Court File and Parties
Court File No.: CV-15-11169-00CL Date: 2017-06-26 Superior Court of Justice – Ontario Commercial List
Re: IN THE MATTER OF THE COMPANIES’ CREDITORS ARRANGEMENT ACT, R.S.C. 1985, c. C-36, AS AMENDED AND IN THE MATTER OF A PLAN OF COMPROMISE OR ARRANGEMENT OF ESSAR STEEL ALGOMA INC., ESSAR TECH ALGOMA INC., ALGOMA HOLDINGS B.V., ESSAR STEEL ALGOMA (ALBERTA ULC), CANNELTON IRON ORE COMPANY AND ESSAR STEEL ALGOMA INC. USA, Applicants
Before: Hainey J.
Counsel: Lee Nicholson and Sanja Sopic, for the Applicants Susan Ursel and Ashely Schuitema, for the Retirees Lou Brzezinski, for USW 2251 Jeremy Nemers, for City of Sault Ste. Marie Massimo Starnino, for the USW and Local 2724 Peter Griffin and Robert Trenker, for GIP Primus, L.P. and Brightwood Loan Services LLC Andrew Kent, for Cliffs Clifton Prophet and Nicholas Kluge, for the Monitor Michael De Lellis and Shawn Irving, for Certain Term Lenders and DP Lenders Robert Chadwick, for Ad Hoc Committee of Noteholders Tony Reyes, for Essar Steel Algoma Inc. Board of Directors
Heard: June 23, 2017
Endorsement
[1]
Stay Extension
The Applicants move for an order extending the stay period referred to in the Amended and Restated Initial Order dated November 9, 2015 to September 30, 2017.
2The motion is not opposed and the Monitor supports the extension of the stay period to September 30, 2017.
3Algoma’s cash flow demonstrates that no further DIP advances are required to fund operations during the proposed extension period.
[4] During the Stay Period the Applicants intend to: (a) Continue operating in the ordinary course; (b) Attempt to advance negotiations with the Unions, Algoma’s retirees and the Consenting Creditors in order to facilitate a successful going-concern restructuring; (c) Advance negotiations with the Applicants’ other stakeholders; (d) Obtain an extension of the maturity date under the DIP Agreement from the DIP Lenders or secure alternative DIP financing that will allow the Applicants to continue operations in the ordinary course and facilitate continued negotiations between the Applicants’ various stakeholders; and (e) Address any other issues as they arise in the CCAA Proceedings.
5The Court may extend the stay proceedings with respect to debtor companies pursuant to s. 11.02 of the CCAA where circumstances exist that make the order appropriate and the debtor companies have acted and are acting in good faith and with due diligence.
6According to the Applicants, an extension of the Stay Period to September 30, 2017 will provide the stability necessary for them to be able to continue their daily operations and restructuring efforts. They submit that no creditor will suffer any material prejudice if the stay period is extended to September 30, 2017. I accept these submissions.
7I am satisfied that these circumstances make the granting of the stay extension appropriate.
8I am also satisfied that the Applicants have acted and continue to act in good faith and with due diligence.
9The motion is therefore granted and the stay is extended to September 30, 2017 on the terms of the attached order.
[10]
Disclosure of Lender Information
During the argument of the motion, counsel for the Monitor confirmed that it had received from counsel to the DIP Lenders and Term Lenders, a list of participants in the DIP Loan and the Term Loan and their respective individual holdings in each of these loan facilities in accordance with my endorsement dated June 19, 2017.
[11] Mr. Prophet provided me with a copy of his letter to all parties on the Service List that states, in part, as follows: The Lender Information has been provided to the Monitor as of today’s date and reflects holdings of the Term Loan on consummation of all agreed acquisitions pending settlement. Counsel to the DIP Lenders and the Term Lenders has advised the Monitor that the Lender Information is confidential and commercially sensitive; that participants in these loan facilities had a reasonable expectation that their participation would remain confidential; that the DIP Loan credit agreement and the Term Loan credit agreement include confidentiality provisions applicable to the Lender Information and that, among other things, public disclosure of the Lender Information may reveal aspects of the investment strategy and risk profile of individual participants and other information relevant to competition in the financial markets. Counsel to the DIP Lenders and the Term Lenders has confirmed that the Monitor is at liberty to share the Lender Information with any person on the Service List requesting it, subject to entering into a confidentiality agreement in the form attached. The Monitor will provide the Lender Information forthwith upon provision of a confidentiality agreement executed on behalf of a Service List party.
12Mr. Prophet also provided me with a copy of the Confidentiality Agreement which appears to be a standard form confidentiality agreement and is attached to this endorsement.
13I advised all counsel present that I consider the Monitor’s proposed arrangements for the disclosure of the identities and holdings of the Term Loan and DIP Loan participants to be reasonable as a first step. I made it clear, however, that my approval of the Monitor’s disclosure arrangements is subject to any party raising any concerns about it with me in the future.
14I also directed the Monitor to provide the Court with the documentation that sets out the Term Loan and DIP Loan participants and their holdings. This material is to be filed under seal.
Hainey J.
Date: June 26, 2017