On an application for an initial order under the Companies’ Creditors Arrangement Act, the court considered whether an insolvent group of residential development companies should obtain CCAA protection, including a stay, monitor appointment, DIP financing, and priority charges.
A secured creditor opposed inclusion of one raw-land project and sought instead to realize through a receiver.
The court held that, on the specific facts, the prejudice to that secured creditor was not materially greater in a CCAA claims process than in a receivership, particularly given the undertaking to pay out the first mortgage in the amount ultimately determined by the court.
The initial order was granted, including the stay, monitor appointment, DIP facility, and administrative and directors’ charges.