Court File and Parties
COURT FILE NO.: CV-23-00696271-00CL DATE: 20231024 ONTARIO - SUPERIOR COURT OF JUSTICE – COMMERCIAL LIST
RE: Attorney General of Canada, Applicant AND: Silicon Valley Bank, Respondent
BEFORE: Peter J. Osborne J.
COUNSEL: Michael De Lellis and Karin Sachar, for PwC, Liquidator Kenneth Kraft, for FDIC as US Receiver of SVB and SVBB Susan Ursel, Proposed Employee Representative Counsel
HEARD: October 24, 2023
Endorsement
PricewaterhouseCoopers (“PwC”), as Court-appointed Liquidator in respect of the winding up of the business in Canada of Silicon Valley Bank (“SVB”), moves for an order pursuant to the Winding-up and Restructuring Act, R.S.C. 1985, c. W-11 (“WURA”):
a. approving a Claims Procedure for the identification, quantification resolution of Claims and Employee Claims as against SVB Canada and its current and former directors and officers, including the establishment of necessary bar dates and other requirements;
b. appointing Ursel Phillips Fellows Hopkinson LLP as Employee Representative Counsel to represent the interests of all Employees in the WURA Proceedings; and
c. authorizing the Liquidator to make interim distributions to the United States Federal Deposit Insurance Corporation, in its capacity as Receiver of SVB and the Bridge Bank, pursuant to Chapter 16 of Title 12 of the United States Code, (“FDIC”), as the Liquidator considers appropriate.
PwC relies on the Fifth Report of the Liquidator dated October 17, 2023. Defined terms in this Endorsement have the meaning given to them in my earlier Endorsements made in this proceeding and/or the motion materials, unless otherwise stated.
The relief sought today by the Liquidator is unopposed, and is strongly supported by FDIC as Receiver and by proposed Representative Counsel.
I have not set out all of the background for, and context of, this motion, which is fully described in the motion materials.
The Clearco Transaction closed on August 10, 2023 and the National Bank Transaction closed on August 28, 2023. As a result, the Liquidator has significant funds of USD $494 million.
The Liquidator has developed, in consultation with the FDIC, a proposed Claims Procedure to address the above-noted Claims and Employee Claim. It does not apply to Excluded Claims, which include, among other things, any claim of FDIC and any Claim that was asserted or filed in the receivership proceedings for SVB or Bridge Bank in the United States.
The proposed claims procedure includes what is described in the materials as a “negative notice” process with respect to Employee Claims. That in turn contemplates that the Liquidator will send SVB Canada Employees either a Statutory/Contractual Employee Claims Package which will specify the amount of that claim; or a Common Law Employee Claims Package which will specify the information relating to a Common Law Employee to be used in the calculation of that Claim for the individual in accordance with the methodology sought to be now approved (the “Common Law Employee Claim Methodology”). I observe that a similar process was utilized in the Sears Canada and Nordstrom proceedings with a view to maximizing efficiency.
The Liquidator will send a Claims Package to any Person known to have a potential Claim based on the books and records of SVP Canada; and/or any Person that has requested a Proof of Claim.
Notice of the Claims Procedure will be posted to the Liquidator’s website and published in The Globe and Mail (National Edition) as soon as practicable.
The Liquidator proposes a Claims Bar Date of December 8, 2023; a Restructuring Period Claims Bar Date of the later of December 8, 2023 or the date that is 30 Calendar Days after the date on which the Liquidator sends a Claims Package; a Common Law Employee Claim Information Bar Date on the date that is 30 Calendar Days after the Common Law Claims Package is deemed to have been received in accordance with the proposed CPO; and a proposed Statutory/Contractual Employee Claims Bar Date of 30 Calendar Days after the Statutory/Contractual Employee Claims Package is deemed to have been received in accordance with the CPO.
I am satisfied that the proposed Claims Procedure is fair, efficient, and represents a reasonable process for the filing and determination of Claims, Common Law Employee Claims and Statutory/Contractual Employee Claims against SVB Canada in its current and former directors and officers. It has been tailored to the specific circumstances of these WURA Proceedings.
The proposed Claims Procedure ensures that all Persons receive appropriate notice of the Claims Procedure in the ability to participate and advance claims on an efficient and streamlined yet fair basis.
The proposed Claims Procedure also provides for the appointment of Employee Representative Counsel. Its fees and expenses will be funded by SVB Canada on the basis that such Employee Representative Counsel will contribute to overall cost savings and a streamlining of the WURA Proceedings by serving as a single point of contact between Employees (other than any Opt-Out Individual), the Liquidator and the Court. Employees have the ability to opt out, should they wish to do so.
The appointment of Employee Representative Counsel makes good practical sense in the circumstances for the above reasons, and Ursel Phillips Fellows Hopkinson LLP has significant experience as Representative Counsel and the appointment of that firm is appropriate here.
The authorization for the Liquidator to make interim distributions to FDIC, as receiver of SVB and Bridge Bank in the United States, from any surplus assets in the Canada Branch, is sought pursuant to section 158.1(2) of the WURA.
That also makes good practical sense and is appropriate given that the anticipated quantum of Claims to be filed in the proposed Claims Procedure is less than the total proceeds realized in the WURA Proceedings, and is expected to result in a significant surplus of funds after the resolution of those claims. The interim distributions will not be made until the Liquidator has received all Claims filed and is able to quantify those accepted or disputed.
The Liquidator will retain sufficient reserves of the funds in its possession from any distributions to FDIC to cover the full quantum of filed, proven or disputed Claims, as well as for the anticipated costs of completion of the WURA Proceedings.
For all of these reasons, and considering the provisions of the Winding-Up Order (and in particular paragraphs 7 and 39 thereof) as well as sections 33, 35, 76, 125, 152 and 158.1 of the WURA, the relief sought is appropriate and is approved.
Order to go in the form signed by me today which is effective immediately and without the necessity of issuing and entering.
Osborne J.