Peter J. Osborne

The Applicants sought and were granted several orders in a Companies' Creditors Arrangement Act (CCAA) proceeding, including approval of a Remaining Securitized Assets Order, a sale and vesting order for Dixie Truck Parts Inc. (Ontario and Delaware), an omnibus distribution order, and a sealing order.

The Court found that the sale process was reasonable, the related party transaction safeguards were sufficient, and the proposed orders were fair and reasonable.

The Court also addressed the importance of timely opposition to relief and the need for efficiency and comity in cross-border insolvency proceedings.

This endorsement concerns a motion by FAAN Mortgage Administrators Inc., as Court-appointed Trustee of Building & Development Mortgages Canada Inc. (BDMC), for approval of its 30th and 31st Reports, its fees and disbursements, a sealing order for certain confidential exhibits, and authorization to distribute the Fortress Holdback and Future Fortress Amounts to investors.

The motion was unopposed.

The court approved the Trustee’s activities and fees, granted the sealing order, and authorized the distribution to investors, finding these steps appropriate and necessary to protect investor interests and confidential information.

The court approved a Settlement and Mutual Release Agreement regarding the administration of syndicated mortgage loans and projects affiliated with Fortress Real Developments Inc. The Trustee, FAAN Mortgage Administrators Inc., sought approval to enter into the agreement, direct payment of the settlement, and authorize distribution to investors.

The court found the settlement appropriate, noting no better alternatives existed and that the agreement provided certainty and at least a nominal recovery for investors after significant delay.

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 Body Shop Canada Limited (TBS Canada) brought companion motions in its CCAA proceeding seeking approval of an asset purchase agreement (APA), a sealing order, corporate name change, assignment of material agreements, expansion of the Monitor's powers, a declaration of WEPPA eligibility for terminated employees, and an extension of the stay of proceedings.

A key aspect was seeking declaratory relief regarding franchise disclosure obligations under the Arthur Wishart Act, 2000, to facilitate the APA closing, as the UK Purchaser could not provide a disclosure document within the required timeframe.

The court granted all requested relief, finding the APA transaction beneficial for stakeholders, the sale process reasonable, and the franchise disclosure exemption appropriate given the Purchaser's sophistication and consent, and the critical need to close the transaction to preserve jobs and value.

The Applicants in a CCAA proceeding sought multiple orders, including approval for the sale of various real properties and shares, authorization for distributions to lenders, amendments to a Wind-Down Order to include new recourse lenders and clarify notice, amendments to a Lien Discharge Order to address possessory liens and insurance claims, and amendments to a Factoring Order.

The relief was unopposed and recommended by the Monitor and Chief Restructuring Officer.

The court granted all requested orders, finding that the transactions were in the best interests of stakeholders and that the court had jurisdiction under sections 11 and 36(3) of the CCAA, applying the Soundair Principles.

The Toronto-Dominion Bank (TD) brought a motion under Rule 5.05 to sever certain allegations advanced by Tarion Warranty Corporation (Tarion) into two separate actions.

Tarion, along with Carlo and Dino Taurasi, opposed the motion.

TD argued that Tarion's negligence claim (related to a cheque kiting scheme) and its claim to set aside a settlement agreement as a fraudulent conveyance were discrete and temporally separate.

The court dismissed the motion, finding no undue complexity, delay, or prejudice, and that the claims arose from the same series of transactions with significant factual overlap, promoting the convenient administration of justice and avoiding multiplicity of proceedings.

The Plaintiffs brought a motion to transfer a pending application from the Waterloo Region to the Commercial List in Toronto and consolidate it with an existing action.

The court granted the motion, finding that both proceedings involved an overlapping factual matrix, common transactions, and a significant risk of inconsistent findings if determined separately.

The decision emphasized the principles of avoiding multiplicity of proceedings, preventing inconsistent judicial decisions, preserving scarce judicial resources, and saving costs for the parties.

The court also awarded partial indemnity costs to the Plaintiffs.

The plaintiff, Trustar Underwriting Inc., sought the continuation of previous Norwich relief and new Mareva relief against the defendants, alleging two concurrent schemes of fraud.

The schemes involved the misappropriation of insurance premiums for non-existent policies and the redirection of Trustar funds to the defendant Daniel Moses's personal accounts.

The court found a strong prima facie case of fraud, a serious risk of asset dissipation, and irreparable harm, satisfying the test for a Mareva injunction.

The court granted the Mareva injunction, continued and expanded the Norwich relief, and ordered the plaintiff's former accounting firm to produce relevant client files.

The moving parties (respondents in the bankruptcy applications) sought to stay the bankruptcy applications brought by the responding party bank.

The bank had demanded repayment of personal lines of credit that were used to fund the moving parties' corporate entities, which were under CCAA protection.

The court granted the stay, finding that the bank was acting as a single creditor without special circumstances justifying a bankruptcy order.

Furthermore, the court held that the claims were captured by the broad stay of proceedings issued in the CCAA proceedings.

The Monitor in the CCAA proceedings for Balboa Inc. and related entities sought court approval for two main orders: first, approving Credit Bid Asset Purchase Agreements (APAs), vesting properties in purchasers, and assigning tenant leases; and second, extending the stay period, approving a replacement DIP facility (Viscount DIP Term Sheet), repaying the existing DIP, amending charges, and approving the Monitor's reports, activities, fees, and disbursements.

The motions were unopposed.

The court granted the relief, finding it fair, reasonable, and in the best interests of stakeholders, despite the unfortunate circumstances and hardship expressed by affected lenders.

The court confirmed its jurisdiction under the CCAA and applied relevant principles for asset sales, lease assignments, interim financing, and cost allocation.

The Plaintiffs moved to strike the Defendants' Amended Statement of Defence and Counterclaim for non-compliance with a prior contempt order, which required payment of a fine and costs.

The court found the Defendants' failure to comply was deliberate and their explanations for non-payment were not credible.

Applying the factors from *Falcon Lumber* and principles from *Rana v. Unifund Assurance Company*, the court determined that striking the pleadings was necessary to uphold court orders and ensure the fair administration of justice, given the Defendants' pattern of non-compliance and attempts to renegotiate orders.

Cortland Credit Lending Corporation sought a declaration that Final Bell Holdings International Ltd.'s constructive trust claim against the Applicants (BZAM Ltd. et al.) was subordinate to Cortland's super priority security interest and corresponding DIP Lender's Charge in a Companies' Creditors Arrangement Act (CCAA) proceeding.

Final Bell opposed, arguing for the need to prove its fraudulent misrepresentation claim.

The court granted Cortland's motion, finding Final Bell's constructive trust claim to be an impermissible collateral attack on the court's Amended and Restated Initial Order (ARIO) and an equity claim under the CCAA, which ranks behind all ordinary creditors.

The court emphasized the importance of respecting CCAA orders and the "building block" nature of restructuring proceedings.

The applicants, a first mortgagee, sought a declaration that the priority of construction lien claims against unsold condominium units was limited to the statutory holdback amount, and authorization for the receiver to distribute net sale proceeds to the mortgagee.

Two lien claimants opposed, arguing for full priority based on alleged fraudulent conveyance and the nature of the mortgage advance.

The court found that the Construction Act's priority regime is a complete code, and since the lien claims were not preserved or perfected, nor was written notice provided to the mortgagee before the advance, the mortgage had priority over the liens beyond the statutory holdback.

The court also rejected arguments of fraudulent conveyance and the claim that the funds were not a proper "advance in respect of the mortgage." The motion was granted, allowing the receiver to distribute proceeds to the mortgagee while maintaining a holdback reserve for valid lien claims.

In the context of CCAA proceedings, National Bank of Canada moved to lift the stay of proceedings to appoint a receiver over four real estate properties for which it was the first-ranking mortgage lender.

The applicants and the Monitor opposed the appointment, arguing that the existing sales process under the Real Estate Protocol was functioning well and that appointing a new court officer would add unnecessary costs without significant benefit.

The court dismissed the motion to appoint a receiver, finding it was not just or convenient, but granted a Rent Enforcement Order allowing net rents to be paid to the moving party.

The court also granted a sealing order for the property appraisals to protect the integrity of the ongoing sales process.

Counsel for the Respondents brought a motion to be removed as counsel of record in a proceeding seeking recognition and enforcement of a Zambian judgment.

The Applicants took no position on the removal but requested an order for substituted service by electronic mail on the Respondents and their US counsel for all future documents.

The court granted both the motion for removal of counsel and the request for substituted service, finding it appropriate given the case's history and the need to avoid material delays, especially as Zimbabwe is not a signatory to the Hague Convention.

The borrowers brought a motion within a receivership proceeding to discharge a mortgage on their residential property.

They had paid the mortgage in full to the mortgage broker, First Swiss, who had assigned the mortgage to Olympia Trust Company as a bare trustee for investors.

First Swiss misappropriated the funds and failed to remit them to Olympia.

The court found that First Swiss had actual and apparent authority to act as the agent for Olympia and the beneficial owner, Loucks.

The motion was granted, the mortgage was ordered discharged, and costs were awarded to the borrowers.

The Trustee in Bankruptcy sought an order for the repayment of $20,005.37 from the undischarged bankrupt and her son, representing an overpayment of surplus funds due to an erroneous interest calculation by the Office of the Superintendent in Bankruptcy.

The funds, initially paid to the bankrupt, were subsequently transferred multiple times and were ultimately held in an account controlled by the son.

The court found that the funds were paid under a mistake of fact and that neither the bankrupt nor her son had a legal or equitable right to retain them.

The court granted the Trustee's application, ordering the repayment of the funds.

The defendants, Jonathan Rosenthal and Benjamin Barrett, acting as Estate Trustees of Cyril Hirsch Rosenthal's Estate, brought a motion seeking an order to lift the deemed undertaking rule under Rule 30.1.01(8) for certain documents ("Pervez Productions") disclosed by Paragon Protection Ltd. in this proceeding.

They sought leave to use these documents in a related Estate Proceeding and a pending contempt motion against a former estate trustee, Syed Pervez.

The court granted the motion, finding that the interests of justice outweighed any potential prejudice to Paragon, especially given the close relationship between the proceedings and the fact that the documents were already ordered to be produced and were relevant.

The applicants, Melissa Taurasi and Nelda Taurasi, sought a declaration that a global charge registered by The Toronto-Dominion Bank (TD) on their properties was void, alleging duress, undue influence, lack of consideration, and absence of independent legal advice.

The TD Charge was part of a settlement agreement following a $37 million cheque kiting fraud perpetrated by StateView Homes, a company owned by the applicants' husbands.

The court dismissed the application, finding no undue influence, noting that the applicants had legal representation and received a benefit from the settlement, and that their current position contradicted their separate negligence claims against their former counsel.