The moving party, Foreign Representative of Urbancorp Inc., sought leave to appeal a distribution order from the Supervising Judge in Companies’ Creditors Arrangement Act (CCAA) proceedings.
The order authorized a distribution to King Towns North Inc. (KTNI) related to the sale of "Bridge Geothermal Assets" and the interpretation of a "Transfer Provision" in a lease.
The core issue was whether the Transfer Provision violated the pari passu or anti-deprivation rules, particularly in light of Chandos Construction Ltd. v. Deloitte Restructuring Inc. The Supervising Judge found the provision valid, as it was triggered by a lease transfer, not insolvency, and did not violate the rules.
The Court of Appeal dismissed the motion for leave to appeal, finding no prima facie meritorious issue or error in the Supervising Judge's application of the anti-deprivation rule as clarified in Chandos, and that the appeal would unduly hinder the proceedings.
