R. Brendan Bissell

The appellants defaulted on a commercial loan secured by a collateral mortgage.

The respondent lender invoked an acceleration clause to demand the outstanding principal and unaccrued future interest.

The appellants argued the contract did not permit accelerating future interest and that section 17 of the Mortgages Act capped their liability.

The Court of Appeal dismissed the appeal, holding that the contract's plain language included future interest in the accelerated indebtedness.

Furthermore, the Court clarified that section 17 of the Mortgages Act only applies to defaults in the payment of principal occurring after the contractual maturity date, not to defaults during the term of the mortgage.

A commercial loan dispute involving a bus company's default on a $559,250 equipment financing agreement.

The lender sought judgment for the full remaining balance plus interest and enforcement costs after the borrower ceased payments, failed to maintain insurance, and secretly sold the financed bus without notice.

The court determined that the acceleration clause, not the prepayment clause, applied following the borrower's multiple defaults.

The court rejected the borrower's arguments that section 17 of the Mortgages Act or section 8 of the Interest Act capped the lender's recovery, finding these provisions inapplicable to commercial loan agreements.

The court awarded judgment to the lender for the net amount owing after crediting the bus sale proceeds and security deposit.

The applicants, QM GP Inc. and Highpoint Environmental Services Inc., sought an initial order under the Companies' Creditors Arrangement Act and a lien regularization order.

The applicants sought protection to address acute liquidity crisis, interim financing, and relief to stabilize operations.

The court granted the initial order with certain modifications, approving interim debtor-in-possession financing, appointment of a monitor, administration and directors' charges, and a lien regularization order.

The court also granted a temporary stay on performance bond calls and certain indemnity obligations, with the Kingsdale Letter of Credit issue deferred to the comeback hearing.

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.

On an initial CCAA application following an NOI filed two days earlier under the BIA, the court granted relief to permit an insolvent trenchless construction group to continue restructuring as a going concern.

The court held that continuation under the CCAA was consistent with the remedial purposes identified in Century Services, and that an initial stay, extension of the stay to a non-applicant affiliate, temporary protection against calls on performance bonds, DIP financing, administration and directors’ charges, CRO approval, and critical supplier payment authority were all reasonably necessary.

The court also granted a lien regularization order tailored to ongoing construction projects, finding it preserved cash flow while substituting a court-supervised claims process that maintained lien claimants’ substantive rights.

The application was supported by the proposed monitor and senior secured lender, and was not opposed by the surety.

The court was asked to decide between the debtors’ application for protection under the Companies' Creditors Arrangement Act (CCAA) and the Toronto-Dominion Bank’s application for the appointment of a receiver.

After reviewing the facts and arguments, the court concluded that it was most just and convenient to appoint a receiver, dismissing the CCAA application.

The decision reviews the history of the debtors’ restructuring efforts, the positions of the parties, and the legal principles governing the choice between CCAA and receivership, ultimately finding that the interests of the senior secured creditor should prevail in the circumstances.

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 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.

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.

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.

The moving party, a creditor, brought a motion to admit fresh evidence on its appeal from the trustee's disallowance of its proof of claim in a bankruptcy proceeding.

The trustee opposed the motion, arguing that the parties had previously agreed to limit the appeal record and that admitting the evidence would undermine the efficiency of the bankruptcy process.

The court found that no binding agreement precluded the evidence and that refusing to admit the newly discovered documents would result in an injustice to the creditor.

The court exercised its discretion to admit the fresh evidence, allowing the trustee to file responding documentation.

The appellants appealed an approval and vesting order that authorized a receiver to sell a property in receivership.

One of the appellants, a second mortgagee, sought to redeem the first mortgage or be recognized as a successful creditor bidder, arguing an absolute right to redeem under the Mortgages Act.

The Court of Appeal dismissed the appeal, affirming the motions judge's decision that the right to redeem is qualified once a court-approved sales process has been undertaken in a receivership.

The court emphasized balancing the right to redeem against the integrity of the court-supervised sales process, finding no error in the motions judge's conclusion that the sales process was fair and the balance favoured its integrity.

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.

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.

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.