Michael De Lellis

In CCAA proceedings arising from a major construction project, the monitor sought an order authorizing release of a contractor-specific holdback notwithstanding the continued construction of the project and the resulting technical inability to satisfy the timing requirements of the construction lien regime.

The court held that s. 11 of the CCAA gave it jurisdiction to deem compliance with statutory preconditions where doing so usefully furthered the remedial objectives of the restructuring, caused no demonstrated prejudice, and preserved the substantive rights of affected stakeholders.

The court also held that it could protect the monitor and CRO from potential personal liability under specified tax statutes for implementing the court-authorized payment, but revised the proposed wording to grant a narrower and more direct liability shield.

The holdback release order was approved with modifications, including removal of an unnecessary overlapping protection.

Corus Entertainment Inc. and 17311737 Canada Inc. sought and obtained a preliminary interim order in connection with a proposed arrangement under the Canada Business Corporations Act.

The court granted a stay of rights and remedies against the Corus Entities until December 18, 2025, to provide breathing space for the applicants to finalize definitive documentation for a recapitalization transaction.

The transaction is designed to significantly reduce the company's debt and annual cash interest costs while extending maturity dates.

The applicants demonstrated compliance with statutory requirements and good faith in pursuing the arrangement following a formal strategic review.

The stay does not affect obligations to trade creditors, suppliers, customers, or employees.

This decision concerns the transition of the receivership of the "The One" development project at Yonge and Bloor in Toronto to Companies’ Creditors Arrangement Act (CCAA) proceedings.

The court granted a discharge order for the receiver, an initial CCAA order, and approved a transaction with Tridel Builders Inc. for project completion.

The court also denied an adjournment request from a late-appearing stakeholder, approved the appointment of a monitor and chief restructuring officer, and authorized various charges and reliefs to facilitate restructuring and maximize value for stakeholders.

This endorsement concerns a motion by FAAN Mortgage Administrators Inc., as Court-appointed Trustee of Building & Development Mortgages Canada Inc. (BDMC), for approval of its 30th and 31st Reports, its fees and disbursements, a sealing order for certain confidential exhibits, and authorization to distribute the Fortress Holdback and Future Fortress Amounts to investors.

The motion was unopposed.

The court approved the Trustee’s activities and fees, granted the sealing order, and authorized the distribution to investors, finding these steps appropriate and necessary to protect investor interests and confidential information.

The court approved a Settlement and Mutual Release Agreement regarding the administration of syndicated mortgage loans and projects affiliated with Fortress Real Developments Inc. The Trustee, FAAN Mortgage Administrators Inc., sought approval to enter into the agreement, direct payment of the settlement, and authorize distribution to investors.

The court found the settlement appropriate, noting no better alternatives existed and that the agreement provided certainty and at least a nominal recovery for investors after significant delay.

The applicants, Peter and Dorotea Pallotta, sought a declaration under s.178(1)(d) of the Bankruptcy and Insolvency Act (BIA) that the respondent, Licio Edward Cengarle, their former solicitor, was not released from the unpaid balance of a $254,056.89 judgment debt following his bankruptcy discharge.

The debt arose from Cengarle's breach of trust and vicarious liability for his employee's fraudulent mortgage scheme, which involved the misappropriation of the Pallottas' funds from his trust account.

The court found that the debt resulted from misappropriation or defalcation while Cengarle acted in a fiduciary capacity, and the s. 62(2.1) BIA exception for discharge did not apply as the Pallottas did not vote for the proposal.

The court granted the declaration and lifted the statutory stay of proceedings under s. 69.1 of the BIA to allow the Pallottas to enforce their judgment.

The Court-appointed Receiver sought approval for three orders concerning a large condominium project in receivership: a Sale and Investment Solicitation Process (SISP) Approval Order, a Reconfiguration and Letters of Credit (LC) Order, and a Holdback Release Order.

The Reconfiguration and LC Order and Holdback Release Order were unopposed.

The SISP Approval Order was opposed by subordinate lenders (Coco Parties) primarily due to a $1.2 billion minimum bid threshold, which they argued would intentionally cause the SISP to fail.

The court approved all three orders, deferring to the Receiver's business judgment and the Senior Secured Lenders' position, noting the Coco Parties provided no evidence to support their objections and were contractually subordinated.

The applicant, Tacora Resources Inc., sought approval for an Amended and Restated Debtor in Possession (DIP) financing agreement with Cargill and an extension of the CCAA Stay Period.

The Ad Hoc Group of Noteholders (AHG) opposed the Cargill DIP, proposing an alternative and seeking renegotiation of terms, including an exit fee, legal costs, and the "Offtake Condition" related to a pre-existing commercial agreement with Cargill.

The court approved the Cargill DIP and extended the stay, finding the Cargill agreement offered greater short-term stability and liquidity, was recommended by the Monitor, and did not materially prejudice other stakeholders beyond what already existed due to the pre-CCAA Offtake Agreement.

The court held that the DIP approval motion was not the appropriate forum to address the enforceability or commercial reasonableness of the Offtake Agreement itself.

The Receiver sought and obtained two orders: a Construction Continuance Order to approve the engagement of a new construction manager (SKYGRiD) and extend a stay of proceedings, and a Lien Regularization Order to establish a court-supervised process for construction lien claims.

The court found jurisdiction under the Bankruptcy and Insolvency Act and the Courts of Justice Act, concluding that the orders were necessary and appropriate to ensure the ongoing construction of "The One" project and to manage lien claims efficiently without prejudicing claimants' substantive rights.

Objections from the former developer (Mizrahi Parties) regarding their own pending motion for fees were acknowledged but did not prevent the approval of the Receiver's requested orders.

PricewaterhouseCoopers (PwC), as the court-appointed Liquidator for the winding-up of Silicon Valley Bank's Canadian business, brought a motion seeking approval for a Claims Procedure, the appointment of Employee Representative Counsel, and authorization for interim distributions to the United States Federal Deposit Insurance Corporation (FDIC).

The motion was unopposed and supported by the FDIC and proposed Employee Representative Counsel.

The court approved all requested relief, finding the proposed procedures fair, efficient, and appropriate for the Winding-up and Restructuring Act (WURA) proceedings.

The applicants, senior secured lenders, sought the appointment of a receiver over the assets of "The One" mixed-use construction project due to financial and covenant defaults by the borrower.

The project, significantly delayed and over budget, had outstanding debt of approximately $1.235 billion.

The appointment of Alvarez & Marsal Canada Inc. as receiver was unopposed by any key stakeholder.

The court granted the application, appointed the receiver, approved a super-priority receivership funding credit agreement of up to $315 million, and issued a stay of proceedings, finding it just and convenient to stabilize the situation and maximize recovery for all stakeholders.

The Liquidator of Silicon Valley Bank Canada sought court approval of an asset purchase agreement with National Bank of Canada, as well as a sealing order over the unredacted agreement and a confidential comparative analysis.

The court applied the Soundair principles and found that the Liquidator made substantial efforts to canvass the market, the transaction was in the best interests of stakeholders, and the process was fair and efficacious.

The court also granted the sealing order, applying the Sherman Estate test, to protect the maximization of recovery in the event the transaction did not close.

The Attorney General of Canada applied for a winding-up order for the Canadian business of Silicon Valley Bank (SVB) and the appointment of PricewaterhouseCoopers Inc. as liquidator, pursuant to the Bank Act and the Winding-Up and Restructuring Act.

SVB, a U.S. bank with a Canadian branch, became insolvent in the U.S., leading to its assets being transferred to a bridge bank.

The Superintendent of Financial Institutions had taken control of SVB's Canadian assets.

The court found it just and equitable to grant the winding-up order, noting SVB's insolvency and the need to protect Canadian creditors and stakeholders, as the U.S. bridge bank was not authorized to operate in Canada.

The order provides broad powers to the liquidator while ensuring court supervision and protection for stakeholders.

The moving parties, representing U.S. class action claimants, sought leave to appeal a supervising judge's order in a CCAA proceeding.

The supervising judge had dismissed their motion seeking to be treated as unaffected creditors or to have an expedited adjudication of their claims prior to a creditor vote.

The Court of Appeal denied leave, finding that the proposed appeal was not prima facie meritorious and did not raise issues of significance to the insolvency practice.

The Court emphasized the high level of deference owed to a CCAA supervising judge's discretionary decisions balancing stakeholder interests.

In a CCAA proceeding, the court considered supplementary written submissions regarding the appropriateness of differential consideration offered to unsecured creditors in the proposed Plan.

The court accepted the applicants' submission that the fairness of the differential consideration, which involves providing shares to Term Loan Lenders and cash to General Unsecured Creditors, should be determined at the Sanction Hearing rather than at the Meetings Order stage, given the low threshold for a Meetings Order and the presence of conflicting expert reports.

The Applicants sought an Authorization Order and Meetings Order under the CCAA.

The primary issues in dispute concerned the voting rights and classification of Litigation Claimants, which included uncertified U.S. class actions, a certified Ontario class action, and Texas mass tort claims.

The court held that the Litigation Claimants are creditors entitled to vote, but restricted them to one vote per action to prevent them from overriding other stakeholders on numerosity grounds.

The court also ordered summary proceedings to value their claims rather than accepting the Applicants' proposal to value them at $1.

Finally, the court declined to place the Term Loan Lenders in a separate class from other unsecured creditors, finding sufficient commonality of legal interests.

In the context of CCAA proceedings, the applicants brought a motion to approve a Support Agreement, a Backstop Commitment Letter, and a Meetings Order.

The court approved the uncontested portions of the agreements and the Meetings Order.

The court also determined that there would be two classes of creditors for voting on the Plan: a Secured Creditor Class and an Unsecured Creditor Class, with the latter including Term Loan Lenders and various class action plaintiffs.

The court ordered expedited summary proceedings to value the class action claims and requested supplementary submissions on the differential consideration offered to unsecured creditors.

The Applicants, a group of Just Energy entities under CCAA protection, sought an order authorizing them, as foreign representative, to pursue claims under s. 36.1 of the CCAA (fraudulent preferences and transfers undervalue) in a U.S. Bankruptcy Court adversary proceeding against the Electricity Reliability Council of Texas (ERCOT) and the Texas Public Utilities Commission (PUCT).

ERCOT challenged the foreign representative's standing, arguing that only the Monitor had such standing under a strict reading of s. 36.1(2)(b) of the CCAA.

The court, emphasizing a broad and liberal interpretation of the CCAA and its interplay with the BIA, found that s. 36.1(1) allows for "modifications that the circumstances require." It ruled that allowing the foreign representative to pursue the claims, with the Monitor's support and supervision, was consistent with the CCAA's objectives of facilitating debtor restructuring and benefiting stakeholders.

The court granted the order, allowing the foreign representative to pursue the claims nunc pro tunc, with the Monitor assisting and supervising.

In the context of a complex CCAA restructuring, the applicants sought approval for several motions, including a second Key Employee Retention Plan (KERP), an extension of the stay of proceedings, an extension of the DIP financing facility, and two corporate transactions involving the wind-up of subsidiaries.

US class action plaintiffs opposed the KERP and DIP extension, arguing they would deplete the estate.

The court approved all requests, finding the KERP and DIP extension necessary to maximize creditor recovery and advance a restructuring plan.

The court also used its broad jurisdiction under s. 11 of the CCAA to approve a corporate dissolution that technically violated the solvency requirements of the CBCA, as the transaction benefited the estate and did not prejudice stakeholders.

Just Energy Group Inc. and its affiliates sought an initial order for protection under the Companies' Creditors Arrangement Act (CCAA) due to a severe liquidity crisis.

This crisis stemmed from unprecedented and controversial price increases imposed by Texas regulators (ERCOT and PUCT) following an extreme winter storm.

The court granted a 10-day stay of proceedings, approved a $125 million debtor-in-possession (DIP) financing, stayed regulatory actions in Canada and the U.S., authorized charges for essential suppliers, and stayed set-off rights.

The court also approved administrative and directors and officers charges.

However, the request for third-quarter bonus payments was denied for the initial order, to be reconsidered at a later hearing.