SUPERIOR COURT OF JUSTICE – ONTARIO

(COMMERCIAL LIST)

COURT FILE NO.: CV-11-9499-00CL

DATE: 20130322

IN THE MATTER OF THE BANKRUPTCY AND INSOLVENCY ACT, R.S.C. 1985, c. B-3, AS AMENDED

RE: KENNETH M. KRYS AND EDMUND RAHMING, IN THEIR CAPACITY AS JOINT OFFICIAL LIQUIDATORS, Applicants

AND:

MONTAQUE CAPITAL PARTNERS LIMITED, Respondent

BEFORE: MORAWETZ J.

COUNSEL:
James Renihan, for the Applicants

Alex MacFarlane, E. Patrick Shea and Frank Lamie, for MIS Consulting Inc.

Nigel Campbell and Pamela Huff, for Macquarie Private Wealth Inc.

HEARD: MARCH 22, 2013

ENDORSEMENT

[1] This endorsement addresses, on an interim basis, the interests of competing parties with respect to certain assets that are held by Macquarie Private Wealth Inc. [“MPW”].

[2] A number of parties claim an interest in the assets, estimated to be approximately $4 million.

[3] MPW and associated entities take the position that as a result of a guarantee provided by Montaque Capital Partners Limited [“MCP”], that they are entitled to the assets.

[4] MIS Consulting Inc. [“MIS”], is a customer of MCP and it claims an interest in the assets. Other customers of MCP, also represented by counsel to MIS, join in the position being taken by MIS.

[5] On March 20, 2013, this court heard a motion brought by Ms. Gertrude Bacal. Ms. Bacal is the beneficiary of a trust and she also claims an interest in the assets up to the amount owing to her, which is approximately $776,000.

[6] In addition, it is necessary to consider that the proceedings currently before this court are recognition proceedings in respect of a Foreign Main Proceeding currently before the Supreme Court of the Commonwealth of the Bahamas [Commercial Division]. MCP is the subject of liquidation proceedings in that jurisdiction and the Joint Liquidators Messrs. Kenneth M Krys and Edmund Rahming, are parties to these recognition proceedings.

[7] I have been made aware that a motion is currently scheduled to be heard in the Commonwealth of the Bahamas on March 25, 2013. It appears that one of the issues being brought before the court concerns a claim for fees by the Liquidators of approximately $2 million.

[8] Against this backdrop, certain motions are now pending before this court. MPW has brought a motion to exempt it from any stay of proceedings that may be granted in favour of MCP pursuant to the cross-border insolvency provisions of the Bankruptcy and Insolvency act [“BIA”] and to terminate the interim stay of proceedings dated December 7, 2011 [the “Interim Stay”]. Alternatively, MPW seeks to lift any stay of proceedings that may be granted as against MPW.

[9] MIS has brought a motion seeking to lift the stay of proceedings in favour of MIS for the limited purpose of allowing MIS to [a] commence and pursue a bankruptcy application in respect of MCP, and [b] appoint a trustee in respect of MCP and authorizing such trustee to carry out the administration of the assets of MCP located in Canada in the event MCP is adjudged bankrupt. MIS also seeks to preserve the stay of proceedings in favour of MCP and to direct MPW, or any other person exercising control over the assets referenced above, in order to preserve the assets pending a determination of the issues.

[10] Counsel to the Liquidator advised that the Liquidator does not intend, after disposition of the matters before the court in the Commonwealth of The Bahamas on March 25, 2013, to attempt to access assets being held in this jurisdiction by MPW, in order to satisfy any compensation award that they are granted in the Bahamian Court.

[11] It is clear that there is insufficient time to have these matters argued and disposed of today. The current orders remain in force to ensure that the status quo remains in effect until such time as the pending matters can be argued in full. The parties will schedule court time through the Commercial List Office to have these matters heard as soon as practicable.

[12] I am mindful that the Foreign Main Proceeding is ongoing in the Bahamian court. The purpose of this endorsement is not, in any way, to interfere with the Foreign Main Proceeding. Rather, it is directed to the parties that are involved in the recognition proceedings in this court to ensure that the position of each party is preserved pending argument on the above referenced motions.

MORAWETZ J.

Date: March 22, 2013