R. Brendan Bissell

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 Court of Appeal for Ontario allowed the appeal of RPG Receivables Purchase Group Inc., finding that the bankruptcy judge erred in concluding that payments made by Specialty Chemical Industries Inc. to American Pacific Corporation were not void as preferences under section 95 of the Bankruptcy and Insolvency Act.

The Court held that an insolvent debtor’s intention to continue in business can only rebut the statutory presumption of intent to prefer if there is a reasonable basis to believe that the business continuation will benefit creditors generally.

Here, there was no such reasonable basis, and the payments must be repaid.

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 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 ongoing CCAA proceedings, the applicants and various equipment financiers reached an impasse regarding the wind-down plan and a proposed going-concern sale of the logistics business.

The applicants sought a monetization order, an increase in the administration charge, and lien regularization, which were unopposed and granted by the court to maintain operations.

Due to significant disputes over the sale and liquidation of assets, the court adjourned the contested motions, including several lift-stay motions brought by creditors, and ordered the parties to attend mandatory mediation before a former Commercial List judge.

The court-appointed Receiver of The Lion's Share Group Inc. (LS), a real estate investment company in insolvency, sought an order declaring certain promissory notes as valid charges on real property, requiring their registration, and expanding the receivership to include The Windrose Group Inc. The promissory notes, issued by LS to borrowers, included provisions for registration on title upon default, but the Land Registry Office required a court order.

Objecting noteholders requested an adjournment due to short service.

The court granted the Receiver's requests, finding the notes created equitable mortgages and that the matter was urgent due to the risk of asset dissipation.

The court also approved the expansion of the receivership and the Receiver's First Report, while providing a comeback hearing for affected parties to address any prejudice.

Following a successful response to a jurisdiction motion brought by the Proposal Trustee, the party seeking costs sought partial indemnity costs of $40,470.16.

The Proposal Trustee argued the amount was disproportionate and suggested $15,000.

The court found the time spent and hourly rates reasonable, and fixed costs payable by the Proposal Trustee at $40,470.16.

Following a successful motion to approve a proposal to creditors under the Bankruptcy and Insolvency Act, the Proposal Trustee and the debtor sought costs against the sole opposing creditor.

The opposing creditor argued that costs should not be awarded against creditors in insolvency proceedings on policy grounds.

The court rejected this argument, finding that the creditor was not relieved from paying costs after unsuccessfully opposing the motion.

The court awarded partial indemnity costs of $20,000 to the Proposal Trustee and $20,226.44 to the debtor.

The applicant, a secured creditor for an equipment loan, sought the appointment of a receiver over the assets of two related debtor companies: one operating a cannabis facility and the other owning the real estate.

The mortgagees opposed the appointment over the real estate, arguing the applicant had no security interest in it and preferring to sell under power of sale.

The court found it just and convenient under section 101 of the Courts of Justice Act to appoint a receiver over all assets of both entities to prevent fragmented sales, maximize recovery, and maintain a court-supervised process, appointing the receiver nominated by the mortgagees.

Conforti Holdings Limited (CHL) and its Proposal Trustee sought leave to appeal a lower court's dismissal of their motion.

The motion requested an order advising the Proposal Trustee not to adjudicate Moroccanoil Inc.'s proof of claim and CHL's cross-claim, and to lift a stay to allow litigation to continue in New Jersey.

The motion judge denied the request, holding that s. 135(1.1) of the Bankruptcy and Insolvency Act (BIA) required the trustee to determine the claim and that there was no jurisdiction to exempt this function.

Even if there were jurisdiction, the judge found it inappropriate as continuing New Jersey proceedings would not be materially more efficient.

The Court of Appeal dismissed the motion for leave to appeal, finding no prima facie merit, as the motion judge's discretionary decision was unassailable and entitled to deference.

The appellant, a mortgagee, appealed a motion judge's decision that granted priority to construction lien claimants over his registered third mortgage.

The Court of Appeal dismissed the appeal, affirming that the advances made by the mortgagee did not fall within the exceptions of s. 78(2) or s. 78(6) of the Construction Act.

The court held that advances must be "made in respect of" the mortgage and the intention to secure financing must operate prospectively to gain priority over liens.

The decision reinforces the general principle of priority for lien claimants and the onus on mortgagees to clearly fall within statutory exceptions.

The applicant vendor brought a motion for leave to obtain a writ of possession for an industrial property after the respondent purchaser breached a settlement agreement by failing to pay municipal taxes on time.

The respondent cured the breach by paying the tax arrears before the hearing and sought relief from forfeiture.

The court applied the three-part test for relief from forfeiture, noting the applicant's own failure to fulfill environmental remediation obligations under the agreement.

Finding that forfeiture of a multi-million dollar property for a cured tax default would be disproportionate, the court granted relief from forfeiture and dismissed the motion.

The court addressed a dispute between successive trustees in bankruptcy regarding the payment of fees in a no-asset estate.

The former proposal trustee, Dodick Landau Inc., opposed the motion by the substituted trustee, A. Farber & Partners Inc., for approval of its fees and discharge, arguing that Farber was required to pay Dodick Landau's fees under s. 36(2)(e) of the Bankruptcy and Insolvency Act.

The court held that funds received by Farber from a secured creditor's indemnity were not "funds available" to the estate for the purpose of paying the former trustee, as these were third-party funds and not estate assets.

Farber's motion was granted, and Dodick Landau's opposition was dismissed.

The moving party landlord brought a motion within a receivership proceeding seeking an order for the court-appointed receiver to pay $319,016 in occupation rent for the use of a marina.

The court examined whether the receiver's actions, such as changing locks and keeping assets on site, constituted occupation that deprived the landlord of use.

The court found that the receiver did not occupy the premises in the sense necessary to attract liability, noting that the landlord was given a key, found a new tenant, and insisted that third-party boats remain on site.

The motion was dismissed.