Laura Audrey Culleton

The court considered whether to dismiss a bankruptcy application brought by Bioventus, LLC against Trindent Consulting Management International Inc. under section 43(7) of the Bankruptcy and Insolvency Act, in light of Trindent’s prior U.S. Chapter 7 bankruptcy.

The court found that Canadian law allows for concurrent insolvency proceedings and that the statutory remedies under the BIA are not property of the debtor’s estate.

The motion to dismiss was denied, and the bankruptcy application may proceed.

Gray Jay Estates Inc. sought a court order to vary the “Payment Amount” under an assignment of indebtedness and security agreement, which would have increased the amount payable by NE SPC II LP (Blacksail) by approximately $1 million.

The dispute centered on whether cash on hand should have been used to repay a DIP facility before closing, and whether a term should be implied into the agreement to require such repayment.

The court found no basis to imply such a term, holding that the contract’s language was clear and that the parties had not agreed to the adjustment sought.

The motion was dismissed, and costs were awarded to Blacksail.

The appellant investors, who participated in a Ponzi scheme operated by a one-person corporation, sought to have the trustee in bankruptcy's unjust enrichment claims statute-barred under Ontario's Limitations Act, 2002 by attributing the directing mind's knowledge of illegal interest and commission payments to the corporation.

The majority held that the corporate attribution doctrine applies to one-person corporations on the same purposive, contextual, and pragmatic basis as to other corporations, and that courts retain discretion to decline attribution when it would undermine the purposes of the laws engaged — here, the limitations and bankruptcy regimes.

In concurrence, a separate judge held that resort to the common law corporate attribution doctrine was unnecessary because the codified agency rules in s. 12 of the Limitations Act, 2002 provided a complete answer, and that the claims were not discoverable until the trustee was authorized by the court to bring them.

All judges agreed that the investors were disentitled from equitable set-off for lack of clean hands, that the referral agreements were illegal contracts at common law, and that one appellant was not dealing at arm's length with the corporation.

This endorsement addresses motions related to a proposed recapitalization transaction of Xplore Inc. and 16029167 Canada Inc. via a plan of arrangement under the Canada Business Corporations Act (CBCA).

The applicants sought an Interim Order to facilitate a vote on the arrangement, while certain satellite providers (unsecured creditors) brought 'comeback motions' objecting to the preliminary interim order's stay of remedies and the proposed treatment of their contracts, including non-payment of full contractual rates and the use of a reverse vesting order.

The court granted the Interim Order, finding that the applicants met the statutory requirements and acted in good faith, and that the fairness of the arrangement, including the novel reverse vesting order, warranted a full fairness hearing.

The court upheld the stay, finding the non-disclosure by applicants not material and that the court has broad discretion to impose terms on critical suppliers, drawing analogies to CCAA provisions.

The satellite providers' requests for full contractual payments and security were denied, and their motion to lift the stay for a bankruptcy application was adjourned.

The appellant, 2557904 Ontario Inc. (the stalking horse bidder), appealed a motion judge's order that dismissed the receiver's motion for an approval and vesting order (AVO) and instead approved the debtor's (1000093910 Ontario Inc.) motion to redeem a first mortgage.

The Court of Appeal found the motion judge erred by not ensuring 255 received compensation for costs thrown away and by granting provisional enforcement of the order after an appeal notice was filed.

The appeal was allowed in part, varying the order to require the debtor to pay $300,000 in compensation to 255 and setting aside the provisional execution.

The court also ordered that if the refinancing transaction does not close, the AVO for 255 will be granted.

The Court of Appeal heard motions in an appeal concerning the receivership of a debtor's property.

The appellant, a successful bidder, appealed two lower court orders that terminated its Stalking Horse Agreement and approved the debtor's refinancing transaction.

The motion judge referred several issues to a panel, including the appellant's standing and right to appeal, and whether the lower court erred in terminating the agreement and granting provisional enforcement.

The Court of Appeal continued the stay of provisional execution of the lower court orders, emphasizing the importance of maintaining the integrity of court-approved sale processes, especially given the absence of reasons from the motion judge for his initial decision.

The plaintiffs, first-position mortgagees, moved for the appointment of a receiver over a property where the debtors had abandoned a gas station and convenience store business.

The loan had matured, and the property was found abandoned with inventory stripped.

While some subsequent mortgagees opposed, arguing for a direct sale or limited investigative receivership to minimize costs, the court found it just and convenient to appoint a receiver.

The court emphasized the contractual right to appoint a receiver, the abandonment of the property, and the need to preserve assets and explore a going concern sale.

The motion was granted, and Rosen Goldberg Inc. was appointed as receiver with full powers.

The Court of Appeal heard motions to quash an appeal from a trial judge's order approving a sale process for a family business.

The court found the approval order to be interlocutory, serving as a mechanism to implement remedies from the trial judgment, and thus not determining substantive issues.

The correct appeal route for such an order is to the Divisional Court with leave.

Consequently, the motions to quash the appeal were allowed, and the appellants were granted an extension to seek leave to appeal to the Divisional Court.

The plaintiffs sought the appointment of a receiver over the DMCC Group of companies to oversee the winding-up and termination of a Trust and the distribution of its assets.

The motion was brought after the Trust Administrator issued a wind-up notice.

The court applied the "just and convenient" test under s. 101 of the Courts of Justice Act, finding that the individual defendants' conflicts of interest and lack of meaningful progress in the wind-up process warranted an independent receiver.

The receivership was granted but limited to specific key entities (the Administrator, General Partner, and DMCC Americas (Canada)), with the possibility of expansion.

The court declined to appoint a receiver under the oppression remedy at this stage.