Pat Corney

In a CCAA proceeding, the court considered supplementary written submissions regarding the appropriateness of differential consideration offered to unsecured creditors in the proposed Plan.

The court accepted the applicants' submission that the fairness of the differential consideration, which involves providing shares to Term Loan Lenders and cash to General Unsecured Creditors, should be determined at the Sanction Hearing rather than at the Meetings Order stage, given the low threshold for a Meetings Order and the presence of conflicting expert reports.

The Applicants sought an Authorization Order and Meetings Order under the CCAA.

The primary issues in dispute concerned the voting rights and classification of Litigation Claimants, which included uncertified U.S. class actions, a certified Ontario class action, and Texas mass tort claims.

The court held that the Litigation Claimants are creditors entitled to vote, but restricted them to one vote per action to prevent them from overriding other stakeholders on numerosity grounds.

The court also ordered summary proceedings to value their claims rather than accepting the Applicants' proposal to value them at $1.

Finally, the court declined to place the Term Loan Lenders in a separate class from other unsecured creditors, finding sufficient commonality of legal interests.

The Plaintiffs (Bondfield Construction Company Limited and Zurich Insurance Company Ltd.) brought a motion to stay summary judgment motions initiated by PricewaterhouseCoopers LLP (PwC) in complex professional negligence actions against auditors, which also involved significant fraud allegations and discoverability issues.

The court, acting as case management judge, granted the stay, determining that full documentary and oral discoveries were essential to ensure a fair and efficient process.

The decision highlighted the complexity of the case, the substantial damages sought, the allegations of long-standing fraudulent activities, and the potential for inconsistent findings if the summary judgment motions proceeded on a limited record.

The court emphasized the flexibility of judges in case-managed matters and the necessity of a comprehensive record for a just adjudication of limitation period issues.

The Receiver brought a motion to extend the appointment of limited partner advisory committees, approve its activities, and approve a process for appointing Representative Counsel for the Unitholders.

The Ad Hoc Committee of Retail Investors raised concerns about the independence of the proposed appointment process.

The court approved the Receiver's activities and the extension of the committees, but modified the Representative Counsel appointment process to include an independent third party to evaluate proposals and make a recommendation to the court.

The applicants, former directors of PACE Savings & Credit Union, sought a declaration that CUMIS General Insurance Company had a duty to defend them in an action brought by the Financial Services Regulatory Authority (FSRA) as administrator of PACE.

CUMIS denied coverage based on the 'Insured vs. Insured' exclusion in the Directors' and Officers' Liability Policy.

The court held that while the exclusion applied, the 'derivative action' exception restored coverage because the FSRA, acting as a 'person', brought the claim on behalf of the corporation.

The court also ruled that applicants facing fraud claims were entitled to independent counsel due to a conflict of interest, while those facing only negligence claims were not.

The defendant, Hudson's Bay Company (HBC), moved to dismiss the plaintiff David Smith's action for delay and breaches of a trial timetable order in a construction lien reference.

The court found that a motion to dismiss for delay under Rule 27.01(1)(c) was inconsistent with the Construction Lien Act's statutory timelines.

It also determined that the trial timetable order was not peremptory, and Smith's breaches, while not condoned, did not amount to intentional or contumelious conduct warranting dismissal.

The court had already imposed sanctions by barring certain evidence.

The motion to dismiss was denied, and the trial was rescheduled with further directions regarding evidence admissibility.