Raj Sahni

In the context of CCAA proceedings, the court-appointed Monitor sought a Mareva injunction against a former executive, his company, and his spouse.

The Monitor alleged that the executive had misappropriated millions of dollars from the insolvent companies for personal use, including purchasing a yacht, private jet fractional interests, and real estate, while failing to remit significant taxes.

The court found a strong prima facie case of fraud and breach of fiduciary duty against the executive and his company, and inferred a real risk of asset dissipation given their ties to St. Lucia.

An uncapped Mareva injunction was granted against them.

However, the court found insufficient evidence of actual knowledge to establish a strong prima facie case of knowing assistance or receipt against the spouse, and instead ordered her to provide a statement of worldwide assets.

The applicants, comprising a wholesale fuel supplier servicing First Nations communities, sought initial protection under the CCAA due to a looming liquidity crisis precipitated by alleged executive misconduct and missing financial records.

The court granted the initial order, including a stay of proceedings extending to regulatory authorities to prevent the revocation of essential fuel licenses.

The court also appointed KPMG as Monitor with enhanced investigatory powers, approved administration and D&O charges, authorized payment of critical pre-filing expenses, and granted a sealing order over a confidential affidavit to respect comity with a foreign court order.

The applicants, affiliated companies in the oil and gas sector, sought approval of a reverse vesting order (RVO) under the Companies' Creditors Arrangement Act.

The RVO was opposed by several municipalities because it would extinguish significant outstanding municipal tax liabilities.

The court approved the RVO, finding that it met the requirements of section 36 of the CCAA and the Soundair principles.

The court concluded that the RVO was the only commercially viable alternative to a bankruptcy, which would have disastrous consequences for all stakeholders and leave no funds for environmental obligations or municipal taxes.