Maria A. Konyukhova

The Applicant, Instant Brands Inc., as Foreign Representative of the Chapter 11 Debtors, sought recognition of several US Chapter 11 orders, including the Supplemental Interim DIP Order, Final DIP Order, Final Cash Management Order, and Bidding Procedures Order.

The relief was unopposed and supported by the Information Officer.

The court granted the recognition orders, finding them necessary and appropriate to fund operations, maintain an integrated cash management system, and facilitate a competitive sale process, thereby furthering comity and ensuring fair treatment of stakeholders in the cross-border insolvency proceedings.

The applicant, Instant Brands Inc., acting as foreign representative for itself and 14 other Chapter 11 debtors, sought recognition of US insolvency proceedings under the Companies’ Creditors Arrangement Act (CCAA).

The Ontario Superior Court granted the application, declaring the US proceedings as foreign main proceedings, recognizing Instant Brands Inc. as the foreign representative, imposing a stay of proceedings against the debtors, appointing Ernst & Young Inc. as Information Officer, and approving an Administration Charge and a Directors & Officers’ Charge.

The relief sought was unopposed.

This endorsement concerns the costs of an injunction motion where the plaintiffs' request to prohibit the defendant Dongab Co. Inc. from exercising its power of sale on two mortgages was denied.

Dongab and Network Sewer and Watermain Ltd., the successful defendants, sought costs on a full indemnity basis, or alternatively substantial or partial indemnity.

Despite mortgage documentation calling for full indemnity, the court exercised its discretion under section 131 of the Courts of Justice Act to award costs on a partial indemnity scale, finding the requested amounts extraordinarily high and exceeding the plaintiffs' reasonable expectations.

The plaintiffs were ordered to pay $163,000.00 in all-inclusive costs.

The Plaintiffs sought an interlocutory injunction to prevent the Defendant Dongab Co. Inc. from exercising its power of sale on two mortgages secured on the Plaintiffs' property.

The Plaintiffs argued that preconditions to repayment were not met and that the Notice of Sale had deficiencies, including improper service and incorrect interest calculation.

The court found no serious issue to be tried regarding the mortgages being due and payable, the amounts owing, or the validity of the Notice of Sale.

The court determined that the Plaintiffs' arguments were tactical attempts to delay payment.

The motion for injunctive relief was dismissed.

This motion concerned the winding-up of Maple Bank GmbH.

The Liquidator sought approval for a Fourth Interim Distribution, a reduction in the reserve held, and approval of the Fourteenth Report of the Liquidator and its activities.

Additionally, the Liquidator sought approval for a Data Custodian Order.

There was no opposition to the requested relief, with Canada Revenue Agency's pending claim being addressed by a maintained reserve.

The court granted the motion, approving the distribution, the reduction in reserve, the Liquidator's report and activities, and the Data Custodian Order.

The Applicants in a CCAA proceeding sought a Meeting Order to accept the filing of a Plan of Compromise or Arrangement, approve creditor classification, authorize a meeting for voting on the Plan, set a sanction hearing date, and seal certain affidavits.

The court granted the motion, finding the Plan had sufficient support to summon a creditors' meeting, the proposed single class of secured creditors had a commonality of interest under CCAA s. 22(2), and the sealing of commercially sensitive information in the affidavits was appropriate.

Crystallex International Corporation brought a motion for a sealing order to keep confidential certain financial information and strategic details contained in the Monitor's 33rd Report, including cash balance, litigation expenses, sanctions impact, and confidential mediation disputes.

The Ad Hoc Committee of senior noteholders and the Trustee opposed the sealing of financial information, arguing for the importance of disclosure in CCAA proceedings.

The court applied the Sierra Club test, which requires demonstrating a real and substantial risk to an important commercial interest, no reasonable alternative to sealing, and the salutary effects outweighing the deleterious effects on the open-court principle.

The court found Crystallex's evidence, consisting of bald and speculative statements, insufficient to meet this high evidentiary burden, and therefore dismissed the motion for a sealing order.

This endorsement addresses a motion by Lydian International Limited and its affiliates to extend a stay period under the Companies’ Creditors Arrangement Act (CCAA).

Following an initial order granting a 10-day stay, the applicants sought an extension.

The court had previously declined to grant the extension at the initial hearing, interpreting CCAA s. 11.001 to limit initial orders to ordinary course relief and maintain the status quo during the initial 10-day period.

The motion for extension was deferred to allow stakeholders to consider their positions.

With no opposition filed and the Monitor's support, the court found that the applicants were acting in good faith and with due diligence, justifying an extension of the stay period to January 23, 2020, to facilitate discussions with lenders and stakeholders regarding financing and sale options for their gold mine project.

Her Majesty the Queen in right of Ontario sought to lift a stay on its $330 billion health care cost recovery action against three tobacco companies (JTI-Macdonald Corp., Imperial Tobacco, Rothmans, Benson & Hedges Inc.) and eleven co-defendants, which was imposed under CCAA proceedings.

Ontario proposed to temporarily stay the effects of any judgment.

The court dismissed the motion, emphasizing the need to preserve the status quo in CCAA proceedings to facilitate a global resolution of significant claims.

Allowing Ontario's action to proceed would alter the level playing field, distract from restructuring efforts, and impose significant costs, prejudicing other stakeholders.

The applicants, Aralez Pharmaceuticals Inc. and Aralez Pharmaceuticals Canada Inc., sought court approval for Key Employee Retention Plans (KERPs) and Key Employee Incentive Plans (KEIPs) within their Companies' Creditors Arrangement Act (CCAA) proceedings.

The court approved both programs, finding that the design process involved significant arm's length oversight, the programs were necessary to retain and incentivize key employees during the restructuring and sales process, and the design was reasonable.

The Official Committee of Unsecured Creditors opposed the KEIP, arguing the bonuses were too high and easily earned, but the court dismissed these objections, emphasizing the circumstances prevailing when the plans were initially offered and the employees' good faith efforts.

Zayo Inc. brought a motion seeking an order for FTI Consulting Canada Inc., as Monitor for the Primus Entities, to pay Zayo $1,228,799.81 from asset sale proceeds.

This amount represented pre-CCAA filing arrears owed to Zayo under contracts assigned to Birch Communications Inc. Zayo argued the consent process for assignment was not transparent or fair, alleging it was misled into consenting without realizing it could have leveraged Section 11.3(4) of the CCAA to demand full payment of arrears.

The court dismissed the motion, finding the consent process fair and transparent, noting Zayo's sophistication and lack of due diligence.

The court also found that granting the order would cause prejudice to secured lenders and Birch, as it would require varying existing orders and disrupt a closed transaction.

Portco sought orders for immediate and future payments under a Cargo Handling Agreement, and a US$5 million charge on Algoma's assets, arguing the payments were required post-filing in a CCAA proceeding.

The CCAA Applicants (Algoma) and DIP lenders opposed, citing the DIP Agreement's budget approval requirement and an arguable right to equitable set-off against a promissory note owed by Portco's parent company (EGFL) to Algoma.

The court found that the DIP Agreement and Initial Order did not mandate payments without DIP lender approval and that an arguable case for equitable set-off existed.

The motion was dismissed as premature, pending determination of the set-off issue and other concerns raised by the Monitor regarding the Portco transaction and recapitalization.