Kyla E.M. Mahar

The applicants sought approval of a sale of substantially all of their assets to a newly incorporated entity owned by their first lien lenders pursuant to a credit bid, effectively wiping out the second lien lenders.

RBC, a first and second lien lender, opposed certain ancillary relief.

The court approved the sale transaction, finding the pre-filing sales process reasonable under the Soundair principles and s. 36(3) of the CCAA.

However, the court declined to grant a broad third-party release by the first lien lenders, refused to bind RBC to a shareholders' agreement, and dismissed RBC's motions for pre-filing interest, fees, and a share of a consent fee.

In CCAA proceedings involving an educational publisher, the secured lender sought full indemnity costs following a successful motion resulting in the replacement of the monitor and related relief.

The court considered a contractual costs provision in the second lien credit agreement permitting recovery of enforcement costs, subject to the court’s supervisory discretion to ensure fairness and reasonableness.

The court confirmed that contractual provisions for full indemnity costs are generally enforceable where reasonable and declined to defer determination of costs.

Canadian counsel fees were found fair and reasonable, while the claim for U.S. counsel fees was reduced due to insufficient justification.

Costs of $194,091.59 were ordered payable to the secured lender.

The plaintiffs, former employees of the defendant, sought a determination of their entitlement to monies under a carried interest plan related to a private equity fund.

They argued that their entitlements should be calculated based on their points at the time of each distribution and that the award of additional points after their departure was unduly dilutive and contravened the plan.

The court found that the plan's terms, including subsequent letters agreed to by the plaintiffs, contemplated calculating entitlements based on total points at the end of the plan.

The court also held that the defendant had broad discretion to award points and did not contravene the plan by awarding points after the plaintiffs' departure to reward other participants for their contributions.

Minatura brought a motion to remove Aburi Goldfields Ghana Ltd. from the CCAA proceedings of the applicants, arguing lack of disclosure, that Aburi was not a debtor, and that the dispute over control of Aburi should be litigated in Ghana.

The court dismissed the motion, finding that Aburi was a debtor, that there was no material non-disclosure, and that staying the CCAA proceedings would likely cause the restructuring to fail.

Applying the Van Breda framework and giving weight to a forum selection clause in the parties' shareholders' agreement, the court held that Ontario had jurisdiction and that Minatura failed to establish that Ghana was a more appropriate forum.