Monica Faheim

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.

The Court-Appointed Receiver brought a motion seeking to uphold the disallowance of a claim by Oscar Furtado against Go-To Stoney Creek Elfrida LP and Inc. for guarantee fees.

The Receiver argued the fees were undisclosed, related-party agreements made in breach of Furtado's fiduciary duties and were not reasonable or competitive.

The court found that Furtado, as a fiduciary, failed to provide full disclosure of the lucrative guarantee fee arrangement to investors, as it was not adequately disclosed in the limited partnership agreement, marketing brochure, or the auditor-withdrawn financial statements.

The Receiver's disallowance of the claim was upheld.

The court-appointed Receiver moved for approval of its Third Report, activities, and the fees and disbursements of the Receiver and its counsel.

The debtor opposed the approval of the fees, arguing they were unreasonable because the receivership was straightforward and the debtor had ultimately refinanced the property.

The court applied the Diemer factors and found the fees to be fair and reasonable, noting that the receiver's activities were necessary at the time they were undertaken pursuant to court orders.

The court approved the fees in the amount of $247,953.15 and awarded costs of the motion to the Receiver.

The Applicants in a CCAA proceeding sought approval of an amended Share Purchase Agreement (SPA) and a reverse vesting order (RVO) to facilitate the sale of their business as a going concern.

The transaction aimed to preserve cannabis licenses, maintain business operations, and retain approximately 95% of employees.

The motion was unopposed, receiving strong support from the two senior secured creditors (2125028 Ontario Inc. and Marzilli) and the Monitor.

The court found the RVO appropriate, satisfying the factors under CCAA section 36, the Soundair Principles, and the Harte Gold framework.

Ancillary relief, including third-party releases for parties crucial to the restructuring, such as the stalking horse bidder (Cardinal) who provided interim financing and waived fees, was also granted.

The stay period was extended to allow for post-closing matters.

The Applicants in a CCAA proceeding moved for a reverse vesting order to approve a transaction with a purchaser related to a secured creditor, Marzilli.

The transaction would vest out the first-ranking security interest of another creditor, 212, and transfer its debt to a residual entity with no assets. 212 opposed the motion, arguing its debt assumption was part of the stalking horse bid that set the floor for the sales process.

The court applied the Third Eye and Harte Gold factors, finding that 212 had not consented to the vesting out of its interest and that the equities favoured 212.

The court dismissed the motion for the reverse vesting order, concluding it was not equitable to extinguish 212's first-ranking security interest under the circumstances.

The Receiver brought a motion for a contempt order against the respondent for failing to comply with a Receivership Order.

The court previously found the respondent in contempt.

At the sentencing hearing, the court considered the respondent's subsequent efforts to purge his contempt, including attending examinations and providing documents, as well as his apology.

Applying the Cavalon factors, the court declined to impose a custodial sentence but ordered the respondent to pay a $15,000 fine, declaring it a penalty under s. 178 of the Bankruptcy and Insolvency Act.

The Receiver brought a motion for an order approving an interim cash distribution of $78 million to the two institutional unitholders in Bridging SMA 2 LP.

The court found it appropriate to make an interim distribution but reduced the amount to $46 million to account for the potential impact of substantively consolidating the various Bridging Funds, an issue that had yet to be determined.

The Receiver brought an unopposed motion for a Claims and Unitholdings Identification Order and for approval of its activities as described in its 12th Report.

The court found the proposed order practical and reasonable to assist the Receiver with the distribution process.

The motion was granted and the Receiver's activities were approved.

This is an appeal from a Superior Court order appointing a receiver and manager for Go-To Developments Holdings Inc. and related entities, and continuing freeze directions, following an Ontario Securities Commission investigation into alleged securities law breaches, including misappropriation of investor funds by Oscar Furtado.

The appellants challenged the application judge's denial of an adjournment and the admission of Mr. Furtado's examination transcripts.

The Court of Appeal dismissed the appeal, finding no error in the adjournment denial, especially in light of fresh evidence demonstrating further misconduct by Mr. Furtado.

The court declined to address the admissibility of transcripts as the issue was not raised below.

This endorsement provides reasons for granting an initial order under the Companies’ Creditors Arrangement Act (CCAA) to Trinity Ravine Community Inc., a registered charitable organization developing a senior citizens' life lease community project.

The applicant faced insolvency due to escalating construction costs and demands for deposit refunds from purchasers.

The court found the applicant met the CCAA requirements, including insolvency and good faith, and that a CCAA process was appropriate despite it being a real estate development, given its charitable purpose and the potential for maximizing creditor recoveries through a dual-track sale and investment solicitation process (SISP).

An initial administration charge was also granted to secure professional fees.