M. Starnino

A bankruptcy trustee brought a motion under s. 163(1) of the Bankruptcy and Insolvency Act seeking to compel former directors and an officer of the bankrupt entities to attend examinations under oath and produce documents concerning the bankrupts’ affairs.

The respondents argued that because the trustee had already commenced a civil action relating to a dividend transaction, the trustee could not rely on the statutory examination power absent exceptional circumstances and should instead obtain information through discovery in the action.

The court held that the trustee’s statutory examination powers are broad and are not limited to exceptional circumstances where litigation has commenced.

The court found the examinations were necessary for the proper administration of the bankrupt estate and not merely a step in the civil action.

The respondents were ordered to attend examinations and produce documents, with portions relevant to the civil action to count as discoveries to avoid duplication.

In ongoing proceedings under the Companies’ Creditors Arrangement Act, the applicants sought approval of an Employee Hardship Application Process and an extension of the stay of proceedings.

The requested hardship process was unopposed and approved.

Certain noteholders sought conditions requiring enhanced reporting and procedural safeguards in relation to the claims process and employee claims.

The court held that the statutory test under s. 11(6) of the CCAA was satisfied because the circumstances warranted the extension and the applicants had acted in good faith and with due diligence.

The stay extension was granted, while proposed procedural changes to the claims process were found more appropriately addressed through a motion to vary existing orders.

The applicant corporation sought relief under the Companies’ Creditors Arrangement Act including an initial order, a stay of proceedings, approval of a sale process, and authorization of administration and directors’ charges.

The court considered whether the corporation qualified as a debtor company and whether the requested restructuring steps were appropriate in the circumstances of significant financial distress and ongoing investigations.

The court accepted that the corporation was insolvent and that a restructuring under the CCAA was necessary to preserve enterprise value and explore a potential sale of business operations.

The court approved the requested charges, authorized the sale process, and granted ancillary relief including recognition proceedings in foreign jurisdictions.