Roger M. Jaipargas

The Royal Bank of Canada applied for a bankruptcy order against Nuvoola Inc., which the debtor opposed primarily on jurisdictional grounds, arguing its head office had moved to Quebec.

The court analyzed the definition of the "locality of the debtor" under the Bankruptcy and Insolvency Act, finding that the debtor's president, accounting records, and banking activities were centered in Ottawa, and that the debtor had agreed to Ontario jurisdiction in its commitment letters.

The court also determined that the debtor had committed an act of bankruptcy by failing to meet its liabilities generally as they became due.

Consequently, the court granted the application and issued the bankruptcy order, appointing MNP Inc. as the Licensed Insolvency Trustee.

This endorsement addresses motions related to a proposed recapitalization transaction of Xplore Inc. and 16029167 Canada Inc. via a plan of arrangement under the Canada Business Corporations Act (CBCA).

The applicants sought an Interim Order to facilitate a vote on the arrangement, while certain satellite providers (unsecured creditors) brought 'comeback motions' objecting to the preliminary interim order's stay of remedies and the proposed treatment of their contracts, including non-payment of full contractual rates and the use of a reverse vesting order.

The court granted the Interim Order, finding that the applicants met the statutory requirements and acted in good faith, and that the fairness of the arrangement, including the novel reverse vesting order, warranted a full fairness hearing.

The court upheld the stay, finding the non-disclosure by applicants not material and that the court has broad discretion to impose terms on critical suppliers, drawing analogies to CCAA provisions.

The satellite providers' requests for full contractual payments and security were denied, and their motion to lift the stay for a bankruptcy application was adjourned.

Stelco Inc. sought leave to appeal an order from the CCAA supervisory judge concerning the reconveyance of land (the "DGAP Parcel") to LandCo, a precondition for DGAP Investments Ltd. to purchase the land.

Stelco had previously been ordered to specifically perform this obligation but failed to do so.

The motion judge affirmed the court's authority to impose terms for reconveyance if the parties could not agree.

The Court of Appeal dismissed the motion for leave to appeal, finding that the proposed appeal was not prima facie meritorious, given prior judicial determinations and Stelco's previous concession that the court could determine the agreements.

The court also considered the significance of the issues to practice and the action, and the undue hindrance that an appeal would cause to the progress of the CCAA proceeding.

This application sought recognition of US Chapter 11 proceedings for Hornblower Group, Inc. and its affiliates (including Canadian Debtors) under the Companies’ Creditors Arrangement Act (CCAA).

The applicant requested orders declaring Hornblower Group as a foreign representative, recognizing the US proceedings as a foreign main proceeding, granting a stay of proceedings in Canada, recognizing US First Day Orders, appointing an information officer, and granting administration, debtor-in-possession (DIP), and directors' and officers' (D&O) charges.

The court granted all requested relief, finding that the Canadian Debtors' centre of main interests (COMI) was in the US, rebutting the statutory presumption, and emphasizing the importance of comity and coordination in cross-border insolvency.

The applicant, Hornblower Group, Inc., sought an interim stay of proceedings in Canada under Part IV of the CCAA and section 106 of the Courts of Justice Act.

The stay was requested in connection with Chapter 11 proceedings commenced by the applicant and its affiliates in the United States.

The motion was unopposed.

The court found it had jurisdiction to grant the stay, noting it was consistent with principles of comity and cooperation, and granted the interim stay to preserve the value of the Canadian business during the restructuring.

The appellant, Paccar Leasing Company Ltd., appealed a motion judge's order that Royal Bank of Canada's perfected security interest in a debtor's property prevailed over Paccar's unperfected security interest in leased commercial trucks.

Paccar argued that its "true lease" meant it retained title, giving it priority.

The Court of Appeal dismissed the appeal, affirming that the 2007 amendments to the Personal Property Security Act (PPSA) prioritize perfected security interests over common law notions of title, even for true leases, if the lessor fails to perfect their interest.

The Debtors (Ten 4 System Ltd., 1000043321 Ontario Inc., and 1000122550 Ontario Inc.) sought leave to appeal an order appointing a receiver over their assets, pursuant to s. 193(e) of the Bankruptcy and Insolvency Act.

The Royal Bank of Canada, the creditor, opposed the motion.

The court dismissed the motion for leave to appeal, finding that the proposed grounds of appeal lacked prima facie merit, did not raise issues of general importance, and that granting leave would unduly hinder the receivership administration.

Costs were awarded to RBC.

The applicants, senior secured lenders, sought the appointment of a receiver over the assets of "The One" mixed-use construction project due to financial and covenant defaults by the borrower.

The project, significantly delayed and over budget, had outstanding debt of approximately $1.235 billion.

The appointment of Alvarez & Marsal Canada Inc. as receiver was unopposed by any key stakeholder.

The court granted the application, appointed the receiver, approved a super-priority receivership funding credit agreement of up to $315 million, and issued a stay of proceedings, finding it just and convenient to stabilize the situation and maximize recovery for all stakeholders.

Yellow Corporation, as Foreign Representative for itself and its Canadian affiliates (the Canadian Debtors), brought a motion under section 49 of the Companies’ Creditors Arrangement Act (CCAA) to recognize and enforce various orders (U.S. Orders) issued by the United States Bankruptcy Court for the District of Delaware in their Chapter 11 proceedings.

The motion, which was unopposed, sought to preserve the value of the Canadian Debtors and business during the wind-down and sale efforts.

The court granted the motion, finding it necessary for the protection of the debtors' property and creditors' interests, and consistent with principles of comity and public policy.

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.

DGAP Investments Limited brought a motion seeking a declaration that provisions governing shared facilities and reciprocal easement agreements in a reconveyance agreement with Stelco Inc. had been complied with or were unnecessary, or alternatively, for court approval of its proposed easement agreement.

This dispute arose within the ongoing Companies’ Creditors Arrangement Act (CCAA) proceedings involving U.S. Steel Canada Inc. The court dismissed DGAP's motion, rejecting its interpretation that the Reconveyance Date had passed and that easement obligations no longer existed.

The court affirmed its jurisdiction under section 11 of the CCAA to resolve such impasses to ensure the timely completion of the reconveyance.

While acknowledging an impasse, the court declined to impose DGAP's specific easement agreement due to an insufficiently developed record, instead ordering continued negotiations and a future case conference to schedule a motion for a judicial determination of the easement dispute.

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 applicant, BBB Canada Ltd., sought court approval under the Companies' Creditors Arrangement Act (CCAA) for an Omnibus Assignment and Assumption of Leases, FF&E and Trade Fixtures Agreement with DKB Capital.

The motion also requested orders for the assignment of certain leases under section 11.3 of the CCAA and a temporary sealing order for the unredacted agreement.

The court found the marketing process comprehensive, the consideration fair and reasonable, and the agreement beneficial to stakeholders.

The assignments were unopposed.

The court applied the Sherman Estate test for the sealing order and found it appropriate given its limited scope and time.

The motion was granted in its entirety.

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 Receiver sought approval of its activities, fees, and a determination of priority over three leased trucks.

The dispute was between the senior lender, RBC, which held a perfected general security agreement, and Paccar, which leased the trucks to the debtor but failed to perfect its security interest.

Paccar argued that as a 'true' lessor, it retained ownership and was exempt from the enforcement provisions of the Personal Property Security Act.

The court held that the 2007 amendments to the PPSA brought true leases of more than one year into the registration system.

Because Paccar failed to perfect its interest, it was subordinate to RBC's perfected security interest.

The court ordered Paccar to return the truck in its possession to the Receiver.

The applicant brought a motion to enforce personal guarantees executed by the respondents, a husband and wife who were directors of the debtor corporation.

The husband did not oppose the motion.

The wife argued she was released from her guarantee due to an undisclosed material change in the principal amount of the indebtedness, lack of independent legal advice, and that the applicant had released her through its conduct during restructuring negotiations.

The court found that the guarantee explicitly allowed for changes in the amount of obligations, the wife was a sophisticated business owner who did not require independent legal advice, and the applicant had not provided an express written waiver as required by the guarantee.

The motion was granted and both respondents were found liable.

The court-appointed Receiver of Chieftain Metals brought a motion for discharge.

The secured creditor, West Face, supported the discharge but sought a provision allowing it to move for the re-appointment of a receiver at any time in the future to facilitate a potential sale of the mining project.

The Province of British Columbia and the Taku River Tlingit First Nation opposed an open-ended right, citing environmental remediation concerns and uncertainty.

The court granted the discharge but limited the secured creditor's right to seek re-appointment to a two-year period, balancing the commercial interests with the need for certainty for the Province and First Nation.

A judgment creditor brought a motion under s. 50.4(11) of the Bankruptcy and Insolvency Act to terminate the automatic 30‑day stay following the debtor’s notice of intention to make a proposal.

The debtor sought an extension of the stay under s. 50.4(9).

The court found the debtor failed to establish good faith, due diligence, or a likelihood of presenting a viable proposal, providing only vague assertions of possible negotiations while having no active business, revenue, or meaningful assets.

Given the absence of evidence of any realistic restructuring plan and the veto power of the principal creditor, the statutory requirements for an extension were not met.

The court dismissed the debtor’s motion for an extension and granted the creditor’s motion to terminate the stay.

The appellant Superintendent of Financial Services appealed a CCAA judge's order lifting a stay of proceedings and ordering the debtor companies into bankruptcy.

The appellant argued that a deemed trust arose under the Pension Benefits Act upon the wind up of two pension plans during the CCAA proceedings, and that this trust should have priority over secured creditors.

The Court of Appeal dismissed the appeal, holding that the CCAA judge reasonably exercised his discretion to transition the proceedings to bankruptcy under the BIA, where provincial deemed trusts are rendered inoperative by the doctrine of federal paramountcy.