Rachel Nicholson

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.

This supplementary endorsement addresses a request from JTI-Macdonald Corp. regarding the adequacy of notice elements in the Claims Procedure Order within the ongoing Companies' Creditors Arrangement Act (CCAA) proceedings.

The court confirmed its satisfaction that the notice elements in the Claims Procedure Orders are reasonable in the circumstances, addressing an oversight from previous submissions.

The Superior Court of Justice addressed multiple motions within the complex Companies’ Creditors Arrangement Act (CCAA) proceedings of JTI-Macdonald Corp., Imperial Tobacco Canada Limited, Imperial Tobacco Company Limited, and Rothmans, Benson & Hedges Inc. The court granted a stay extension until January 31, 2025, and approved Meeting Orders and Claims Procedure Orders.

These orders facilitate the advancement of comprehensive Plans of Arrangement, developed by the court-appointed Mediator and Monitors, aiming for a Pan-Canadian global settlement of tobacco claims totaling $32.5 billion.

The court found the plans were not "doomed to fail" despite outstanding issues regarding financial allocation among the Tobacco Companies and the creditor status of JTI-Macdonald TM Corp.

The applicants in a CCAA proceeding sought approval for a revised Wind-Down Plan, a Liquidity Contribution Alternative and Turnover Order, a Stay Extension, and a Key Employee Retention Plan (KERP).

The court approved the relief, finding the revised plan addressed previous concerns by allowing secured creditors (Recourse Lenders) the option to pay their pro rata share of the liquidity requirement to retrieve collateral, or for the applicants to sell inventory to fund the wind-down.

The court also found the KERP appropriate and necessary for an efficient wind-down and extended the stay of proceedings.

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.

This endorsement concerns a motion brought by Pride Group Holdings Inc. and its affiliates (the Applicants) under the Companies' Creditors Arrangement Act (CCAA) for approval of a going concern transaction for Pride Group Logistics (PGL), a distinct business line.

The proposed purchasers included principals of the Applicants, leading the Court-appointed Monitor to undertake negotiations and carriage of the motion.

The Monitor, supported by the Applicants, their directors, employees, and some financiers (Daimler, Mitsubishi, Finloc, National Bank), recommended approval, arguing it offered a higher recovery than liquidation, preserved approximately 500 jobs, and avoided significant wind-down costs for the broader Pride Entities.

The transaction was opposed by certain secured lenders, including The Bank of Nova Scotia, The Lending Syndicate, TD Equipment Finance Canada, and RBC entities, who preferred a wind-down.

The court applied the factors under CCAA s. 36(3) and the Soundair Principles, finding the sale process reasonable, fair, and transparent.

The court concluded that the transaction was the only viable going concern option, superior to a wind-down, and consistent with the CCAA's purpose of avoiding social and economic losses from liquidation.

The PGL Going Concern Transaction was approved.

The applicants, Pride Group Holdings Inc. et al., sought several orders under the Companies' Creditors Arrangement Act (CCAA), including a Turn-Over Order for securitized assets, allocation of Monitor's review costs, and approval and vesting orders for two properties (Cornwall and Abbotsford) and a factoring portfolio.

The approval and vesting relief for the properties and factoring portfolio were unopposed.

The Turn-Over Order was resolved through negotiations and presented to the court on consent.

The court-appointed Monitor recommended all sought relief.

The court granted all requested orders, finding them appropriate and within its jurisdiction under section 11 of the CCAA, noting the Monitor's scrutiny and the benefit to stakeholders.

In a CCAA proceeding, the Applicants sought three orders: approval of a factoring portfolio purchase agreement, approval for distribution of proceeds from a property sale, and permission for a creditor to sell certain vehicles.

The court approved the distribution of Chehalis property proceeds to Roynat.

For the Regions vehicles, the court granted the order allowing Regions to take possession, setting a 30-day retrieval period and approving storage costs of $35/day.

The motion for approval of the JD Factors Purchase Agreement was adjourned to a later date, as Mitsubishi HC Capital Canada Inc. objected, claiming ownership of the receivables and requiring more time to prepare its position.

In a Companies' Creditors Arrangement Act (CCAA) proceeding, the applicants sought court approval for the sale of a real property, the Monitor's reports, a revised governance protocol, and a sale and investor solicitation process (SISP) for their logistics business.

The court approved the property sale, finding it met the Soundair Principles despite not being a court-supervised process.

The Monitor's reports and activities were also approved.

The proposed SISP was approved with a minor amendment requiring the Monitor to consult directly affected secured creditors.

The Revised Governance Protocol, which included default commission rates for vehicle sales and collections, was approved as an interim measure, balancing the need for cost recovery with creditor concerns, noting that financiers could negotiate alternative rates or withhold consent to sales.

This endorsement concerns a motion brought by Pride Group Holdings Inc. and other applicants under the Companies' Creditors Arrangement Act (CCAA).

The applicants sought court approval for three main items: a pre-filing agreement of purchase and sale for the Bolingbrook Property, approval of the Monitor's First and Second Reports, and an amendment to the Amended and Restated Initial Order to allow the sale of redundant, surplus, or non-material property up to certain financial thresholds without further court approval.

The court, applying the Soundair Principles, found the pre-filing sale to be in the best interests of stakeholders, noting the extensive negotiations and lack of opposition.

All requested relief was granted, with the court emphasizing the practical benefits of the proposed amendments for maximizing recovery and minimizing professional fees.

The applicants, Pride Group Holdings Inc. et al., sought an amended and restated initial order under the CCAA, including an extension of the stay period, approval of a debtor-in-possession (DIP) facility, elevation of charge priorities, confirmation against set-off, and approval of governance, real estate monetization, and intercompany/unsecured claims preservation protocols.

The court granted the requested stay extension to June 30, 2024, approved the $30 million DIP facility, and approved all proposed protocols.

The court declined to add an exception to the paramountcy provision as requested by certain securitization funders and approved a carve-out for Triumph Business Capital but limited it to CDN $3 million.

The Applicants, Pride Group Holdings Inc. and related entities, sought an initial order under the Companies’ Creditors Arrangement Act (CCAA) due to a severe downturn in the trucking and logistics industry, leading to a liquidity crisis and lender enforcement actions.

The court granted the initial order, which included a stay of proceedings for the Pride Group, its limited partnerships, additional stay parties, and personal guarantors.

The order also approved the appointment of a Monitor and Chief Restructuring Officer (CRO), authorized certain pre-filing and post-filing payments, and granted Administration and Directors' Charges without super priority.

The court addressed the appointment of foreign representatives and a sealing order for the unredacted CRO Engagement Letter, partially granting the sealing request while requiring monthly fees to remain public.

SPay Inc. sought leave to appeal a motion judge's decision not to stay a receiver's motion for judgment in favour of international arbitration.

The motion judge had ruled that the arbitration provisions were inoperative due to Ontario's "single proceeding model" in insolvency cases, finding SPay was not a "stranger to the bankruptcy" because its proposed set-off against Mundo Media Ltd.'s largest account receivable effectively made it a creditor.

The Court of Appeal dismissed the motion for leave to appeal, concluding that the proposed appeal lacked prima facie merit and did not raise issues of general importance.

The court affirmed that insolvency courts have broad discretion to centralize proceedings, and that a party asserting a significant set-off is not a stranger to the insolvency, thus falling under the single proceeding model.

The Receiver brought a motion for court approval of multiple settlement agreements resolving litigation arising from the receivership of Distinct Infrastructure Group Inc., and for a sealing order over the confidential settlement terms.

The court approved the settlements, finding them to be a fair and reasonable commercial resolution.

The court also granted the sealing order, applying the Sherman Estate test and finding that the public interest in promoting settlements and preserving commercially sensitive information outweighed the negative effects on the open court principle.

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 appellant, TS Pharmaceuticals Ltd., appealed the dismissal of its motion for damages against the court-appointed Receiver, A. Farber & Partners Inc. TS alleged the Receiver failed to use "best efforts" to maintain a Health Canada cannabis licence, which lapsed, leading to the termination of a Share Purchase Agreement.

The Court of Appeal upheld the motion judge's finding that the Receiver had no positive obligation or authority to maintain the licence, nor could it have done so in the short timeframe between the SPA execution and licence expiry.

The appeal was dismissed.

This motion, brought by SPay Inc., sought to stay a claim by Mundo Media Ltd.'s court-appointed Receiver, arguing the dispute should proceed via arbitration in New York as per their contracts.

The Receiver claimed SPay owed Mundo $4.1 million, while SPay intended to assert a set-off.

The court declined to follow the British Columbia Court of Appeal's reasoning in Petrowest Corporation v. Peace River Hydro Partners regarding a receiver's ability to disclaim arbitration clauses.

Instead, the court applied the "single proceeding model" in insolvency, finding that SPay was not a "stranger to the bankruptcy" due to the significant receivable and SPay's intention to assert a set-off.

The court held that justice and practicality demanded the claims be resolved within the Ontario receivership proceedings, rendering the arbitration agreement inoperative under Article 8(1) of the UNCITRAL Model Law.

The motion for a stay was dismissed, and costs were awarded to the Receiver.

At a come-back hearing following an initial CCAA order, the applicants sought to extend the stay of proceedings, increase DIP financing, and confer investigative powers on the Monitor.

A party representing the investigatees sought an adjournment regarding the ratification of a general partner and the investigative powers.

The court denied the adjournment, finding that the restructuring depended on the DIP financing which required the investigative powers, and that the investigatees would have opportunities to be heard during the investigation.

The requested relief was granted.