Aiden Charles Rebel Nelms

This endorsement grants, with one exception, the relief sought by the Receiver in the receivership of Antibe Therapeutics Inc., including approval of a sale transaction with Taro Pharmaceuticals Inc. via a reverse vesting order.

The court finds the transaction and process fair, maximizes value for stakeholders, and preserves key tax and intellectual property attributes.

The only relief not granted is the proposed interim distribution to unsecured creditors, as the court is not satisfied that sufficient information exists regarding unresolved claims and holdbacks.

The court provides guidance for a future motion once these issues are resolved.

The court determined the priority dispute between KingSett Mortgage Corporation's 2022 mortgage and various construction liens against the Debtors' property, which was in receivership.

The Receiver brought the motion to clarify "Priority Payables" under a court-approved sale agreement.

The court found that the 2022 KingSett Mortgage had priority over the construction liens, except to the extent of any deficiency in the statutory holdbacks, applying sections 78(2) and 78(6) of the Construction Act.

The court rejected the lien claimants' arguments that the mortgage did not qualify for priority under these sections and that the Receiver acted inappropriately.

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.

1000093910 Ontario Inc., a company in receivership, appealed the motion judge’s decision to decline hearing its cross-motion and to grant the receiver’s proposal for a public auction of its primary asset.

The cross-motion sought to vary the receivership order and enforce an earlier agreement of purchase and sale (APS).

The Court of Appeal dismissed the appeal, finding that the motion judge's discretionary decision not to hear the cross-motion was not erroneous, given the appellant's late service of materials and the low chance of success for the earlier APS.

The court also found no error in principle in the motion judge's approval of the receiver's proposed sales process, which included a "stalking horse" agreement, as it was fair, transparent, and aimed at optimizing the asset's price.

The Applicants, Fresh City Farms Inc. and Mama Earth Organics Inc., sought approval for a reverse vesting order related to a share subscription agreement with their DIP Lender, who was also the proposed purchaser.

This transaction aimed to preserve the business as a going concern, including non-transferable assets like tax losses and licenses, after an unsuccessful Sale and Investor Solicitation Process (SISP).

The motion also sought third-party releases, an extension of the stay period, approval of the Monitor's reports and fees, and an order compelling Stripe Payments Canada, Ltd. to remit withheld funds.

The court granted all requested relief, finding the transaction fair and reasonable, the reverse vesting structure appropriate given the circumstances (highly regulated environment, non-transferable assets), and the releases justified.

The court also found Stripe's withholding of funds to be in breach of the initial order and critical to the applicants' cash flow, ordering their remittance.

The applicant, KingSett Mortgage Corp., sought the appointment of KSV Restructuring as receiver over the property of the debtors, Mapleview Developments Ltd., Pace Mapleview Ltd., and 2552741 Ontario Inc., due to default on significant loan facilities.

The application also requested super priority charges for the receiver and a borrowing charge.

The debtors did not appear, but their principals/guarantors and other creditors/lienholders were represented and did not oppose the relief.

The court applied the "just or convenient" test under the Bankruptcy and Insolvency Act and the Courts of Justice Act, finding that the contractual right to appointment and the circumstances of the default made the receivership appropriate.

The application was granted, and the proposed order, consistent with the Commercial List Model Order, was approved.

This motion before the Court of Appeal for Ontario concerned whether an order made in a receivership proceeding, which approved bidding procedures and a stalking horse agreement for the sale of a property, and the motion judge's refusal to hear a cross-motion to approve an earlier agreement of purchase and sale, constituted an appealable order as of right under s. 193(c) of the Bankruptcy and Insolvency Act (BIA) or required leave under s. 193(e).

The Court applied the "operative effect" test, finding that the refusal to hear the cross-motion, despite being procedural, effectively jeopardized the property's value by depriving the Debtor of the ability to enforce a higher-value original agreement, thereby triggering the automatic right of appeal.

The motion for leave was dismissed as unnecessary, and the appeal was expedited.