COURT FILE NO.: CV-21-00658423-00CL
DATE: 20220623
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
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 ARRANGMENT OF JUST ENERGY GROUP INC., JUST ENERGY CORP., ONTARIO ENERGY COMMODITIES INC., UNIVERSALE ENERGY CORPORATION, JUST ENERGY FINANCE CANDA ULC, HUDSON ENERGY CANADA CORP., JUST MANAGEMENT CORP., JUST ENERGY FINANCE HOLDING INC., 11929747 CANADA INC., 12175592 CANADA INC., JE SERVICES HOLDCO I INC., JE SERVICES HOLDCO II INC., 8704104 CANADA INC., JUST ENERGY ADVANCED SOLUTIONS CORP., JUST ENERGY (U.S.) CORP., JUST ENERGY ILLINOIS CORP., JUST ENERGY INDIANA CORP., JUST ENERGY MASSACHUSETTS CORP., JUST ENERGY NEW YORK CORP., JUST ENERGY TEXAS I CORP., JUST ENERGY, LLC, JUST ENERGY PENNSYLVANIA CORP., JUST ENERGY MICHIGAN CORP., JUST ENERGY SOLUTIONS INC., HUDSON ENERGY SERVICES LLC, HUDSON ENERGY CORP., INTERACTIVE ENERGY GROUP LLC , HUDSON PARENT HOLDINGS LLC, DRAG MARKETING LLS, JUST ENERGY ADVANCED SOLUTIONS LLC, FULCRUM RETAIL ENERGY LLC, FULCRUM RETAIL HOLDINGS LLC, TARA ENERGY, LLC, JUST ENERGY MARKETING CORP., JUST ENERGY CONNECTICUT CORP., JUST ENERGY LIMITED, JUST SOLAR HOLDINGS CORP. and JUST ENERGY (FINANCE) HUNGARY ZRT.
Applicants
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MORGAN STANLEY CAPITAL GROUP INC.
Respondents
Jeremy Dacks, Shawn Irving, Marc Wasserman and Michael De Lellis, for the Applicants, the Just Energy Group
Allyson Smith, U.S. Counsel to the Just Energy Group
Ryan Jacobs, Alan Merskey, Jane Dietrich and John M. Picone, Canadian Counsel to LVS III SPE XV LP, TOCU XVII LLC, HVS XVI LLC, and OC II LVS XIV LP in their capacity as the DIP Lenders
David Botter, Sarah Schultz and Abid Quereshi, US Counsel to LVS III SPE XV LP, TOCU XVII LLC, HVS XVI LLC, and OC II LVS XIV LP in their capacity as the DIP Lenders
Heather Meredith, James Gage and Natasha Rambaran, Canadian Counsel to the Agent and the Credit Facility Lenders
Jeff Larry, Max Starnino and Danielle Glatt, Counsel to US Counsel for Fira Donin and Inna Golovan, in their capacity as proposed class representatives in Donin et al. v. Just Energy Group Inc. et al.; Counsel to US Counsel for Trevor Jordet, in his capacity as proposed class representative in Jordet v. Just Energy Solutions Inc.
Steven Wittels and Susan Russell, US Counsel for the Respondent Fira Donin and Inna Golovan, in their capacity as proposed class representatives in Donin et al. v. Just Energy Group Inc. et al.; US Counsel for Trevor Jordet, in his capacity as proposed class representative in Jordet v. Just Energy Solutions Inc.
David Rosenfeld and James Harnum, for Haidar Omarali in his capacity as Representative Plaintiff in Omarali v. Just Energy
Howard Gorman, Ryan Manns and Aaron Stephenson, for Shell Energy North American (Canada) Inc. and Shell Energy North America (US)
Mike Weinczok, for Computershare Trust Company of Canada
Jessica MacKinnon, for Macquarie Energy LLC and Macquarie Energy Canada Ltd.
Bevan Brooksbank, for Chubb Insurance Co of Canada
Jason Wadden, for Dundon Advisers LLC
Pat Corney, for the Ontario Energy Board
Virginia Gauthier, for NextEra Energy Marketing, LLC
Harvey Chaiton, for Pariveda Solutions, Inc.
Alexandra McCawley, for FortisBC Energy Inc.
Chris Burr, for Energy Earth, LLC
Robert Thornton, Rebecca Kennedy, Rachel Nicholson and Puya Fesharaki, for FTI Consulting Canada Inc., as Monitor
John F. Higgins and Emily Nasir, U.S. Counsel to FTI Consulting Canada Inc., as Monitor
HEARD: June 7, 2022
ENDORSEMENT
McEwen J.
[1] On June 10, 2022 I released a brief endorsement setting out certain orders and requesting supplementary written submissions (the “written submissions”) concerning the appropriateness of the terms of the proposed differential consideration being offered to unsecured creditors in the Plan. I specifically asked that submissions address the rationale for providing New Common Shares to the unsecured Term Loan Lenders and cash consideration to the General Unsecured Creditor Class.
[2] This endorsement deals with those written submissions.
[3] Having read the written submissions I accept the Applicants’ submissions, which are supported by the DIP Lender, that the appropriateness of the terms of the proposed differential compensation ought to be dealt with at the Sanction Hearing.
[4] A material condition precedent to the proposed Plan is that Just Energy cease to be a reporting issuer under the U.S. Exchange Act after it emerges from CCAA. In order to do so, Just Energy must meet certain mandatory requirements to cease being a reporting issuer. The current structure of the Plan contemplates that only the Term Loan Lenders receive the New Common Shares. If there is also a distribution to the General Unsecured Creditors Class, the Applicants and DIP Lender submit that these requirements would be impossible to meet.
[5] They also submit that it is also not possible to give the Term Loan Lenders cash instead of New Common Shares because there is insufficient cash available.
[6] It also bears noting that experts retained by the Applicants and U.S. Class Counsel have delivered conflicting reports as to fairness of the proposed differential consideration. To date there have been no cross-examinations of the experts.
[7] As noted in my previous decision, the threshold for granting a Meetings Order is rather low. Given the complicated nature of the proposed differential consideration and the conflicting experts’ reports, it is preferrable to wait until the Sanction Hearing to determine the fairness of this portion of the Plan. Accordingly, I do not accept the Litigation Claimants’ submission that is clear that the Plan cannot be sanctioned and is doomed to fail.
McEwen, J.
Released: June 23, 2022
COURT FILE NO.: CV-21-00658423-00CL
DATE: 20220623
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
IN THE MATTER OF THE COMPANIES’ CREDTORS ARRANGEMENT ACT, R.S.C. 1985, c. C-36, AS AMENDED
– and –
IN THE MATTER OF A PLAN OF COMPROMISE OR ARRANGMENT OF JUST ENERGY GROUP INC., JUST ENERGY CORP., ONTARIO ENERGY COMMODITIES INC., UNIVERSALE ENERGY CORPORATION, JUST ENERGY FINANCE CANDA ULC, HUDSON ENERGY CANADA CORP., JUST MANAGEMENT CORP., JUST ENERGY FINANCE HOLDING INC., 11929747 CANADA INC., 12175592 CANADA INC., JE SERVICES HOLDCO I INC., JE SERVICES HOLDCO II INC., 8704104 CANADA INC., JUST ENERGY ADVANCED SOLUTIONS CORP., JUST ENERGY (U.S.) CORP., JUST ENERGY ILLINOIS CORP., JUST ENERGY INDIANA CORP., JUST ENERGY MASSACHUSETTS CORP., JUST ENERGY NEW YORK CORP., JUST ENERGY TEXAS I CORP., JUST ENERGY, LLC, JUST ENERGY PENNSYLVANIA CORP., JUST ENERGY MICHIGAN CORP., JUST ENERGY SOLUTIONS INC., HUDSON ENERGY SERVICES LLC, HUDSON ENERGY CORP., INTERACTIVE ENERGY GROUP LLC , HUDSON PARENT HOLDINGS LLC, DRAG MARKETING LLS, JUST ENERGY ADVANCED SOLUTIONS LLC, FULCRUM RETAIL ENERGY LLC, FULCRUM RETAIL HOLDINGS LLC, TARA ENERGY, LLC, JUST ENERGY MARKETING CORP., JUST ENERGY CONNECTICUT CORP., JUST ENERGY LIMITED, JUST SOLAR HOLDINGS CORP. and JUST ENERGY (FINANCE) HUNGARY ZRT.
Applicants
ENDORSEMENT
Released: June 23, 2022 McEwen J.