Kevin Zych

The applicants, Xplore Inc. and a wholly-owned subsidiary, sought a final order approving a plan of arrangement under the Canada Business Corporations Act (CBCA).

The arrangement aimed to implement a comprehensive recapitalization transaction to significantly deleverage the company's secured debt and secure new financing.

A key component of the plan was a reverse vesting order (RVO) to separate uneconomic satellite business obligations from the ongoing operations.

The court found that the arrangement met all statutory requirements, was proposed in good faith, and was fair and reasonable to all stakeholders, including the initially opposing satellite providers who reached a commercial resolution.

The court also confirmed its jurisdiction under s. 192(4) of the CBCA to grant an RVO and approved the inclusion of third-party releases.

The applicants, Xplore Inc. and 16029167 Canada Inc., sought a preliminary interim order under s. 192(4) of the CBCA to facilitate a comprehensive recapitalization transaction.

The applicants requested a stay of proceedings to prevent unsecured creditors, particularly satellite providers, from taking unilateral actions that could disrupt services to rural customers while definitive agreements were finalized.

The court granted the preliminary interim order, finding that the proposed transaction constituted an arrangement, the solvency requirement was met, and the stay was necessary to provide stability during negotiations.

In the receivership of the Bridging Funds, the Receiver brought a motion to determine whether unitholders with Potential Statutory Rescission Claims (based on misrepresentations in offering memoranda) or Potential Redemption Claims (based on unfulfilled redemption requests) were entitled to priority over General Unitholder Claims.

The court held that Potential Redemption Claims were not entitled to priority because the redemption requests had not been completed prior to the receivership.

However, the court held that Potential Statutory Rescission Claims were entitled to priority, finding that the statutory right of rescission under s. 130.1(1) of the Securities Act creates a de facto priority and justifies the imposition of a constructive trust over the invested funds.

The applicants, Canadian affiliates of Bumble Bee Foods, sought an amended and restated initial order under the CCAA to stabilize their business and facilitate a coordinated restructuring and asset sale alongside US Chapter 11 proceedings.

The court considered the recent amendments to the CCAA, specifically s. 11.001, and found that the requested relief—including an extension of the stay of proceedings, DIP financing, payment of pre-filing obligations, a Key Employee Retention Plan (KEIP), and various court-ordered charges—was reasonably necessary for the continued operation of the business in the ordinary course.

The court granted the amended and restated initial order.

The applicants brought an ex parte motion for a preliminary interim order under section 192(4) of the Canada Business Corporations Act to facilitate a recapitalization transaction.

The proposed arrangement aimed to reduce the company's debt obligations by more than $2 billion.

The court found that the statutory requirements were met, the arrangement was put forward in good faith, and it was impracticable to effect the fundamental change under any other provision.

The court granted the preliminary interim order, including a broad stay of proceedings, to allow the company to advance the recapitalization transaction.

In CCAA proceedings arising from the liquidation of a multinational telecommunications company, bondholders claimed entitlement to post‑filing interest exceeding US$1.6 billion in addition to principal and pre‑filing interest of approximately US$4.092 billion.

The court considered whether the common law "interest stops rule" applies in CCAA proceedings, particularly in a liquidating CCAA context.

Applying insolvency principles of pari passu distribution and relying on Supreme Court guidance emphasizing the integrated nature of the CCAA and BIA regimes, the court held that post‑filing interest does not accrue against the insolvent estate.

The court rejected arguments that contractual entitlement to interest survives the filing or that distributions require a negotiated plan recognizing such interest.

Accordingly, crossover bondholders were limited to principal and pre‑petition interest claims.

In long‑running insolvency proceedings under the Companies' Creditors Arrangement Act, the court was asked to determine whether unsecured bondholders were entitled to claim post‑filing interest on crossover bonds after the debtor companies entered CCAA protection.

The court considered the common law “interest stops” rule, the pari passu principle governing distribution to unsecured creditors, and the relationship between the CCAA and the Bankruptcy and Insolvency Act.

The court held that the interest stops rule applies in CCAA proceedings and prevents unsecured creditors from claiming post‑filing interest absent a negotiated plan providing for such payments.

Allowing interest to accrue for some creditors during the stay period would undermine the status quo and distort equality among creditors.

The court further held it had jurisdiction to determine the issue even without a proposed plan of arrangement.

The applicant, Sino-Forest Corporation, sought an order sanctioning a plan of compromise and reorganization under the CCAA.

The plan was supported by the vast majority of creditors, including noteholders, auditors, and underwriters, but opposed by certain funds.

The court found that the statutory requirements were met, the creditors were properly classified, and the plan, including its third-party releases, was fair and reasonable.

The motion was granted and the plan was sanctioned.