K. Peters

In the context of CCAA proceedings for U.S. Steel Canada Inc. (USSC), the applicant sought approval for Transition Arrangements with its parent company, a Business Preservation Plan involving significant cash conservation measures (including suspension of pension, OPEB, and municipal tax payments), and Amended DIP Financing.

The court approved the motions, finding that the Transition Arrangements were fair and reasonable, and that the Business Preservation Plan and DIP financing were necessary to allow USSC to continue operations and pursue a restructuring solution, despite objections from the union and municipalities regarding the suspension of benefits and taxes.

In ongoing restructuring proceedings under the Companies’ Creditors Arrangement Act, the debtor company sought court approval of a coke conversion agreement with its parent corporation.

The motion was brought on an urgent basis due to operational deadlines relating to coal shipments and winter shipping constraints on the Great Lakes.

The monitor supported the agreement and reported that it would be cash‑flow positive, would recall employees from temporary layoff, and would not interfere with the ongoing sales and restructuring process.

The court held that it had jurisdiction under s. 11 of the CCAA and found the agreement appropriate in the circumstances.

A sealing order was also granted to protect confidential commercial information contained in an unredacted version of the agreement.

The estate of a former CEO brought an oppression action under s. 248 of the Ontario Business Corporations Act seeking recovery of a $750,000 loan advanced to finance a corporate break fee.

The loan was structured through a related entity and contained provisions stating that proceeds from certain Irish transactions could be used, at the lender’s discretion, to repay the loan.

After the corporation received nearly $1 million from three of the four transactions, the directors and CFO used the funds for payroll, operating expenses, tax arrears, and to repay their own loans rather than repaying the lender.

The court held the lender had a reasonable expectation that proceeds from the Irish deals would be applied to the loan principal.

While some expenditures were made in good faith to keep the company operating, the repayment of insiders and a later lender constituted conduct that unfairly disregarded the lender’s interests.

Personal monetary orders were made against certain directors and the CFO.

The applicants, Timminco Limited and Bécancour Silicon Inc., sought orders in their CCAA proceedings to suspend special payments to their pension plans, grant super priority to Administration and D&O Charges over provincial pension deemed trusts, approve Key Employee Retention Plans (KERPs), and seal the KERP details.

The unions opposed the super priority and suspension of pension payments, arguing it violated provincial pension legislation and fiduciary duties.

The court granted the motion, applying the doctrine of paramountcy to find that enforcing the provincial pension obligations would force the companies into bankruptcy and frustrate the CCAA restructuring.

The court also approved the KERPs and sealed the confidential supplement.