Mike Noel

On a CCAA motion, the moving parties sought approval of a reverse vesting transaction and ancillary relief following a court-approved SISP with a stalking horse credit bid.

The court applied the s. 36(3) criteria and found the process was transparent, adequately marketed, monitor-supervised, and fair and reasonable in the circumstances.

The court accepted the monitor’s evidence that a going-concern outcome would produce materially better stakeholder outcomes than liquidation and would preserve enterprise value while reducing restructuring costs.

Applying the Harte Gold framework, the court held the reverse vesting structure was necessary, economically superior to viable alternatives, non-prejudicial to stakeholders relative to alternatives, and reflective of fair value for preserved intangibles.

The motion was granted and both the Reverse Vesting Order and Ancillary Order were approved.

This endorsement grants initial relief under the Companies’ Creditors Arrangement Act (CCAA) to Synaptive Medical Inc., a Toronto-based medical device company facing a liquidity crisis and insolvency.

The court finds Synaptive to be a “debtor company” under the CCAA, appoints Richter Inc. as Monitor, approves a stay of proceedings, authorizes DIP financing with Export Development Canada, and grants administration, DIP lender, and directors’ charges.

The decision reviews the statutory and case law criteria for CCAA relief, including the expanded concept of insolvency and the requirements for interim financing and related charges.

The Monitor in a CCAA proceeding sought court approval for a complex transaction involving a reverse vesting order (RVO) structure for the sale of electricity generation facilities of the Validus Entities to Macquarie and Far North Power Corp. The motion also requested the addition of a new entity (Residualco) as a debtor, approval of the Monitor's reports and fees, and an extension of the stay period.

The court granted all requested relief, finding the transaction commercially reasonable and in the best interests of stakeholders, particularly due to the highly regulated nature of the business which made an RVO necessary to preserve numerous permits and licenses.

The court also confirmed the appropriateness of the releases granted to various parties involved in the restructuring.

In the receivership of the Stateview entities, Tarion Warranty Corporation brought a motion seeking declaratory relief on behalf of purchasers who had paid deposits for pre-construction homes.

Tarion argued that the deposits were subject to an express or constructive trust and sought a remedial constructive trust to elevate the purchasers' priority.

The court dismissed the motion, finding that the purchasers had contractually subordinated their interests to secured lenders.

While an express trust existed for contracts with early termination provisions, the funds were not segregated.

The court declined to impose a remedial constructive trust, as doing so would improperly upset the priority scheme under the Bankruptcy and Insolvency Act.

This motion concerned the priority of new home purchasers' deposits in the bankruptcy of residential real estate developers (Stateview entities).

Tarion Warranty Corporation sought declaratory relief, arguing that the deposits were subject to express or constructive trusts due to unjust enrichment, which would elevate purchasers' claims.

The court dismissed Tarion's motion, finding that purchasers' agreements contained subordination clauses giving priority to secured lenders.

The court also determined that while express trusts existed for some purchasers with early termination provisions, these were not statutory deemed trusts.

Furthermore, there was no unjust enrichment for purchasers without express trusts, as the operation of the Bankruptcy and Insolvency Act constituted a juristic reason.

The court declined to impose a remedial constructive trust, emphasizing the high bar for such remedies in insolvency proceedings and the lack of a close causal connection between the deposits and the real property proceeds.

KSV Restructuring Inc., as court-appointed Monitor and Receiver for the Validus Entities (a group of power generation companies), brought motions seeking approval of a Sales and Investment Solicitation Process (SISP), authorization to implement it, approval of a Stalking Horse Bid by Macquarie Equipment Finance Ltd. and Far North Power Corp., approval of bid protections (break fee and expense reimbursement), approval of an Unknown Contract Bar Process, approval of Monitor's reports, and an extension of the stay of proceedings.

Additionally, the Receiver sought to increase its borrowing limit.

The Validus Entities opposed certain terms of the SISP and the Stalking Horse Offer, arguing the quantum owed to Macquarie was overstated, unconscionable, violated the anti-deprivation rule, and raised concerns about HST treatment.

The court granted all relief sought by the Monitor/Receiver, finding the SISP fair and transparent, the quantum owed to Macquarie correctly calculated under the sale-leaseback agreements, the anti-deprivation rule not engaged as the default was contractual, and the HST issues appropriately deferred to a transaction approval motion.

The court emphasized the need for stability and timely action to maximize recovery.

This is an appeal from an order of the Commercial List judge concerning insolvency proceedings.

The appellants, Bryton, sought to exercise an option to purchase a property and obtain orders declaring the option valid and immune from challenge by other creditors under various acts (Fraudulent Conveyances Act, Assignments and Preferences Act, Canada Business Corporations Act oppression remedy, and Bankruptcy and Insolvency Act).

The application judge dismissed Bryton's request for a vesting order and declaratory relief, finding that the claims were not res judicata and that declaratory relief was not the appropriate vehicle to pre-emptively bar unadjudicated creditor claims.

The Court of Appeal upheld the application judge's decision, confirming that the validity of the option was not res judicata and that the refusal to grant declaratory relief was a proper exercise of discretion, as the application procedure was not suitable for dismissing unproven claims.