Kenneth D. Kraft

The applicant, an experienced litigation lawyer, sought leave to bring a motion to set aside the Registrar's dismissal of his appeal in a bankruptcy proceeding.

The appeal had been dismissed for failure to perfect it within the ordered timeframe.

The court found that the applicant's conduct, including repeated delays and failure to comply with rules, indicated an attempt to stall the enforcement of the bankruptcy order.

The motion for leave was dismissed with costs.

The applicant, Bluecore Capital Inc., brought a bankruptcy application against the respondent, Sergio Grillone, a former lawyer, based on his failure to repay a litigation funding loan.

The respondent brought a motion for a mis-trial, alleging evidence tampering and perjury by the applicant's counsel and witness regarding the version of the loan agreement entered into evidence.

The court dismissed the mis-trial motion, finding the evidentiary irregularities were inadvertent and did not cause a miscarriage of justice.

The court granted the bankruptcy application, finding the applicant proved a debt exceeding $1,000 and an act of bankruptcy.

The court held that special circumstances existed to allow a single creditor application due to the respondent's litigious conduct and the multiplicity of claims against him, making a bankruptcy proceeding the most efficient way to manage his estate.

The applicants sought orders under section 61 of the CCAA to recognize and give effect in Canada to two orders made in their US Chapter 11 bankruptcy proceedings.

The US orders established a claims bar date and discharged claims not filed by that date.

The applicants sought to use these orders to bar the respondents' claims in an ongoing Ontario tort action.

The court dismissed the application, holding that the applicants should seek enforcement of the US orders within the specific Ontario action rather than seeking a general recognition order under section 61 of the CCAA.

This approach allows the court in the action to assess the equities on a party-by-party basis.

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.