Larry Ellis

This case involves a Companies' Creditors Arrangement Act (CCAA) proceeding where the Applicants sought approval of a Sales and Investment Solicitation Process (SISP) including a stalking horse bid.

Green Acre Capital LP, a minority shareholder and creditor, opposed the SISP and brought a cross-motion to replace the previously approved Debtor-in-Possession (DIP) financing facility with an alternative one.

The court approved the SISP, finding it broad enough to explore various restructuring options beyond just a sale, and dismissed Green Acre's cross-motion, emphasizing the need to minimize instability by not replacing a recently approved DIP facility for minor financial benefits.

The Applicants in a CCAA proceeding moved for a reverse vesting order to approve a transaction with a purchaser related to a secured creditor, Marzilli.

The transaction would vest out the first-ranking security interest of another creditor, 212, and transfer its debt to a residual entity with no assets. 212 opposed the motion, arguing its debt assumption was part of the stalking horse bid that set the floor for the sales process.

The court applied the Third Eye and Harte Gold factors, finding that 212 had not consented to the vesting out of its interest and that the equities favoured 212.

The court dismissed the motion for the reverse vesting order, concluding it was not equitable to extinguish 212's first-ranking security interest under the circumstances.

Hazleton Development Corporation, an insolvent company constructing a condominium complex, applied for an initial order under the Companies’ Creditors Arrangement Act (CCAA).

The application sought a stay of proceedings, approval of Grant Thornton Limited as Monitor, permission for pre-filing payments to critical trades, approval of a Debtor-in-Possession (DIP) financing facility, an administration charge, and a directors’ charge.

The court granted the initial order, finding the company met the CCAA's statutory requirements, the stay was appropriate for a 10-day period, the Monitor was qualified, pre-filing payments were beneficial to stakeholders, the DIP facility was essential and reasonably necessary, and both the administration and directors’ charges were warranted.

The order was granted without prejudice to the secured creditors' rights for a subsequent hearing.

The Kraus group of companies, a vertically integrated carpet manufacturer and flooring distributor, applied for an initial order under the Companies’ Creditors Arrangement Act (CCAA) due to significant financial difficulties and insolvency.

The application sought a stay of proceedings, appointment of Deloitte Restructuring Inc. as Monitor, and the granting of an Administration Charge and a Directors’ Charge.

The court granted the initial order, finding that the applicants met the CCAA threshold, a stay was appropriate for the business and its directors/officers, the proposed Monitor was qualified, and both the Administration Charge and Directors’ Charge were justified to secure essential services and ensure continued director involvement.

A sealing order for sensitive commercial information was also granted.

A bankruptcy trustee brought a motion to set aside the bankrupt’s automatic discharge after failing, through inadvertence, to send the statutory notices of impending discharge to creditors.

The court considered whether it had jurisdiction under the Bankruptcy and Insolvency Act to invalidate an automatic discharge arising from such procedural irregularity.

Applying prior authorities and the principles under s. 187(9) of the Act, the court held that the failure to provide notice constituted an irregularity in a bankruptcy proceeding causing potential injustice to creditors who were deprived of the opportunity to oppose the discharge.

Evidence indicated unresolved issues concerning the bankrupt’s disclosure obligations and potential surplus income, suggesting that a discharge hearing could lead to a materially different result.

The court therefore set aside the automatic discharge and directed the trustee to issue proper notices to creditors.

The court heard two motions in a receivership proceeding.

The Receiver moved for its discharge and release from liability, having completed its mandate to close a sale transaction.

A creditor brought a motion to compel the Receiver to answer 114 questions, unseal confidential appendices, and pay out funds held in trust for its s. 81.1 claim.

The court dismissed the creditor's requests for answers and payment, finding the questions to be an unreasonable fishing expedition and the payment premature as the claim was not yet determined.

The request to unseal documents was adjourned to allow the affected party to respond.

The court granted the Receiver's discharge, finding no evidence of improper conduct.

The appellants, holders of Convertible Notes of Stelco, appealed an order establishing an expedited claims process to determine inter-creditor subordination claims in a CCAA restructuring.

The appellants argued they were entitled to a full civil trial process.

The Court of Appeal dismissed the appeal, finding that the CCAA plan explicitly contemplated a timely process to determine entitlements to the turnover proceeds, and the supervising judge's discretionary scheduling order was entitled to deference.