Kenneth Kraft

The bankrupt, a former real estate developer, sought an absolute discharge from bankruptcy.

The discharge was opposed by the Trustee, the Canada Revenue Agency, and several creditors, who argued that the bankrupt's assets were less than 50 cents on the dollar for reasons he could be held responsible for, and that he failed to perform his duties under the Bankruptcy and Insolvency Act.

The court found that the bankrupt had engaged in an asset protection strategy, incurred significant personal liabilities without the means to pay them, and failed to disclose his true post-bankruptcy lifestyle and use of a corporate credit card.

The court declined to refuse the discharge entirely but imposed a substantial conditional order requiring the bankrupt to pay $960,000 and fulfill various outstanding duties.

The Monitor in a CCAA proceeding brought an unopposed motion to extend the stay period, approve its activities, and approve its fees and those of its counsel.

The court found that the applicants had acted in good faith and with due diligence, and that the applicants had sufficient cash flow to operate during the proposed stay period.

The motion was granted, extending the stay period to January 31, 2024, and approving the Monitor's activities and fees.

The applicant sought specific performance of an alleged agreement to purchase the respondents' shares in a corporation involved in the Thai medical cannabis industry.

The court found that the email correspondence between the parties constituted an agreement in principle, but not a binding contract, as essential terms regarding due diligence and disclosure remained unresolved.

However, the court found that a subsequent rights offering proposed by the respondents, which would have significantly diluted the applicant's minority shareholding at a below-market price, was oppressive.

The application for specific performance was dismissed, but the rights offering was permanently enjoined.

The Liquidator of Silicon Valley Bank Canada sought court approval of an asset purchase agreement with National Bank of Canada, as well as a sealing order over the unredacted agreement and a confidential comparative analysis.

The court applied the Soundair principles and found that the Liquidator made substantial efforts to canvass the market, the transaction was in the best interests of stakeholders, and the process was fair and efficacious.

The court also granted the sealing order, applying the Sherman Estate test, to protect the maximization of recovery in the event the transaction did not close.

The bankrupt brought a motion to compel a lawyer representing certain creditors to answer questions refused during a cross-examination on his affidavit.

The bankrupt alleged that the lawyer and his client obtained confidential information about the bankrupt's assets through unauthorized access to his email.

The lawyer refused to disclose the identity of his client or the client's source, claiming solicitor-client privilege.

The court dismissed the motion, finding that the identity of the client and the communications were presumptively privileged, the privilege had not been waived, and compelling the answers would violate the fairness and proportionality principles, especially given the bankrupt's failure to disclose an exculpatory expert report.

The Monitor in CCAA proceedings moved for an extension of the stay of proceedings, approval of its activities as described in its Fortieth Report, and approval of its fees and disbursements.

The motion was unopposed.

The court found that the applicants had acted in good faith and with due diligence, and that the extension was reasonable.

The court also approved the Monitor's activities and found the fees and disbursements to be reasonable.

The motion was granted.

The Monitor sought an order authorizing distributions from the sale of Geothermal Assets.

KTNI disputed the Monitor's recommended disallowance of its claim to a portion of the proceeds based on a transfer provision in the Berm Lease.

The court found that the plain language of the lease reserved the transfer value to KTNI and that the provision was not invalidated by the pari passu or anti-deprivation rules.

The Monitor was directed to distribute $2,049,000 to KTNI, but no funds were to be distributed to Doreen Saskin until her claim in the bankruptcy of KTNI's parent company was accepted.

Following a decision permanently staying the plaintiffs' second action for abuse of process, the successful defendants sought costs on a substantial indemnity basis.

The court rejected the request for substantial indemnity, finding that the defendants' Rule 49 offer was not beaten and the plaintiffs' fraud claim was never adjudicated.

The court awarded costs on a partial indemnity basis, reducing the requested amounts by 25% to account for issues that were deferred to a potential future motion.

Costs were fixed at $34,608 for the main group of defendants and $13,722 for Dr. Kajdehi.

The plaintiff commenced a wrongful dismissal action in 2015 against his former employer, which was stayed when the employer declared bankruptcy.

In 2019, the plaintiff commenced a second action against the bankrupt employer and several new defendants, alleging oppression, common employer, and improper transfer of assets.

The newly added defendants moved to strike or stay the second action.

The court permanently stayed the second action as an abuse of process, finding that it improperly circumvented the comprehensive regime of the Bankruptcy and Insolvency Act for challenging asset transfers, as well as the Rules of Civil Procedure regarding the addition of parties to an existing action.

The court-appointed Receiver brought a motion for directions regarding an offer to purchase a large Muskoka property en bloc.

The original buy-out order directed the Receiver to sever the property to allow departing members of the corporation to be paid their share while remaining members kept a retained parcel.

After four years of delays and significant expenses, the severance process was incomplete.

The court found it had jurisdiction to vary the original order due to materially changed circumstances.

The court directed the Receiver to halt the severance process and accept the en bloc purchase agreement, which had the support of the vast majority of stakeholders and represented fair market value.

The moving parties (debtors) sought leave to appeal under s. 193(e) of the Bankruptcy and Insolvency Act from an order approving a court-appointed receiver's proposed sale process and list prices for five commercial properties.

The debtors argued the motion judge failed to apply the correct legal test (the Soundair test) and was unduly deferential to the receiver's business judgment.

The Court of Appeal dismissed the motion for leave, finding that the motion judge had implicitly applied the Soundair test, the proposed appeal lacked prima facie merit, did not raise an issue of general importance, and would unduly hinder the progress of the receivership proceedings.

The court heard competing applications regarding the insolvent Urbancorp Management Inc. (UMI).

The Monitor sought a Bankruptcy Order, while a secured creditor sought the appointment of a receiver.

The court granted the Bankruptcy Order, appointing the Monitor as trustee, finding that the bankruptcy administration would provide a codified route to assess the secured creditor's non-arm's length claim.

The receivership application was stayed pending the trustee's review of the secured claim.

In the context of CCAA proceedings for the Urbancorp entities, the Monitor brought a motion for an order approving and directing distributions from the sale of geothermal assets.

The court approved two unopposed distributions recommended by the Monitor in its Forty-Fifth Report, specifically regarding VII - Curve and UNKI.

The balance of the requested relief was adjourned to a date to be set.

In a CCAA proceeding involving a condominium project, the debtor sought to disclaim pre-sale agreements with unit purchasers.

The purchasers brought a motion for the production of an unredacted appraisal report referenced in the debtor's affidavit.

The court held that while the mandatory production requirement under Rule 30.04(2) is subject to discretion in CCAA proceedings, fairness and transparency required production of the unredacted report to the purchasers, subject to a non-disclosure agreement.

Cross-motions by a contingent creditor and real estate brokers for production of the reports were dismissed due to their lesser need and potential conflicts of interest.

In a CCAA proceeding, the Functionary and Terra Firma brought a motion to late file a claim and to approve a settlement agreement between them regarding the distribution of the debtor's funds.

The court allowed the late filing of the claim but ruled the Functionary's unsworn report inadmissible.

The court dismissed the motion to approve the settlement, finding that a settlement of claims against the debtor requires the consent of the debtor or the Monitor, neither of which had agreed to the settlement.

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.