Court File and Parties

COURT FILE NO.: CV-14-00010695-00CL DATE: 20230505 ONTARIO SUPERIOR COURT OF JUSTICE (COMMERCIAL LIST)

IN THE MATTER OF THE COMPANIES’ CREDITORS ARRANGEMENT ACT, R.S.C. 1985, c. C-36, AS AMENDED

AND IN THE MATTER OF A PLAN OF COMPROMISE OR ARRANGEMENT WITH RESPECT TO U. S. STEEL CANADA INC.

BETWEEN:

U.S. STEEL CANADA INC. et al. Plaintiffs – and – THE UNITED STEEL PAPER AND FORESTRY, RUBBER, MANUFACTURING, ENERGY, ALLIED INDUSTRIAL AND SERVICE WORKERS INTERNATIONAL UNION (UNITED STEEL WORKERS et al.) Defendants

COUNSEL: Richard B. Swan, Raj S. Sahni and Danish Afroz, counsel for the Monitor, Ernst & Young Inc. and Interim Land Restructuring Officer Geoff R. Hall, James D. Gage and Saneea Tanvir, counsel for Stelco Inc. Robert B. Bell, Roger Jaipargas and Emily Y. Fan, counsel for DGAP Investments Limited Andrew J. Hatnay and James Harnum, representative counsel for non-union retirees and active employees of U.S. Steel Canada Inc. Tracey Henry and Brendan Scott, counsel for USW Local 1005 ELHT and Pension Deficit Funding Trust Max Starnino, counsel for USW Local 8782 (FLHT) David Bish, counsel for the Plan Administrator, LifeWorks

HEARD: April 25, 2023

Endorsement

McEwen, j.

[1] I am releasing this decision by way of endorsement given the time sensitive nature of the issues in question.

[2] There are two motions before the Court:

(i) A motion brought by Stelco Inc. (“Stelco”) seeking, amongst other things, an order authorizing and directing Ernst & Young Inc. (the “Monitor”), in its capacity as the court-appointed interim Land Restructuring Officer (the “LRO”) [1] in respect Legacy Lands Limited Partnership (the “Land Vehicle”), to execute and deliver the Securities Purchase Agreement (the “SPA”) with Stelco and other stakeholders.

(ii) A motion brought by DGAP Investments Ltd. (“DGAP”) seeking a timetable by which certain transactions should take place before the closing of the SPA. Specifically, DGAP seeks the following timetable:

• That the severance referred to in the Reconveyance Agreement take place by May 5, 2023.
• The Reconveyance Agreement be completed by May 10, 2023.
• The agreement of purchase and sale entered into between DGAP and LandCo [2] (the “DGAP Sale Agreement”) close by May 30, 2023.

BACKGROUND

[3] I do not propose to set out the background to this motion in detail as it is set out in my prior decision dated December 19, 2022 (the “December Reasons”). [3]

[4] Briefly, however, for the purposes of these two motions, I note that subsequent to the December Reasons and prior to the appeal decision, Stelco made an unsolicited proposal to the Monitor, in its capacity as LRO, and the employees, retirees and pensioners (the “Stakeholders”) whereby the LRO and the Stakeholders would sell their ownership interest in the Land Vehicle to Stelco. LandCo is part of a number of special purpose entities which were created to hold land (the “Land Vehicle”) for the benefit of the Stakeholders.

[5] The Monitor informed DGAP of this development and sought and received directions from this Court to pursue negotiations with Stelco. The SPA is a result of the arms-length negotiations that have taken place between Stelco and the Stakeholders. It will allow the Stakeholders to sell their interests in the Land Vehicle and exit this long-standing Companies’ Creditors Arrangement Act, R.S.C. 1985, c. C-36 proceeding (“the CCAA Proceeding”) including the ongoing, at times bitter, litigation between Stelco and DGAP.

[6] Throughout this time period, the Monitor had also been continuing negotiations with DGAP with respect to the DGAP Sale Agreement. They have, however, been unable to agree on the terms of amending agreements to the DGAP Sale Agreement and to date the DGAP Sale Agreement has not been finalized.

[7] DGAP is, unsurprisingly, unhappy with this turn of events. DGAP submits that the SPA is a bad-faith ruse generated by Stelco to obstruct the completion of the Reconveyance Agreement and scuttle the resulting DGAP Sale Agreement. Stelco could then retain the lands in the Land Vehicle for itself and avoid what it has described to be an “existential threat” to its operations given the lands contained in the DGAP Sale Agreement abut its Lake Erie Works steel plant (see paras. 35, 73-74 of the December Reasons).

[8] Accordingly, DGAP seeks an order wherein I timetable the execution of the steps to be completed under the Reconveyance Agreement and the closing of the DGAP Sale Agreement before the SPA can take effect so that Stelco’s alleged lack of good faith can be avoided. [4]

[9] Subject to my comments below, I grant Stelco’s motion and dismiss DGAP’s motion.

STELCO’S MOTION

[10] Stelco’s motion to approve the SPA is supported by the Stakeholders and derives from extensive negotiations between Stelco and the Stakeholders. It is important to note that the Monitor did not engage with these parties or participate in the negotiations regarding the economic terms of the SPA. Rather, in accordance with this Court’s advice and direction, the Monitor reviewed the SPA and other transaction documents strictly from the perspective of the Monitor and only with respect to LRO-related issues.

[11] Generally speaking, Stelco submits that the SPA ought to be approved now, and not subsequent to the timetable proposed by DGAP, for a number of reasons, primarily:

• The SPA and the DGAP Sale Agreement are not mutually exclusive. The SPA involves the sale of units in the Land Vehicle, while the DGAP Sale Agreement involves the sale of land. Both can proceed.
• If the SPA proceeds, there will simply be a new legal owner of the Land Vehicle, i.e. Stelco, which will continue on with the completion of the Reconveyance Agreement and the DGAP Sale Agreement.
• Both of the aforementioned transactions will continue to be supervised by this Court pursuant to s. 11 of the CCAA.
• Allowing the SPA to proceed provides enormous benefits to the Stakeholders who will receive the advantage of an immediate cash payout. This was the entire purpose behind the creation of the Land Vehicle. It would further extract the Stakeholders from ongoing litigation generally fueled by Stelco and DGAP, and would end the cost burden on the Stakeholders of the ongoing litigation and the Monitor’s involvement.
• With the Stakeholders and the Monitor exiting the matter, this helps “unravel the knot” of the competing interests and allows Stelco and DGAP to directly deal with each other.
• Stelco has not failed to act in good faith. It is simply rationalizing the current situation where the DGAP Sale Agreement has not yet closed and DGAP and the Stakeholders continue their negotiations with the benefit of the Monitor.
• Further, in this regard, there should be no linking of timelines between the SPA and DGAP Sale Agreement since there is no clear path as to how long it will take to complete the outstanding requirements contained in the Reconveyance Agreement, particularly the completion of the provisions of Article 4.1(m): the shared facilities and/or reciprocal easement agreements (the “Reciprocal Agreements”). Stelco submits that it would be better to have ongoing court supervision than setting arbitrary dates.
• Similarly, putting the SPA on hold pending the completion of the Reconveyance Agreement and the DGAP Sale Agreement essentially places the Stakeholders in limbo when they could immediately accrue the benefits of the SPA.
• In conjunction with the SPA, the Stakeholders as well as the Monitor could obtain the usual releases as contemplated in the CCAA Proceeding.

[12] The Stakeholders, as noted, support Stelco. Specifically, it bears noting that counsel for the unions and non-union retirees are very keen to end their involvement given the age demographic of their particular stakeholders and the fact that any surplus, which is anticipated, would accrue to the benefit of those stakeholders pursuant to the provisions of the Pension Benefits Act, R.S.O. 1990, c. P.8 and the corresponding regulation: Stelco Canada Inc. Pensions plans, O. Reg. 255/17. They stress that their stakeholder group has entered into good faith negotiations with Stelco concerning the SPA. The proposed outcome, they submit, will accomplish the monetization of the Land Vehicle in its entirety for the purpose of funding the Stelco plans for their benefit. This is consistent with the CCAA Proceeding, the whole purpose of which was establishing the Land Vehicle in the first place.

[13] Overall, they assert that Stelco’s acquisition of their interest in the Land Vehicle is in their best interest: it will provide for the immediate monetization of their interest where their stakeholder group consists of mainly elderly persons and it will end the expense and delay of the ongoing litigation, particularly where they feel that they are in the “cross-fire” of litigation between DGAP and Stelco.

[14] Last, they submit that all Stakeholders have a right to sell their interest in the Land Vehicle. Therefore, for all of the above reasons, the SPA should proceed.

[15] The other interested stakeholder, the Plan Administrator, LifeWorks, also supports the SPA; however, it is in a slightly different position since the pension plans hold their own specific units in the Land Vehicle and are now fully funded and not subject to any surplus. That being said, LifeWorks seeks an end to its involvement in this expensive litigation and supports the other Stakeholders and Stelco for the reasons above.

[16] DGAP opposes Stelco’s motion, taking an entirely different view. DGAP submits that this is really a dispute concerning the timing between the completion of the SPA on one side and the Reconveyance Agreement and the DGAP Sale Agreement on the other. DGAP asserts that it is only fair to have their preferred transactions completed first as per its schedule and approved by this Court. It makes this submission primarily for the following reasons:

• Stelco has failed to act in good faith by purposely delaying the closing of the Reconveyance Agreement while attempting to take control of the lands subject to the DGAP Sale Agreement via the SPA. In this regard, DGAP submits that Stelco has done virtually nothing to complete the Reconveyance Agreement since the December Reasons were released and, instead, without advising DGAP, entered into negotiations with the Stakeholders to purchase their interest in the Land Vehicle.
• In particular, DGAP submits that the steps to complete the severance conditions in the Reconveyance Agreement are simple and straight forward, simply requiring a modest fee, undertaking and digital copy of the existing registered reference plan. Similarly, the Reciprocal Agreements contemplated by Article 4.1(m) of the Reconveyance Agreement are not difficult and could be easily accomplished with the assistance of this Court. In this regard, DGAP submits that this Court could order that the DGAP Sale Agreement close with DGAP’s undertaking to finalize the Reciprocal Agreements with Stelco, which should prove to be a non-issue.
• DGAP further submits that there is no urgency to the SPA.

[17] DGAP’s allegations that Stelco has failed to act in good faith include: the fact that Stelco will control the DGAP Sale Agreement under the SPA; Stelco will obtain the ability to weaponize the closing date under DGAP Sale Agreement, which it will do given its aversion to DGAP purchasing the lands contained in the APS; Stelco has refused to disclose the purchase price under the SPA; Stelco has denied the existence of this Court’s supervisory powers in the CCAA Proceeding; and Stelco is in effect seeking to gain an interest in the land subject to the DGAP Sale Agreement via the SPA.

[18] DGAP also opposes the provision of broad releases by this Court to the Monitor and Stakeholders. It submits that the test for the approval of the third-party releases set out in Metcalfe & Mansfield Alternative Investments II Corp., (Re), 2008 ONCA 587, 92 O.R. (3d) 513 has not been met.

[19] Last, based on all the above, DGAP submits that the SPA, if approved, permits Stelco to gain control of the DGAP Sale Agreement, thus undermining the efficacy and integrity of the CCAA Proceeding.

DGAP’S MOTION

[20] Relying upon many of the arguments it has raised above, DGAP submits that the Reconveyance Agreement and DGAP Sale Agreement ought to be completed as per its proposed schedule, and before the closing of the SPA. In this regard, DGAP submits that the Court, in the December Reasons, ordered Stelco to complete the Reconveyance Agreement. Further, the DGAP Sale Agreement has been Court-approved and ought to close as per its schedule. This would avoid Stelco’s alleged bad-faith conduct as it would not be allowed to delay, hinder or defeat the DGAP Sale Agreement. DGAP submits that existing court orders must be complied with and cannot be ignored. In this regard, DGAP further submits the integrity of the CCAA Proceeding requires compliance with the previous, aforementioned Court orders.

[21] The fact that Stelco attempted to avoid its obligations under the Reconveyance Agreement, has done very little to complete these obligations since the December Reasons, despite the Court’s orders and has now entered into the SPA, demonstrates Stelco’s true intentions to do everything it can to frustrate the DGAP Sale Agreement. DGAP asserts that allowing the SPA to close in advance of the Reconveyance Agreement and the DGAP Sale Agreement would reward Stelco’s bad behaviour by allowing Stelco the opportunity to thwart both the provisions of the Reconveyance Agreement and the DGAP Sale Agreement, as well as the previous orders by this Court in the December Reasons.

[22] DGAP submits that this is essentially a foregone conclusion given Stelco’s vociferous opposition to DGAP’s proposed development. In this regard DGAP further relies upon comments I made in the December Reasons where I found that while DGAP had not established that Stelco failed to act in good faith, I was troubled by Stelco’s conduct (see paras. 114-127).

[23] In support of its submissions, DGAP relies upon the opinion of Adam Sherman, a Senior Vice-President at Richter Inc. Although Mr. Sherman’s report was not referenced during oral argument, it is contained DGAP’s Second Supplementary Motion Record. For the reasons set out in his report, Mr. Sherman concludes that the DGAP Sale Agreement needs to close prior to this Court allowing the SPA.

[24] Based on the above, DGAP submits that based on the broad powers conveyed upon this Court by s.11 of the CCAA, its motion ought to be granted.

[25] Stelco, also largely relying on the above submissions with respect to its own motion, disagrees and is likewise supported by the Stakeholders. Stelco argues that it has not failed to act in good faith as noted above and submits that both the SPA, the Reconveyance Agreement and the DGSP Sale Agreement should be allowed to proceed on separate tracks, which is commercially sensible and benefits the Stakeholders.

[26] In response to my concern that if Stelco purchased the Land Vehicle it would in essence have complete control of the Reconveyance Agreement, and DGAP would have no insight or participation in the completion of the Reconveyance Agreement, Stelco provided the Court with the following undertaking:

If Stelco’s acquisition of the Land Vehicle is permitted to proceed, Stelco acknowledges that Empire/DGAP can raise any positions that LandCo or the Land Vehicle could raise with respect to compliance with the Reconveyance Agreement and Stelco would not take the position that Empire/DGAP does not have standing to do so.

[27] Stelco therefore argues that DGAP’s ability to participate in the completion of the Reconveyance Agreement is unencumbered and it therefore suffers no prejudice insofar as the remaining negotiated terms are concerned. Both Stelco and DGAP concede that the Reciprocal Agreements contemplated in Article 4.1(m) could be determined by this Court if they cannot reach an agreement.

[28] Stelco also submits that it is not inappropriately pursuing its own self-interest. It argues that the SPA is beneficial to both Stelco and the Stakeholders. Stelco will acquire beneficial ownership of lands adjacent to its facilities that are currently listed for sale by the Land Vehicle that will provide Stelco with enhanced operational flexibility. Stelco claims that it seeks to improve its relationship with the Stakeholders given their troubled history. It further allows the Monitor to be discharged along with its ongoing professional fees.

[29] Stelco also takes issue with Mr. Sherman’s report, arguing that it is inadmissible for a number of reasons. In the alternative, if admissible, the report should be rejected in its entirety. First, Stelco submits that Mr. Sherman purports to opine on the ultimate issue before the Court. Second, Stelco submits that Mr. Sherman’s report consists of an advocacy piece based on inaccurate facts.

[30] As noted, the Stakeholders support Stelco. They further stress that the SPA provides significant monetary benefit to them, as noted above, and that it is critical that they be allowed to exit this long, outstanding CCAA Proceeding and the ensuing litigation between Stelco and DGAP which the Monitor describes, accurately, as a “maelstrom”.

[31] With respect to DGAP’s motion, it is noteworthy that, since my March 4, 2021 Order which confirmed the authority of the Monitor to execute documents for the Land Vehicle to enter into transactions with DGAP, those transactions are ongoing and the DGAP Sale Agreement has not been completed. In the Monitor’s Fifty-fifth Report, the Monitor indicates that the most recent Amending Agreement submitted by DGAP is materially different from the previous iteration and that the Monitor and Stakeholders have not agreed upon the terms of a final agreement with DGAP. [5]

[32] The Monitor stresses that the interests of the Stakeholders are very important and that it is therefore important that the current disputes before the Court end and this matter move to the next phase: the completion of the outstanding transactions and an end to the ongoing litigation.

[33] The Monitor also points out that both Stelco and DGAP agree that the SPA and the DGAP Sale Agreement are not incompatible or mutually exclusive. Both can proceed, although these parties disagree on timing.

[34] The Monitor further points out that the only complicating feature in the Reconveyance Agreement concerns the Reciprocal Agreements under Article 4.1(m). The Monitor agrees that the Court can assist the parties in this dispute if necessary.

[35] The Monitor also supports Stelco’s submissions that the Monitor, and its counsel, ought to be afforded the usual releases should its participation in the CCAA Proceeding cease after the SPA is completed. The Monitor, however, further submitted that moving forward it would be available to fulfil any role requested by this Court.

ANALYSIS

[36] I begin with my decision to grant Stelco’s motion. The SPA ought to be approved at this time.

[37] The CCAA Proceeding has carried on for over eight years. A key feature of the CCAA plan was the conveyance of certain lands owned by U.S. Steel Canada Inc. (now “Stelco”) to the Land Vehicle to be monetized for the benefit of the Stakeholders. Subsequently, there have been numerous sales of parcels of land in the neighbourhood of 12-15 transactions. All of these were approved by this Court.

[38] Undoubtedly, but for the dispute involving DGAP, it would be entirely sensible to approve the current SPA as it is consistent with the previous orders of this Court which approved the aforementioned transactions for the benefit of the Stakeholders.

[39] Also, the current SPA is also to the benefit of the Stakeholders as it would accomplish the monetization of the Land Vehicle in its entirety and extricate the Stakeholders from the significant ongoing and adversarial litigation between DGAP and Stelco. Accordingly, their participation in the CCAA Proceeding would come to a conclusion and they would avoid ongoing significant legal expense.

[40] There is certainly no allegation that the Stakeholders have, in any way, failed to act in good faith or in any conflict of interest. Nor is there any evidence that they have acted dishonestly or unreasonably in negotiating the SPA.

[41] Furthermore, the SPA stands separate and apart from the DGAP Sale Agreement. The SPA provides for the acquisition by Stelco of all of the Stakeholders’ partnership units in the Land Vehicle. Subject to my comments below, the DGAP Sale Agreement is unaffected by the SPA and involves the purchase of certain parcels of land. It therefore cannot be said that there are competing interests in the same land. Also, DGAP has had several months to complete the DGAP Sale Agreement with the Monitor and the Stakeholders. I am not confident that, even with Court assistance, a quick resolution is in sight.

[42] Based on the above, I accept that the Stakeholders’ submissions provide compelling reasons to allow the SPA to close pursuant to its terms at this time.

[43] The only possible justification for delaying the closing of the SPA would involve a finding that Stelco has not acted in good faith, including its failure to complete its obligations under the Reconveyance Agreement after the December Reasons while entering into negotiations with the Stakeholders. I am not prepared to make such a finding. As I set out in the December Reasons, a finding of a lack of good faith cannot be premised solely on questionable motives, but requires an assessment made regarding actual objective facts of things done or not done: see Bank of Montreal v. 592931 Ontario Inc., 2021 ONSC 4412, at para. 48.

[44] After the December Reasons were released, and prior to the aforementioned decision of the Court of Appeal, it is true that Stelco and the Monitor did very little to complete the severance of the Reconveyance Parcel and complete the transfer of title to the Land Vehicle. While this is regrettable, I cannot conclude that this constitutes a failure to act in good faith.

[45] After Stelco approached the Monitor, the Monitor sought advice and some directions from this Court and received approval to, amongst other things, pursue discussions with Stelco with respect to a sale of an interest in the Land Vehicle. Generally, throughout this period, DGAP was also continuing its negotiations with the Monitor concerning the DGAP Sale Agreement but, as noted above, was unable to conclude the DGAP Sale Agreement with the Monitor.

[46] While it would have been preferrable for Stelco and the Monitor to continue discussions concerning the completion of the Reconveyance Agreement, I do not conclude, in all of the circumstances, that Stelco’s failure to be more active (it did send an email to the Monitor that apparently went unanswered and nothing further took place) rises to the level of a lack of good faith. Subsequent to the December Reasons and prior to the decision of the Court of Appeal, there were a number of court attendances and discussions surrounding the SPA and the negotiation of the DGAP Sale Agreement. Nothing has occurred to date that would frustrate the completion of the Reconveyance Agreement or the completion of the DGAP Sale Agreement. Undoubtedly, Stelco is acting in its own self-interest, but is entitled to do so and the SPA is of great importance to the Stakeholders. [6] Although I maintain concerns about Stelco’s motives, to date, its actions subsequent to the December Reasons do not amount to a lack of good faith and the time has come to allow the Stakeholders to exit the CCAA Proceeding. I further do not accept DGAP’s other arguments concerning Stelco’s failure to act in good faith. In a similar vein, it cannot be said that Stelco is coming to the court without clean hands.

[47] Insofar as future conduct is concerned, the CCAA Proceeding continues to be closely case-managed. The Reconveyance Agreement must and ought to be completed as soon as possible. I am prepared to develop the necessary schedule with the parties to ensure a timely completion. At the conclusion of these motions, I directed Stelco to continue on with completion of the Reconveyance Agreement and given its aforementioned undertaking, DGAP will now become involved in the completion of the Reconveyance Agreement. Similarly, I expect Stelco, as well as DGAP, to continue negotiating in good-faith with respect to the DGAP Sale Agreement.

[48] As discussed at the hearing for the motions, I am directing the Monitor to remain engaged as the eyes and ears of this Court both with respect to the completion of the SPA, but also with respect to the completion of the Reconveyance Agreement and the DGAP Sale Agreement. Once the SPA is complete and the Stakeholders exit the CCAA Proceeding, I further direct that the Monitor and its counsel fees and disbursements be paid equally by Stelco and DGAP, on a without prejudice basis to be readjusted at a later date. The Monitor has agreed to stay on and provide any assistance that the Court directs.

[49] In my view, the ongoing Court involvement, with the assistance of the Monitor and Stelco’s undertaking, will properly address DGAP’s concerns with respect to ongoing negotiations concerning the DGAP Sale Agreement now with Stelco. As noted, however, I do not believe that it is appropriate that the Stakeholders remain in limbo while these negotiations take place. Nor am I convinced that the negotiations could be completed within a tight timeline as submitted by DGAP.

[50] Further, at the motions, time did not permit the parties to outline for the Court the exact provisions of Stelco’s proposed order concerning the SPA. The parties can attend before me in short order not only to deal with the settling of the order, but also with respect to timing issues concerning the completion of the Reconveyance Agreement and the DGAP Sale Agreement.

[51] I pause here to comment on Mr. Sherman’s Report. While I have admitted the Report for the purposes of these motions, I am of the view that Mr. Sherman’s evidence opines on the ultimate issue before the Court. While that does not disqualify the opinion in and of itself, I prefer to chart my own path. Expert evidence in the factual matrix of this case is not particularly useful.

[52] On a related issue, insofar as the releases sought by the Stakeholders and the Monitor are concerned, I see no reason why these releases cannot be granted. DGAP asserts that the test for approval of third-party releases enunciated in Metcalfe has not been met. I do not agree. Metcalf establishes that this Court has broad discretion to provide the necessary releases, not only upon the consideration of a sanction order in connection with a motion to approve a plan under the CCAA (which has already occurred in the Stelco proceedings). Such a submission, in my view, runs contrary to DGAP’s submissions in the December motion wherein the provisions of the CCAA should still apply. If I were to accept DGAP’s submission, I could no longer provide any third-party releases to anyone, including the Monitor, which surely cannot be the case.

[53] It is sensible and necessary that the Monitor, its counsel and the Stakeholders obtain releases with respect to the completion of their participation in the Land Vehicle leading up to the completion of the SPA.

[54] I also agree that a sealing order should go with respect to the modest redactions contained in the SPA concerning, generally speaking, monetary considerations. In my view, the test for granting a sealing order set out in Sherman Estate v. Donovan, 2021 SCC 25, 458 D.L.R. (4th) 361, at para. 38 has been met in the circumstances. The redacted portions contain confidential and sensitive commercial information regarding specific business terms of the SPA and the disclosure would negatively impact the Stakeholders and thus there is a broader public interest in maintaining confidentiality: Sherman Estate, at para. 41. The proposed redactions are minimal in nature and protect the commercial interests of the Stakeholders and Stelco. Moreover, the benefits of the selective sealing order outweigh the negative effects.

[55] Last, I conclude by noting that this Endorsement includes a general way forward. Undoubtedly the parties to the motions will require further assistance from the Court, as will the Monitor concerning its role forward. The Commercial List will provide the parties with a date for a case conference to discuss next steps.

DISPOSITION

[56] For the reasons noted above, Stelco’s motion is granted and DGAP’s motion is dismissed.

McEwen J.

Released: May 05, 2023

COURT FILE NO.: CV-14-00010695-00CL DATE: 20230505 ONTARIO SUPERIOR COURT OF JUSTICE (COMMERCIAL LIST) IN THE MATTER OF THE COMPANIES’ CREDITORS ARRANGEMENT ACT, R.S.C. 1985, c. C-36, AS AMENDED AND IN THE MATTER OF A PLAN OF COMPROMISE OR ARRANGEMENT WITH RESPECT TO U. S. STEEL CANADA INC.

BETWEEN:

U.S STEEL CANADA INC. et al. Plaintiffs – and – THE UNITED STEEL PAPER AND FORESTRY, RUBBER, MANUFACTURING, ENERGY, ALLIED INDUSTRIAL AND SERVICE WORKERS INTERNATIONAL UNION (UNITED STEEL WORKERS et al.) Defendants

ENDORSEMENT McEwen J. Released: May 05, 2023

[1] For the sake of convenience I will refer to the Monitor/LRO as simply the “Monitor”.

[2] While DGAP technically entered the DGAP Sale Agreement with the LandCo Vendor, I will refer to the agreement as between DGAP and LandCo for simplicity.

[3] U.S. Steel Canada Inc. et al. v. The United Steel Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union et al., 2022 ONSC 6993, leave to appeal refused, 2023 ONCA 277.

[4] Obviously, given the timing of the release of this Endorsement, these timelines would have to be adjusted.

[5] Fifty-Fifth Report of the Monitor dated March 28, 2023, at para. 61.

[6] In this regard, I do not accept DGAP’s submission that Stelco the actions of Stelco and the Stakeholders do not comply with the principles set out in Royal Bank of Canada v. Soundair Corp. (1991), 4 O.R. (3d) 1.