Raj S. Sahni

This decision addresses whether Cushman & Wakefield ULC (C&W), as real estate broker, is entitled to a commission in respect of Stelco’s purchase of the Stakeholders’ limited partnership units and other equity in the Legacy Lands LP, under the Companies’ Creditors Arrangement Act proceedings.

The court finds that C&W is not entitled to a commission, as the relevant brokerage agreements had expired or were never executed for the properties in question, and the transaction at issue was not contemplated by the commission provisions.

The court also dismisses C&W’s alternative claim for unjust enrichment.

This decision concerns motions brought by Pride Group Holdings Inc. and related applicants under the Companies' Creditors Arrangement Act (CCAA) for interim relief in their restructuring proceedings.

The court addresses requests for approval of interim distributions, payment of direct costs, application of deferred payments for working capital, and approval of certain activities of the Monitor.

The court grants the requested relief, finding it necessary to maintain liquidity and continue the wind-down process, and holds that the proposed mechanisms are equitable and consistent with the CCAA’s remedial objectives.

The applicants, a group of real estate development entities (Ashcroft Homes Group), sought to extend an initial Companies' Creditors Arrangement Act (CCAA) stay of proceedings to facilitate a restructuring.

Secured creditors, representing 84% of the total secured debt, opposed the extension and instead moved for the appointment of interim receivers.

The court found the applicants' restructuring plan lacked substance, noted a significant loss of confidence in management due to past conduct and outdated property valuations, and determined that the collaborative receivership approach proposed by the majority of secured creditors was more appropriate.

The motion to extend the CCAA stay was dismissed, and the motions for the appointment of receivers were granted.

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.

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.

DGAP Investments Ltd. sought a stay pending leave to appeal an order from the supervising judge in a CCAA proceeding.

The order authorized Stelco Inc. to acquire partnership units in a Land Vehicle, which DGAP argued would obstruct its prior agreement to purchase land from the Land Vehicle.

The Court of Appeal applied the RJR-MacDonald test for a stay, finding that DGAP's case for leave to appeal was weak on the merits, there was no irreparable harm given the supervising judge's measures to protect DGAP's interests, and the balance of convenience favoured dismissing the stay to allow the CCAA proceeding to conclude and benefit aging stakeholders.

The motion for a stay was dismissed, and the leave to appeal motion was expedited.

The Ontario Superior Court of Justice (Commercial List) heard two motions within a long-standing Companies’ Creditors Arrangement Act (CCAA) proceeding concerning U.S. Steel Canada Inc. (now Stelco Inc.).

Stelco Inc. sought approval for a Securities Purchase Agreement (SPA) to acquire the remaining ownership interest in a Land Vehicle from various Stakeholders (employees, retirees, pensioners).

DGAP Investments Ltd., a defendant, brought a cross-motion seeking a strict timetable for the completion of a separate land sale agreement (DGAP Sale Agreement) before the SPA could close, alleging bad faith by Stelco.

The court granted Stelco's motion, finding the SPA beneficial to the Stakeholders by providing immediate monetization and extricating them from ongoing litigation.

DGAP's motion was dismissed, as the court found no evidence of bad faith by Stelco sufficient to delay the SPA, and determined that the SPA and DGAP Sale Agreement were not mutually exclusive.

The court emphasized continued judicial supervision and the Monitor's role in future transactions.

Stelco Inc. sought leave to appeal an order from the Superior Court of Justice requiring it to complete the severance and conveyance of a parcel of land (the "Reconveyance Parcel") to Legacy Lands Limited Partnership's nominee, in accordance with a 2018 reconveyance agreement.

Ernst & Young Inc., as court-appointed Monitor in the U.S. Steel Canada Inc. CCAA proceeding, and DGAP Investments Ltd., a purchaser of the land, opposed the motion.

The Court of Appeal dismissed Stelco's motion for leave to appeal, finding that the motion judge did not err in concluding the CCAA applied, and that the proposed appeal was not prima facie meritorious nor did it raise issues of significance to insolvency practice.

The court upheld the motion judge's discretionary decision to grant specific performance and his finding regarding waiver of MOECC consent.

The Monitor brought a motion within a CCAA proceeding seeking an order directing Stelco to complete a land severance and convey a parcel of land (the Reconveyance Parcel) to LandCo's nominee pursuant to a Reconveyance Agreement.

Stelco opposed, arguing that LandCo missed timelines in the agreement, entitling Stelco to purchase the land instead, and brought a cross-motion.

The dispute arose after Stelco learned the land was to be sold to a developer for a large residential community near its steel plant.

The court found that Stelco breached the Reconveyance Agreement, as the conditions triggering its right to purchase had not occurred.

The court held that LandCo could waive the requirement for environmental consent and ordered specific performance, requiring Stelco to complete the severance and transfer the land.

Third party lenders sought declarations in CCAA proceedings that funds, brokered payday loans, and receivables advanced through the debtor company were their property and not assets of the debtor estate.

The court examined the written broker agreements and the parties’ actual practices, including commingling of funds, guaranteed returns to lenders, and capital protection arrangements that insulated lenders from loan losses.

The evidence showed the lenders received fixed 17.5% returns irrespective of customer loan performance and that all loan proceeds and repayments flowed through the debtor’s general accounts.

The court held that the parties’ conduct varied the broker agreements and created a debtor–creditor relationship rather than a trust or agency relationship.

The lenders’ motions for declarations of ownership were dismissed and the disputed receipts were held to belong beneficially to the debtor.