Maria A. Konyukhova

A case conference was held in a CCAA proceeding, requested by the Purchaser of the Applicants' business, to seek directions on the interpretation of a vesting order concerning a pre-filing personal injury claim.

The parties agreed that any necessary motion for interpretation should be heard by the supervising CCAA court.

They also cooperatively discussed limiting recoveries in the personal injury actions to available general liability insurance proceeds and lifting the stay for that limited purpose, working towards a consent order.

The Applicants, a group of affiliated cannabis companies, sought and were granted an initial order under the Companies’ Creditors Arrangement Act (CCAA) due to insolvency and an urgent liquidity crisis.

The court declared them eligible for CCAA protection, appointed FTI Consulting Canada Inc. as Monitor, approved a debtor-in-possession (DIP) credit facility of up to $2.4 million for initial working capital, granted a 10-day stay of proceedings, extended the stay to non-applicant affiliated entities and their directors/officers, approved administration and directors' charges, and provided relief from certain securities reporting obligations.

The court found Ontario to be the chief place of business, establishing jurisdiction.

The applicant, acting as Foreign Representative for the Chapter 11 Debtors, brought an unopposed motion under the CCAA to recognize several orders of the U.S. Bankruptcy Court, including the Confirmation Order approving the Chapter 11 Plan.

The court found that the Plan was overwhelmingly supported by creditors, treated Canadian and U.S. stakeholders equitably, and was in the best interests of the debtors.

The court granted the recognition orders, approved the corporate steps necessary to implement the Plan, and authorized a mechanism to terminate the CCAA proceedings.

The applicants, acting as Foreign Representative, sought a recognition order from the Ontario Superior Court of Justice for various orders issued by the United States Bankruptcy Court for the Southern District of Texas under the Companies’ Creditors Arrangement Act (CCAA).

The requested relief included approval of a sale of substantially all Chapter 11 Debtors’ assets, vesting orders for Canadian assets, and recognition of claims, assumption/rejection procedures, and key employee incentive plan orders.

The motion was unopposed and supported by the Information Officer.

The court found the transactions beneficial to stakeholders, the sale process fair and reasonable, and the U.S. orders consistent with CCAA principles, granting the requested recognition and approvals.

The Applicants in a CCAA proceeding moved for approval of a subscription agreement and a reverse vesting transaction, along with a back-up agreement, releases, a claims process, a stay extension, and a sealing order.

The court found the reverse vesting structure necessary to preserve the value of the business as a going concern, particularly to maintain highly regulated cannabis licences and permits.

The transaction would satisfy all secured liabilities and leave a surplus for unsecured creditors.

The court approved the requested relief, noting it was unopposed and supported by the Monitor.

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.

The plaintiffs brought a motion for leave to appeal the order of Morgan J. dated February 24, 2023.

The Divisional Court dismissed the motion and ordered the plaintiffs to pay costs of $10,000 all-inclusive to the responding defendants.

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.

In the context of Laurentian University's CCAA proceedings, Thorneloe University appealed a Claims Officer's decision valuing its loss of commercial value claim at zero following the disclaimer of their Federation Agreement.

Thorneloe argued the Claims Officer erred by applying a lost profits approach rather than a loss of business value approach, relying on an expert report valuing the enterprise at $9.8 million.

The Superior Court dismissed the appeal, finding no palpable and overriding error in the Claims Officer's factual determination that Thorneloe was an unprofitable entity and his subsequent rejection of the expert's revenue multiplier methodology.

The court affirmed that expectation damages (lost profits) is the customary remedy for breach of contract, and a non-breaching party is not entitled to be put in a better position than if the contract had been performed.

The Court-appointed Monitor in the CCAA proceedings of Laurentian University brought an unopposed motion for approval of its reports, activities, and professional fees.

The Court applied the factors from Confectionately Yours and found the requested fees for the Monitor, EY FAAS, and the Monitor's counsel to be fair and reasonable, given the novel and complex nature of the proceedings.

The Court approved the fees, disbursements, and the Monitor's reports.

In the context of Laurentian University's CCAA proceedings, the moving party brought a motion seeking an order to direct the Monitor to engage in mediation regarding its appeal of a Claims Officer's decision.

The Claims Officer had upheld the Monitor's disallowance of the moving party's $9.8 million claim for loss of commercial value.

The court dismissed the motion, finding that the existing claims process provided an adequate mechanism for resolving the dispute through the pending appeal.

The court also noted that the request for mediation was made too late, as it was brought only after the Claims Officer had already determined the matter on its merits.

The plaintiffs brought a bankruptcy application against the defendant for an alleged indebtedness of approximately US$32.4 million for unpaid wholesale apparel.

The defendant moved to stay or dismiss the application, arguing there was a bona fide dispute over the debt due to the plaintiffs' alleged breaches of a Master Sourcing Agreement, which contained an exclusive forum clause designating New York courts.

The court found a bona fide dispute existed and that it lacked jurisdiction to resolve the contractual claims due to the forum selection clause.

The bankruptcy application was stayed on terms, including a requirement for the defendant to pay funds into court, pending the resolution of the New York proceeding.

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, part of the Lydian Group which owns a development-stage gold mine in Armenia, sought an order sanctioning their Plan of Arrangement under the CCAA.

The Plan, supported by the Monitor and the requisite majority of secured creditors, provides for the privatization of the Lydian Group and the release of existing indebtedness to Senior Lenders.

The court found the Plan to be fair and reasonable, noting that while equity claimants would receive no compensation, this reflected the economic reality of the insolvency.

The court also approved third-party releases, an increase to the DIP charge, an extension of the stay period, a sealing order for commercially sensitive information, and the Monitor's activities and fees.

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.