Bankruptcy and Insolvency Law - OCA

HSBC Bank Canada brought a motion for an order that Jack Lechcier-Kimel requires leave to appeal an order adding HSBC as a creditor in his bankruptcy application.

Lechcier-Kimel brought a cross-motion for leave to appeal.

The Court of Appeal held that leave is required because adding a party does not involve future rights under s. 193 of the Bankruptcy and Insolvency Act.

The court further held that a single judge has jurisdiction to grant leave.

Leave to appeal was refused because the proposed grounds of appeal lacked prima facie merit.

The appellants appealed a sealing order that redacted the amounts to be paid under two proposed settlement agreements in a CCAA proceeding.

The appellants argued the sealing order unjustifiably infringed the open court principle.

The Court of Appeal dismissed the appeal, finding that litigation settlement privilege applied to the settlement agreements until approved by the court.

The court held that the sealing order was a minimal intrusion on the open court principle, the requirement to sign a confidentiality agreement did not impose an undue burden, and the respondents did not waive privilege by complying with the court order.

Following a decision in CCAA proceedings, the parties made written submissions on costs.

The court approved an agreement to pay the Retirees' full indemnity legal fees from the Executive Plan fund.

The court declined to make a similar order for the United Steelworkers regarding the Salaried Plan.

The court made no order as to costs for the underlying motions, following conventional CCAA practice.

For the appeal, the Retirees and the USW were awarded partial indemnity costs fixed at $40,000, payable jointly and severally by Sun Indalex and the U.S. Trustee.

The tenant obtained creditor protection under the CCAA and sent a letter to the landlord repudiating its commercial lease.

The landlord did not acknowledge or accept the repudiation.

The tenant subsequently went bankrupt, and the trustee in bankruptcy disclaimed the lease, disallowing the landlord's claim for unrecoverable expenses for the remainder of the lease term.

The landlord's successor appealed the dismissal of its motion to set aside the disallowance.

The Court of Appeal dismissed the appeal, holding that an unaccepted repudiation does not terminate a lease, and therefore the lease remained in effect at the date of bankruptcy and was subject to the trustee's statutory disclaimer.

The appellant credit union appealed a Superior Court decision which held that the provincial two-year limitation period did not apply to a trustee's fraudulent preference claim under s. 95 of the Bankruptcy and Insolvency Act due to the doctrine of paramountcy.

The Court of Appeal allowed the appeal, finding no operational conflict or frustration of federal purpose between the provincial Limitations Act and the federal bankruptcy statute.

The court reinstated the Registrar's original order dismissing the trustee's claim as statute-barred.

The appellant appealed an order staying and dismissing his action against the respondents as an abuse of process.

The motion judge found that the appellant's claims were barred by a broad release contained in a Plan of Compromise and Arrangement under the CCAA that restructured the Canadian market for Asset-Backed Commercial Paper (ABCP).

The Court of Appeal upheld the motion judge's decision, agreeing that the release clearly captured the appellant's claims and that it would be unjust to allow his claim to proceed in isolation after he had participated in the CCAA proceedings and voted in favour of the Plan.

The appellant, a secured creditor, appealed an order approving a receiver's proposed purchase agreement and technology license agreement for the assets of the respondent companies.

The appellant argued that the proposal was identical to one previously rejected by another judge.

The Court of Appeal dismissed the appeal, finding that the new proposal differed significantly and that the motion judge appropriately applied the Soundair principles in approving the transaction, given the changed circumstances and the need to sell the subsidiary as a going concern.

The appellant appealed the decision of the Superior Court of Justice revoking his discharge from bankruptcy.

The appeal judge had admitted fresh evidence showing the appellant failed to disclose significant assets, and directed him to file a fresh statement of affairs.

The Court of Appeal upheld the decision, finding the failure to disclose significant assets was a serious omission justifying the revocation.

The respondents' cross-appeal on costs was also dismissed.

The appellant appealed an order appointing a receiver over its social housing projects.

The Court of Appeal dismissed the appeal, finding no error in the application judge's exercise of discretion.

The respondent was the only entity with a direct financial interest, and the appellant was insolvent.

The court agreed that a receiver was appropriate to protect the social housing stock, even pending the determination of the appellant's separate motion regarding disputed subsidies.

The appellant challenged the legal effectiveness of a transfer of shares in a closely held corporation by a bankrupt shareholder's trustee in bankruptcy to another corporation.

The appellant argued the transfer did not comply with share transfer restrictions.

The Court of Appeal dismissed the appeal, finding that equitable title had passed for good consideration and that any defect in the original transfer was cured by a subsequent confirming transfer by the trustee.

The interim receiver of a bankrupt company sought to distribute funds from operating assets to a secured creditor.

The pension plan administrator opposed, claiming priority under a statutory lien for unpaid pension contributions pursuant to s. 57(5) of the Pension Benefits Act.

The Ministry of the Environment also opposed, arguing funds should be retained for environmental remediation.

The Court of Appeal dismissed both appeals, holding that the pension administrator is not a secured creditor under the Bankruptcy and Insolvency Act because the unpaid contributions are not a debt due to the administrator.

The Court also held that the MOE was an unsecured creditor regarding the operating assets and that the BIA's specific provisions for environmental claims governed.

The appellant appealed an order striking his claim against a court-appointed trustee.

The Court of Appeal dismissed the appeal, finding that the allegations related to the trustee's conduct in its appointed capacity and the appellant had failed to seek leave to sue as required by section 215 of the Bankruptcy and Insolvency Act.

The appellants appealed an order declaring that they had repudiated Minutes of Settlement and lifting a stay in bankruptcy proceedings to allow the respondent's action to continue.

The Court of Appeal held that the motion judge erred in making the declaration of repudiation because the relief was sought by motion rather than by originating process.

However, the Court upheld the order lifting the stay, finding that the motion judge correctly concluded there had been repudiation in the context of the motion to lift the stay.

The appeal was allowed in part to quash the declaration, but dismissed regarding the lifting of the stay.

Following the bankruptcy of Canada 3000, airport authorities sought to seize leased aircraft for unpaid charges.

The parties negotiated protocols allowing the release of the aircraft to the lessors in exchange for a Release Fund.

The Supreme Court of Canada later held that the authorities had a statutory right to detain the aircraft, which could be exercised against the substituted security.

The lessors appealed a motion judge's order allowing the authorities to draw on the Release Fund, arguing the preconditions of the protocols were not met.

The Court of Appeal dismissed the appeal, finding that the protocols were a voluntary commercial arrangement and the authorities' right to the fund was triggered by the judicial grant of the detention remedy.

In a complex CCAA restructuring of Stelco Inc., four appeals were brought regarding the distribution of assets among creditors.

The Court of Appeal upheld the motion judge's findings that Senior Debt Holders could enforce subordination and turnover provisions against Noteholders via trust principles, and that post-filing interest was payable.

However, the Court reversed the motion judge on two key issues: it found that a massive IT outsourcing contract was not in the 'ordinary course of business', thereby elevating its assignee to Senior Debt status, and it ruled that the distributed securities must be valued at the 'Plan value' ($5.50 per share) rather than the post-emergence market value.

The appellant appealed a judgment recognizing and enforcing a United States District Court judgment against him as guarantor.

The sole ground of appeal was that the motion judge erred in refusing to grant a stay of enforcement in Ontario pending the final decision of a New Jersey Bankruptcy Court.

The Court of Appeal dismissed the appeal, noting that the appellant had acknowledged owing millions of dollars, the US judgment was final, and the appellant had lost at every juncture in the collateral bankruptcy proceedings, including being refused a stay pending appeal in that court.

The appellant appealed a decision regarding her bankruptcy discharge, arguing she was entitled to an automatic discharge because the trustee in bankruptcy failed to include a recommendation on her discharge in his report.

The Court of Appeal dismissed the appeal, finding that the appellant had failed to perform several duties and tender required funds, and that the trustee's actions did not invalidate the procedure.

The appellants, who were discharged bankrupts, sought to appeal a declaration validating mortgages on their properties.

The respondent mortgagee brought a motion to quash the appeal on the basis that the appellants lacked standing.

The Court of Appeal allowed the motion to quash, finding that the properties remained vested in the trustee in bankruptcy.

Although the trustee took no position on the appeal and consented to the appellants proceeding, it had not abandoned its interest in the properties under section 40(1) of the Bankruptcy and Insolvency Act.

Following the dismissal of an appeal regarding a receiver's decision to permit a corporation in receivership to plead guilty in an American criminal trial, the respondents sought costs.

The appellants argued no costs should be awarded as the issues were novel and complex.

The Court of Appeal rejected this argument, finding the appeal involved a standard review of a Commercial List judge's discretion.

The Court awarded costs to the respondents on a partial indemnity basis, fixing the amounts at a fair and reasonable level rather than actual costs incurred, payable by Lord Black and Conrad Black Capital Corporation.

The applicant sought leave to appeal an order directing the receiver to file a Payments Report detailing distributions made by the insolvent companies.

The applicant argued the report could prejudice his ongoing criminal proceedings in the United States.

The Court of Appeal dismissed the motion for leave to appeal, finding that the receiver's duty is to the economic interests of the estate's stakeholders, not to protect a stakeholder's personal interest in avoiding prejudice in foreign criminal proceedings.

The proposed appeal was found to lack prima facie merit.