Kristina Andrea Desimini

The debtor company in CCAA proceedings brought a motion seeking a declaration that two Occupational Health and Safety Act prosecutions commenced by the provincial labour ministry were stayed by the CCAA initial order, or alternatively that the proceedings should be stayed under s. 11.1(4) of the Companies’ Creditors Arrangement Act.

The debtor argued that any conviction would result only in monetary fines, rendering the ministry a creditor whose claim should be addressed within the insolvency process.

The court held that regulatory prosecutions are not equivalent to creditor enforcement where no monetary obligation has yet crystallized and the regulator is acting in a prosecutorial capacity.

Applying the Supreme Court’s test for regulatory claims under insolvency legislation, the court concluded that the ministry was not acting as a creditor and that the proceedings remained regulatory in nature.

The motion to declare the prosecutions stayed was therefore dismissed.

In CCAA proceedings, the applicant sought approval of a sale transaction involving substantially all of its pulp mill assets pursuant to s. 36 of the Companies’ Creditors Arrangement Act.

Certain creditors opposed the transaction and urged the court to consider a late competing offer that proposed a higher purchase price.

The court held that the sales process had been extensively marketed internationally, complied with the court‑approved process, and was conducted with the oversight of the monitor and consultation with key stakeholders including the Province.

Applying the Soundair principles and s. 36(3) of the CCAA, the court found that the monitor had acted prudently, the process maintained integrity and fairness, and the later competing offer did not demonstrate that the accepted transaction was improvident.

The court approved the transaction and granted the requested vesting order.