Court File and Parties

COURT FILE NO.: BK-23-02986886-0031 DATE: 20231013

ONTARIO - SUPERIOR COURT OF JUSTICE – COMMERCIAL LIST

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

AND IN THE MATTER OF THE PROPOSAL OF METROLAND MEDIA GROUP LTD. OF THE CITY OF TORONTO, IN THE PROVINCE OF ONTARIO

RE: Metroland Media Group Ltd.

BEFORE: Peter J. Osborne J.

COUNSEL: Andrew Hatnay, Martin Ejidra and Abir Shamim, for John Willems, Proposed Representative of non-unionized Metroland Employees Steven Graff and Samantha Hans, for Metroland Media Group Ltd. Jonathan Krieger, for the Proposal Trustee (Grant Thornton)

HEARD: October 13, 2023

Endorsement

[1] Following the hearing of this motion on October 13, 2023, I granted the motion with reasons to follow. These are those reasons.

[2] Mr. John Willems brings this motion for an order appointing Koskie Minsky LLP as Representative Counsel, and an order that he be appointed as Non-Union Employee Representative, pursuant to section 126(2) of the Bankruptcy and Insolvency Act, R.S.C. 1985, c.B-3 (the “BIA”).

[3] If appointed, Representative Counsel would represent all non-unionized individuals who were employed by Metroland Media Group Ltd. (“Metroland”) on or about September 15, 2023 and who are owed deferred salary payments under the Metroland Voluntary Departure Program or any other arrangements as of September 15, 2023, and who are not represented by Unifor, Local 87-M (the “Non-Union Employees”) in this proceeding, including for the purpose of administering a settlement in respect of the claims of the Non-Union Employees.

[4] Corollary relief is also sought in the form of an order:

a. permitting the appointment of three to five additional Non-Union Employees to form an ad hoc committee to represent, fairly and diligently, the interests of Non-Union Employees;

b. establishing the terms of the mandate of Representative Counsel;

c. confirming that Representative Counsel may rely upon instructions and directions from the Committee and/or the Non-Union Employee Representative;

d. confirming that the Non-Union Employee Representative and Representative Counsel shall represent Non-Union Employees on a collective basis and not individually and that all Non-Union Employees shall be bound by the actions of the Non-Union Employee Representative and Representative Counsel;

e. declaring that any Claim, being any amount owing to a Non-Union Employee which has now arisen or which may arise, including but not limited to employment claims (inclusive of vacation pay and payments under the Wage Earner Protection Program Act, S.C. 2005, c.47 (“WEPPA”), and/or qualify as a secured claim under sections 81.3 and/or 81.4 of the BIA, as applicable);

f. that pursuant to section 7(3)(3)(c) of the Personal Information Protection and Electronic Documents Act, S.C. 2000, c.5, the Proposal Trustee and Metroland are authorized and permitted to disclose personal information of Non-Union Employees to Representative Counsel;

g. declaring that any individual Non-Union Employee who does not wish to be represented by Representative Counsel shall give notice that he or she is opting out and thereafter shall not be bound by the actions of Representative Counsel and authorizing Representative Counsel to send the appropriate notice; and

h. related relief as set out in the Notice of Motion.

[5] Defined terms in this Endorsement have the meaning given to them in the motion materials unless stated otherwise. The Moving Party relies on the Affidavit of John Willems sworn October 12, 2023 together with Exhibits thereto.

[6] The relief sought today is unopposed and is supported by Metroland and the Proposal Trustee.

[7] Metroland is the entity resulting from the amalgamation of Metrospan Community Newspapers and the Inland Publishing Company. It employed approximately 1000 individuals. As part of previous attempts to reduce operating costs, it offered employees a Voluntary Departure Program which provided for a voluntary termination of their employment in exchange for deferred salary payments.

[8] Employees of Metroland received a letter from the Director of Metroland on September 15, 2023 advising that it would file a Notice of Intention to Make a Proposal under the BIA. The latter advised that coincident with this filing, the employment of 605 Metroland employees would be terminated, and that due to the financial circumstances of Metroland, it was and is unable to provide payment of termination pay in lieu of notice.

[9] Of those employees, 104 were union members with Unifor and the balance are non-unionized.

[10] Although employees would receive payment for wages up to the termination date, health benefits would terminate on September 30, 2023, and employees also have amounts owing to them in respect of pension benefits, the above-noted Voluntary Departure Program and other individual employment arrangements.

[11] Accordingly, the Non-Union Employees are significant creditor group that requires representation in this proceeding to prepare and advance Claims which may include applications for payments under WEPPA.

[12] The NOI estimates that the amount owing to all terminated employees (both union and non-union) is approximately $16 million.

[13] This Court has the authority to appoint representatives and representative counsel to terminated employees in insolvency proceedings: section 183(1) of the BIA. Section 126(2) of the BIA expressly contemplates the appointment of a “court-appointed representative” for “workers and others employed by the bankrupt” with respect to preparing a group Proof of Claim for all employees.

[14] Justice (now Chief Justice) Morawetz of this Court has held that Representative Counsel should be appointed to enable vulnerable stakeholders (in that case, employees and retirees) to meaningfully participate in CCAA proceedings that directly affect them: Nortel Networks Corporation (Re), [2009] O.J. No. 2166 at paras. 13 -16.

[15] That approach was followed by this Court in CanWest Publishing Inc. (Re), 2010 ONSC 1328, [2010] O.J. No. 943 at paras. 23-24 (“CanWest”) (and this approach has been followed in subsequent CCAA cases[^1]).

[16] It is preferable that a representation order be issued early in the proceedings for the benefit not only of the directly affected employees and retirees, but indeed for all stakeholders. Such orders are appropriate even where there is a possibility that the individuals in issue may be unsecured creditors whose recovery expectation may prove to be nonexistent and that ultimately, there may be no claims process for them: CanWest at paras. 23 – 24.

[17] Similar representation orders have been made under the BIA: see Foodora Inc., (July 8, 2020) No. BK-31-2641224 (Ont SCJ); The RedPin.com Realty Inc., (September 11, 2008), No. CV-18-59964400CL (Ont SCJ); and Roman Catholic Episcopal Corporation of St. John’s, (February 21, 2022) No. 24092 (NLSC).

[18] Justice Pepall (as she then was) summarized in CanWest the appropriate factors to be considered in a determination of whether a representation order is appropriate:

a. the vulnerability and resources of the group sought to be represented;

b. any benefit of the representation to the debtor company;

c. any social benefit to the companies under protection;

d. the avoidance of multiplicity of legal retainers;

e. the facilitating and administration of the proceeding and efficiencies;

f. the balance of convenience and whether it is fair and just, including to creditors of the estate;

g. whether representative counsel has already been appointed for those who have similar interests to the group seeking the order; and

h. the position of other stakeholders and the [monitor].[^2]

[19] I am satisfied that the CanWest factors apply here and indeed that they have been met in this case.

[20] The Non-Union Employees are located across Ontario. Individually, they have limited means to calculate and advance their rights and entitlements as may relate to their rights including as to severance, benefit and pension entitlements. They are not in the same position as commercial creditors. I am satisfied that they are a vulnerable group of individuals who require group representation.

[21] The scope of the order sought in this case will achieve that. It will provide for, among other things:

a. the appointment of Representative Counsel to determine amounts owing;

b. the organization of the ad hoc committee;

c. coordination with the company and the Proposal Trustee to develop a consistent methodology for the calculation of the claims of all Non-Union Employees;

d. the preparation of a single Proof of Claim to be filed on behalf of Non-Union Employees (except those who may opt out);

e. the streamlining of Non-Union Employees and the administration thereof;

f. assistance with the preparation and filing of WEPPA claims;

g. responding to steps in, and participating in, this proceeding to ensure that the Non-Union Employees’ rights are represented;

h. communicating with the Non-Union Employees; and

i. otherwise representing their interests in this matter.

[22] I am also satisfied that the Debtor, Metroland, and other stakeholders will benefit from the appointment of Representative Counsel as such will contribute to overall cost savings and the streamlining of the Proposal process through the provision of a single point of contact for active and retired Non-Union Employees and consistent representation for employee and retiree claims and issues in this proceeding.

[23] This also furthers the overarching objectives of maximizing access to justice and avoiding a multiplicity of legal retainers, while recognizing the ability of those who wish to opt out, and providing for the mechanism for them to do so.

[24] The balance of convenience clearly favours the granting of the relief sought for the above reasons.

[25] Proposed Representative Counsel has extensive experience representing employees and retirees in insolvency and bankruptcy matters and I am satisfied that the firm is an appropriate Representative Counsel here. No other Representative Counsel already been appointed, in the appointment sought here is supported by the Proposal Trustee as well as the Debtor .

[26] The proposed Non-Union Employee Representative, Mr. Willems, is also appropriate. He resides in the jurisdiction, is a former employee and was an employee for a significant period of time of approximately 32 years from January 11, 1991 until his termination on September 15, 2023.

[27] I am satisfied that the reasonable legal costs of Representative Counsel should be borne by Metroland. Again, and while not determinative, I observe that both Metroland and the Proposal Trustee support this term.

[28] In sum, I am satisfied that the CanWest factors are satisfied here and that there will be significant benefit to the Non-Union Employees as well as the Debtor and all stakeholders if the relief being sought is granted.

[29] Order to go in the form signed by me, which is effective immediately and without the necessity of issuing and entering.

Osborne J.

[^1]: See, for example, Target Canada Co., 2015 ONSC 303, [2015] O.J. No. 247 at paras. 60-61; U.S. Steel Canada Inc., [2014] O.J. No. 5547 at paras. 34-42; Nortel Networks Corp. [2009] O.J. No. 2166 at paras. 13-16; Catalyst Paper Corp., [2012] B.C.J. No. 615; Fraser Papers Inc., [2009] O.J. No. 4278; and Hollinger Canadian Publishing Holdings Co., [2010] O.J. No. 3494 at para. 5.

[^2]: CanWest, at para 21. See also Nortel at paras. 7, 13-15.