Ryan C. Jacobs

The applicant, CURO Group Holdings Corp., sought recognition of its US Chapter 11 bankruptcy proceedings as foreign main proceedings under Part IV of the CCAA.

The court found that the Canadian debtors' centre of main interests was in the US, as executive decision-making and back-office support were located there.

The court granted the Initial Recognition Order, recognized the US Bankruptcy Court's First Day Orders, appointed an Information Officer, and approved an Administration Charge, a Directors and Officers Charge, and Securitization Charges to facilitate the restructuring.

The applicant, CURO Group Holdings Corp., sought foreign recognition and interim stay relief under the Companies’ Creditors Arrangement Act (CCAA) and the Courts of Justice Act (CJA) for its Canadian subsidiaries, CURO Canada Corp. and LendDirect Corp. These Canadian Debtors had simultaneously filed for Chapter 11 bankruptcy in the U.S. Bankruptcy Court.

The court granted the interim stay to protect the Canadian Debtors' assets and business in Canada during the period between the commencement of the U.S. Chapter 11 cases and the anticipated formal recognition orders from the U.S. Bankruptcy Court.

The decision emphasized the necessity of such interim relief to prevent prejudice and uphold principles of cooperation and comity in cross-border insolvency proceedings.

The balance of the application was adjourned for further hearing.

Tacora Resources Inc. sought an amended and restated initial order (ARIO) and a solicitation order under the Companies’ Creditors Arrangement Act (CCAA) to facilitate its restructuring, including approval for a $75 million debtor-in-possession (DIP) financing facility from Cargill.

An ad hoc group of senior noteholders (AHG) opposed the Cargill DIP facility, alleging a flawed process and material prejudice, and brought a cross-motion for approval of their own competing DIP proposal.

The court found that Tacora's Board exercised reasonable business judgment in selecting the Cargill DIP facility, which was financially superior and less prejudicial to creditors overall than the AHG's proposal.

The court dismissed the AHG's cross-motion, finding no evidence of improper conduct by Cargill or the Board, and granted Tacora's requested ARIO and Solicitation Order, including approval of the Cargill DIP facility, an extended stay period, a Key Employee Retention Plan (KERP), and a sealing order for KERP details.

In a CCAA proceeding, the court considered supplementary written submissions regarding the appropriateness of differential consideration offered to unsecured creditors in the proposed Plan.

The court accepted the applicants' submission that the fairness of the differential consideration, which involves providing shares to Term Loan Lenders and cash to General Unsecured Creditors, should be determined at the Sanction Hearing rather than at the Meetings Order stage, given the low threshold for a Meetings Order and the presence of conflicting expert reports.

The Applicants sought an Authorization Order and Meetings Order under the CCAA.

The primary issues in dispute concerned the voting rights and classification of Litigation Claimants, which included uncertified U.S. class actions, a certified Ontario class action, and Texas mass tort claims.

The court held that the Litigation Claimants are creditors entitled to vote, but restricted them to one vote per action to prevent them from overriding other stakeholders on numerosity grounds.

The court also ordered summary proceedings to value their claims rather than accepting the Applicants' proposal to value them at $1.

Finally, the court declined to place the Term Loan Lenders in a separate class from other unsecured creditors, finding sufficient commonality of legal interests.

Following a successful application regarding a restructuring support agreement, the applicants sought full indemnity costs of approximately $1.18 million based on a contractual covenant.

The respondents argued for partial indemnity costs.

The court held that while the contractual provision for full indemnity was an important factor, it did not override the court's discretion to fix an amount that is fair and reasonable.

Finding the hours docketed by the applicants' counsel excessive for a one-issue case, the court awarded a global all-inclusive costs amount of $800,000.

The applicants sought a declaration regarding the interpretation of the 'Outside Date' in a restructuring support agreement.

The respondent, a cannabis company, argued that any extension of the Outside Date required its initiation or consent.

The court found that the plain and ordinary meaning of the agreement allowed the lenders to automatically extend the Outside Date upon their written consent, acting reasonably, without the need for the respondent's consent.

The court granted the declaration sought by the applicants.

Crystallex International Corporation and Tenor Special Situation I, LP sought leave to appeal a motion judge's order that partially dismissed Crystallex's request to seal certain financial information in the Monitor's Thirty-Third Report.

The motion judge had applied the Sierra Club test and found the evidence for sealing speculative.

The Court of Appeal refused leave, finding the proposed appeal was not prima facie meritorious and the case was not of significance to the practice, upholding the motion judge's discretionary order.

Crystallex International Corporation brought a motion for a sealing order to keep confidential certain financial information and strategic details contained in the Monitor's 33rd Report, including cash balance, litigation expenses, sanctions impact, and confidential mediation disputes.

The Ad Hoc Committee of senior noteholders and the Trustee opposed the sealing of financial information, arguing for the importance of disclosure in CCAA proceedings.

The court applied the Sierra Club test, which requires demonstrating a real and substantial risk to an important commercial interest, no reasonable alternative to sealing, and the salutary effects outweighing the deleterious effects on the open-court principle.

The court found Crystallex's evidence, consisting of bald and speculative statements, insufficient to meet this high evidentiary burden, and therefore dismissed the motion for a sealing order.

The applicants, Payless ShoeSource Canada Inc. and Payless ShoeSource Canada GP Inc., sought and were granted an Initial Order under the Companies’ Creditors Arrangement Act (CCAA).

This order included a stay of proceedings, which was extended to Payless ShoeSource Canada LP due to its integral role in the operations.

The court also approved the appointment of FTI Consulting Canada Inc. as Monitor and Ankura Consulting Group LLC as Chief Restructuring Organization (CRO), along with an Administration Charge and a Directors’ Charge.

A cross-border protocol, consistent with the Judicial Insolvency Network (JIN) Guidelines, was also approved to coordinate with concurrent U.S. Chapter 11 proceedings.

A comeback hearing was scheduled to address further matters.

Self-represented long-term disability beneficiaries sought leave to appeal a sanction order from the Superior Court of Justice in the Nortel Networks CCAA proceedings.

The applicants challenged their binding status under the 2009 Representation Order for Disabled Employees and the 2010 Employee Settlement Agreement.

The Court of Appeal dismissed the motion for leave to appeal, finding that the stringent test for leave in CCAA proceedings was not met.

The proposed appeal lacked merit, the applicants were bound by the settlement agreement, and further delays in the protracted litigation were to be avoided.

The court also rejected a late-filed notice of constitutional question challenging sections 6(1) and 11 of the CCAA.

The Nortel group of companies filed for insolvency protection across multiple jurisdictions.

Following the sale of Nortel's assets, approximately $7.3 billion was placed in escrow.

The trial judge ordered that these lockbox funds be allocated on a pro rata basis among the various debtor estates, finding that Nortel operated as a highly integrated multinational enterprise and that the master research and development agreement did not govern allocation upon insolvency.

Several parties sought leave to appeal under the Companies' Creditors Arrangement Act.

The Court of Appeal denied leave, finding that the proposed appeals were not prima facie meritorious, did not raise issues of significance to the practice, and would unduly hinder the progress of the proceedings.

The applicant, Zochem Inc., applied under Part IV of the CCAA for recognition of First Day Orders made by the U.S. Bankruptcy Court in Chapter 11 proceedings.

The court found that the U.S. proceeding was a foreign main proceeding, as the debtors were managed as an integrated group from the United States, despite Zochem's operations being in Ontario.

The court also recognized the interim financing order and granted a super-priority charge for the DIP lender, noting that the interim advance was necessary to meet payroll and that the directors must act in the best interests of the Canadian corporation.

In proceedings under the Companies’ Creditors Arrangement Act, the court addressed scheduling issues for a complex multi‑party trial involving the allocation of assets among creditor groups.

The parties proposed deferring the trial from April 1, 2014 to April 28, 2014, but disagreement remained regarding whether the later date would be feasible.

The court concluded that maintaining the earlier date risked a chaotic trial and that a rolling start date would create further uncertainty.

To ensure certainty and orderly preparation, the court rescheduled the trial to begin May 12, 2014 for 20 days and set case management and trial management conferences.

The court also required all parties to provide comprehensive fee and disbursement summaries to monitor escalating litigation costs.

The EMEA Debtors sought leave to appeal an order approving an Allocation Protocol that provided for a joint trial by the Ontario Superior Court of Justice and the US Bankruptcy Court for the District of Delaware to allocate over US$7 billion in proceeds from the sale of Nortel assets.

The moving parties argued the joint trial violated the Ontario court's independence and that the parties had previously agreed to binding arbitration.

The Court of Appeal dismissed the motion for leave to appeal, finding the proposed appeal lacked prima facie merit as the joint trial did not infringe judicial independence and the relevant agreement did not mandate arbitration.

In CCAA proceedings involving a mining company, competing motions were brought concerning the restructuring process.

The debtor sought directions regarding the procedure for resolving noteholder claims and the alleged misuse of confidential information by certain creditors, while the noteholders sought an order convening a meeting of creditors to vote on their proposed plan of arrangement.

The court held that calling a creditors’ meeting was premature because the proposed plan conflicted with the debtor-in-possession financing facility, had been introduced without meaningful consultation, and unresolved claims and litigation issues could affect voting rights and recoveries.

The court dismissed the noteholders’ motion without prejudice and declined to order disclosure sought by the debtor.

The stay of proceedings was extended to facilitate continued negotiations and mediation.

In Companies’ Creditors Arrangement Act proceedings, the debtor sought approval of short‑term bridge financing pending a larger DIP financing facility.

Competing bridge financing proposals were advanced by an existing lender and by noteholders.

The court approved the debtor’s preferred proposal despite it being more expensive, holding that the board’s decision was protected by the business judgment rule and was supported by the debtor’s financial advisor and the monitor.

A cross‑motion by noteholders seeking revisions to the DIP auction procedures and exemption from signing a non‑disclosure agreement was largely dismissed, though the deadline for qualification as a bidder was briefly extended.