Michael De Lellis

The Bondfield Group, a major construction company, sought CCAA protection due to insolvency, over $1 billion in active contracts, and over 200 lawsuits.

The application was unopposed and resulted from extensive stakeholder negotiations.

The court granted an initial order for CCAA protection, including a stay of proceedings, approval of a tailored $8 million Debtor-in-Possession (DIP) facility funded by Zurich Insurance, an Administration Charge for professional fees, and a Directors' Charge for $3 million (excluding John Aquino).

The court emphasized the public interest in completing critical infrastructure projects and the preference for CCAA over receivership to preserve enterprise value.

The applicants, Imperial Tobacco Canada Limited and Imperial Tobacco Company Limited, sought an Initial Order under the Companies' Creditors Arrangement Act (CCAA) following a $13.5 billion judgment against them in Quebec.

The court granted the Initial Order, including a stay of proceedings, finding the applicants insolvent and that a stay was necessary to prevent serious harm to stakeholders and maintain the status quo.

The court also extended the stay to non-applicant affiliates and approved several charges, including an Administration Charge, a Tobacco Claimant Coordinator Charge, a Directors' and Officers' Charge, and a Sales and Excise Taxes Charge.

The applicants brought an ex parte motion for a preliminary interim order under section 192(4) of the Canada Business Corporations Act to facilitate a recapitalization transaction.

The proposed arrangement aimed to reduce the company's debt obligations by more than $2 billion.

The court found that the statutory requirements were met, the arrangement was put forward in good faith, and it was impracticable to effect the fundamental change under any other provision.

The court granted the preliminary interim order, including a broad stay of proceedings, to allow the company to advance the recapitalization transaction.