifiably infringed the open court principle.

The Court of Appeal dismissed the appeal, finding that litigation settlement privilege applied to the settlement agreements until approved by the court.

The court held that the sealing order was a minimal intrusion on the open court principle, the requirement to sign a confidentiality agreement did not impose an undue burden, and the respondents did not waive privilege by complying with the court order.

The tenant obtained creditor protection under the CCAA and sent a letter to the landlord repudiating its commercial lease.

The landlord did not acknowledge or accept the repudiation.

The tenant subsequently went bankrupt, and the trustee in bankruptcy disclaimed the lease, disallowing the landlord's claim for unrecoverable expenses for the remainder of the lease term.

The landlord's successor appealed the dismissal of its motion to set aside the disallowance.

The Court of Appeal dismissed the appeal, holding that an unaccepted repudiation does not terminate a lease, and therefore the lease remained in effect at the date of bankruptcy and was subject to the trustee's statutory disclaimer.

Appeals and cross-appeals arising from the collapses of two airlines operating leased aircraft and leaving substantial unpaid airport and civil air navigation charges.

The Court held that legal titleholders were not personally liable for unpaid navigation charges under s. 55 of the Civil Air Navigation Services Commercialization Act because 'owner' was limited to persons with legal custody, control, or possession in the statutory context.

However, the seizure and detention remedies under s. 56 of that Act and s. 9 of the Airport Transfer (Miscellaneous Matters) Act operated against aircraft owned or operated by the defaulting airlines and could not be defeated by leasing arrangements or by separating attached engines.

The remedies extended to security posted in substitution for the aircraft, subject to the motions judges’ supervisory discretion to craft fair terms.

Interest continued to run until payment, posting of security, or bankruptcy.

The appellant appealed from an order of the Superior Court of Justice.

The Court of Appeal found that although the material before the motion judge was somewhat deficient, there was no palpable and overriding error in her reasons.

The appeal was dismissed with costs fixed at $4,500.

The respondents, having been largely successful on the main appeals concerning the interpretation of seizure and detention remedies under the Airport Transfer (Miscellaneous Matters) Act and the Civil Air Navigation Services Commercialization Act, sought costs totaling over $631,000.

The court declined to award costs to any party.

The court reasoned that the proceedings raised novel issues of statutory interpretation that engaged the public interest, the respondents were not completely successful as their cross-appeals were dismissed, and the appellant airport authorities acted reasonably in bringing the appeals given the lack of established jurisprudential authority.

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.