Peter B. Kolla

The applicant creditor sought to allocate a $5 million payment received from the respondent debtor to various outstanding debts, including legal fees and a late information disclosure fee, rather than to a consent judgment.

The court held that the debtor failed to plainly and irrevocably allocate the payment at the time it was made, entitling the creditor to allocate the funds.

However, the court found that the $5,000 per day late disclosure fee was an extravagant and unconscionable penalty, and therefore void.

The court also declined to refer the creditor's legal fees to assessment, finding them reasonable and noting the debtor's failure to review the fee summaries in good faith.

This endorsement grants several orders sought by the Applicants in ongoing Companies' Creditors Arrangement Act (CCAA) proceedings, including approval of the Monitor’s reports and activities, amendment of reporting obligations, addition of Block 6 Holding Inc. as an Applicant, approval of a property sale and related distributions, and the appointment of a mediator to address cost allocation issues among financiers.

The court finds all relief appropriate and supported by the record.

The decision concerns an application under section 192 of the Canada Business Corporations Act (CBCA) for approval of a plan of arrangement by The Cannabist Company Holdings (Canada) Inc. and 16834434 Canada Inc., opposed by Murchinson Ltd. (on behalf of certain noteholders).

The court granted the final order approving the arrangement, which restructures the company’s senior notes, and dismissed Murchinson’s related oppression application.

The reasons address the fairness and reasonableness of the arrangement, the appropriateness of third-party releases, and the standing of Murchinson to bring an oppression claim.

This endorsement addresses an urgent case conference regarding the content of a press release to be issued by Converge Technology Solutions Corp. if an Acquisition Proposal is received and deemed a Superior Proposal.

The court considered whether the press release should include the name of the party submitting the Acquisition Proposal and the proposed share price.

The Ontario Securities Commission (OSC) supported disclosure of both, and the court agreed, finding this approach consistent with previous orders and directions.

This endorsement addresses urgent interim relief in a contested plan of arrangement under the Canada Business Corporations Act involving Converge Technology Solutions Corp. and 16728421 Canada Inc. (HIG).

The dispute arose after Converge received an unsolicited proposal from a third party, leading to motions regarding confidentiality, publication bans, and the process for shareholder notification.

The court continued interim sealing and publication ban orders until the facts crystallize, particularly regarding whether a "Superior Proposal" is received and determined by the board.

The decision applies the Supreme Court’s test for discretionary limits on court openness, balancing the need to protect commercially sensitive information with the principle of open courts.

This endorsement addresses a motion in the context of a proposed arrangement involving Converge Technology Solutions Corp. and 16728421 Canada Inc. (HIG) under section 192 of the Canada Business Corporations Act.

After an unsolicited acquisition proposal and subsequent amendments to the arrangement, the parties resolved the motion on consent, resulting in the dismissal of the motion with prejudice and without costs.

The court also considered and declined a request to continue a sealing order, finding that the justification for confidentiality no longer existed.

The Applicants in a CCAA proceeding sought a Funding Contribution and Turn-Over Order to compel various financiers to contribute to a $40 million wind-down cost, an extension of the stay period, and approval of a Key Employee Retention Plan (KERP).

The court declined the Funding Order and KERP, finding that CCAA section 11.01(b) prohibits compelling new money advances from stakeholders, and that securitization parties are differently situated with assets excluded from the debtor's property.

The court did grant a shorter extension of the stay of proceedings.

In the context of CCAA proceedings, the applicants sought a Funding Order to compel Securitization Parties and other secured lenders to fund a $40 million wind-down of the remaining entities.

The court dismissed the motion for the Funding Order, finding that section 11.01(b) of the CCAA expressly prohibits orders requiring the further advance of money or credit.

Consequently, the court also declined to approve a Key Employee Retention Plan, as it was dependent on the unavailable funding.

The court did, however, grant a temporary sealing order for the KERP details and extended the stay of proceedings to November 29, 2024.

The defendants moved to amend their statement of defence to plead issue estoppel and abuse of process based on a prior US arbitration award, and to dismiss the plaintiff's action on those grounds.

The plaintiff cross-moved to add the defendants' parent company as a party.

The court granted the defendants' motion to amend and dismissed the plaintiff's breach of contract and negligence claims, finding they were barred by issue estoppel as the arbitrator had already decided the core factual issues against the plaintiff.

However, the court refused to dismiss the plaintiff's breach of fiduciary duty claims, finding those issues were not determined in the arbitration.

The plaintiff's motion to add the parent company was dismissed as premature and legally untenable.

Tacora Resources Inc. sought an amended and restated initial order (ARIO) and a solicitation order under the Companies’ Creditors Arrangement Act (CCAA) to facilitate its restructuring, including approval for a $75 million debtor-in-possession (DIP) financing facility from Cargill.

An ad hoc group of senior noteholders (AHG) opposed the Cargill DIP facility, alleging a flawed process and material prejudice, and brought a cross-motion for approval of their own competing DIP proposal.

The court found that Tacora's Board exercised reasonable business judgment in selecting the Cargill DIP facility, which was financially superior and less prejudicial to creditors overall than the AHG's proposal.

The court dismissed the AHG's cross-motion, finding no evidence of improper conduct by Cargill or the Board, and granted Tacora's requested ARIO and Solicitation Order, including approval of the Cargill DIP facility, an extended stay period, a Key Employee Retention Plan (KERP), and a sealing order for KERP details.

The appellants appealed an order dismissing their action for delay under Rule 48.14(7)(a) of the Rules of Civil Procedure.

They argued the Associate Justice erred by failing to consider contextual factors and made palpable and overriding errors regarding their lack of steps taken and the absence of prejudice to the respondents.

The Divisional Court dismissed the appeal, finding no errors in principle or palpable and overriding errors of fact, noting the appellants failed to provide an acceptable explanation for the delay or demonstrate that the respondents would suffer no non-compensable prejudice.

The appellants requested an adjournment on the day of their appeal hearing, citing a last-minute change in counsel.

The court noted that the hearing had been scheduled for months and that the late request wasted court resources.

However, given the breakdown in the solicitor-client relationship and the new counsel's inability to argue the appeal, the court granted a short adjournment.

The new hearing date was made peremptory on the appellants, and they were ordered to pay costs thrown away of $2,500 to each respondent group.

Cineplex and Cineworld entered into an Arrangement Agreement for Cineworld to acquire Cineplex for $2.8 billion.

Following the outbreak of the COVID-19 pandemic and mandated theatre closures, Cineplex deferred payments to landlords and suppliers to manage liquidity.

Cineworld terminated the agreement, alleging Cineplex breached the ordinary course covenant.

The court found that Cineplex's cash management measures were commercially reasonable and did not breach the agreement, noting that the pandemic risk was allocated to Cineworld under the Material Adverse Effect clause.

Cineworld's termination was a repudiation, and Cineplex was awarded $1.24 billion in damages for lost synergies and transaction costs.

The appellant appealed an order directing the sale of a co-owned rental property pursuant to the Partition Act.

The appellant argued the application judge erred by refusing an adjournment, disregarding his right of first refusal under a co-ownership agreement, and providing inadequate reasons.

The Divisional Court dismissed the majority of the appeal, finding no error in the refusal of the adjournment and concluding the right of first refusal did not apply because the parties had already agreed to sell the property.

The appeal was allowed only to correct a minor error in the order regarding the holding of net proceeds in trust.

The Ontario Securities Commission approved a settlement agreement with Coinsquare Ltd. and its executives regarding market manipulation and whistleblower reprisal.

Coinsquare admitted to inflating trading volumes on its crypto asset platform through wash trades and taking reprisals against an internal whistleblower.

The settlement included significant administrative penalties, bans on the executives acting as directors or officers, and requirements for corporate governance improvements.

A case management endorsement setting the procedure for a virtual appeal hearing during the COVID-19 pandemic.

The respondents sought to delay the appeal due to pandemic-related work restrictions and an anticipated motion to adduce fresh evidence.

The court rejected the delay, noting the appeal had been scheduled since January and the fresh evidence motion was simple enough to be prepared within the remaining five weeks.

Directions were given for electronic document filing and video conference protocols.

The appellants brought a motion to stay an order directing the sale of a co-owned rental property pending their appeal.

The court applied the RJR-MacDonald test for a stay.

While finding a serious issue regarding procedural fairness and the application judge's failure to consider the co-ownership agreement, and acknowledging potential irreparable harm regarding capital gains tax, the court concluded the balance of convenience favoured the respondents due to the appellants' delay in pursuing the appeal.

The motion for a stay was dismissed, save for a consent stay on the immediate payout of net proceeds.

Indigenous peoples from Ecuador obtained a US$9.5 billion judgment against Chevron Corporation for environmental devastation caused by oil exploration.

After failing to enforce the judgment in the United States due to findings of fraud by the plaintiffs' counsel, they sought to enforce it in Ontario against Chevron Canada, a seventh-level subsidiary.

The motion judge dismissed the claim, finding that Chevron Canada's shares and assets were not exigible under the Execution Act and that the corporate veil should not be pierced.

The appellants appealed, arguing both that the Execution Act permitted seizure of Chevron Canada's assets and that the corporate veil should be pierced in the interests of justice.

The Court of Appeal dismissed the appeal on the merits but reduced the costs award, recognizing the litigation as public interest litigation.

In a CCAA proceeding, the Monitor appealed a Claims Officer's decision allowing a landlord's claim for liquidated damages under a lease guarantee.

The Monitor argued the Claims Officer failed to consider a lease provision regarding the sale of the property.

The landlord cross-appealed the Claims Officer's finding that it breached a duty to be forthright by failing to disclose the property's foreclosure.

The Superior Court granted the Monitor's appeal, remitting the quantification issue back to the Claims Officer due to an error of law in contractual interpretation.

The court dismissed the landlord's cross-appeal, affirming that creditors owe a duty of forthrightness in a CCAA claims process.

The plaintiff, a Crown corporation, sought to replace its commercial lending software and entered into an agreement with the defendants based on representations that the defendants had an existing, mature 'out of the box' software product.

The implementation failed, and the plaintiff discovered the software did not actually exist but was still in development.

The plaintiff terminated the agreement and sued for fraudulent misrepresentation and breach of contract.

The court found that the defendants knowingly made false representations about the existence and capabilities of their software, which induced the plaintiff to enter the agreement and waste 15 months.

The court awarded the plaintiff over $44 million in damages for incremental costs and lost economic benefits caused by the delay, and dismissed the defendants' counterclaim for unpaid development charges.