Court File and Parties

Court File No.: CV-25-748510-00CL Date: 2025-08-01 Superior Court of Justice – Ontario [Commercial List]

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 QM GP Inc. and Highpoint Environmental Services Inc.

Before: Justice Jana Steele

Counsel:

• Sharon Kour, Brendan Bissell & Natasha Rambaran, for the Applicant
• Denise Bambrough, for Aviva Insurance Company of Canada
• Chris Armstrong & Erik Axell, for the Proposed Monitor Alvarez & Marsal Canada Inc.
• Harvey Chaiton, George Benchetrit & Lee Starr, for the Bank of Nova Scotia
• Andrew Punzo & James MacLellan, for Intact Insurance
• Evan Cobb, for the DIP Lender

Heard: July 29, 2025

Endorsement

Introduction

[1] The applicants, QM GP Inc. ("QM GP") and Highpoint Environmental Services Inc. ("Highpoint") seek an initial order under the Companies' Creditors Arrangement Act, R.S.C. 1985, c. C-36 ("CCAA") and a lien regularization order ("LRO").

[2] The Applicants seek the initial order to give them the stability and breathing space they need, as well as interim financing to address immediate working capital concerns, among other things.

[3] The Initial Order seeks conventional relief sought at an initial CCAA hearing. The applicants ask that the relief cover other entities that are integrated with them. In addition, the Applicants seek an initial stay against calls on performance bonds applicable to continuing projects.

[4] The applicants provided notice to and served draft materials on their senior secured lender, the Bank of Nova Scotia ("BNS"), the proposed DIP Lender, as well as their current and former bonding sureties, Intact Insurance ("Intact"), and Aviva Insurance ("Aviva"). However, due to the confidential nature of the filing, the Company's other stakeholders were not provided with notice of the initial application.

[5] As detailed further below, certain of the relief sought was opposed by BNS and Intact.

[6] The Proposed Monitor supports the relief sought by the applicants and is of the view that the proposed Initial Order and LRO are reasonable, appropriate, and necessary.

[7] Following the hearing, after certain modifications were made to the Initial Order, I released the Initial Order and Lien Regularization Order with reasons to follow.

[8] The Comeback Hearing is scheduled for August 7, 2025, at 9 am.

Background

[9] The applicants, QM GP and Highpoint, are registered Ontario corporations.

[10] QM GP is wholly owned by WeShall Investments Inc. (90%) and 2539593 Ontario Inc. ("253 Ontario") (10%).

[11] QM LP, SMF LP, TWT LP and Quantum Holdings LP (the "Non-Applicant Related Parties") are Manitoba limited partnerships. QM GP is the general partner to each of the Non-Applicant Related Parties.

[12] The Applicants and the Non-Applicant Related Parties are deeply integrated, sharing common ownership, management, and operational ties. The Applicants and Non-Applicant Related Parties are collectively referred to as the "Company". QM LP is the core operating entity of the Company.

[13] The Company provides environmental and industrial services, including demolition and decommissioning, environmental remediation, hazardous material abatement, waste and soil management, and water treatment. The Company operates across Canada, primarily in Ontario, Manitoba, Saskatchewan, Alberta, and British Columbia. The Company's business is operated out of leased premises in each of those provinces.

[14] The Company employs over 400 employees. Its workforce consists of both unionized and non-unionized employees.

[15] The Company is currently working on approximately 250 projects. The Company is reviewing these projects to determine costs, completion status and projected profitability. The Company has already identified seven key projects (the "Big 7 Projects") that are expected to collectively contribute about $37 million of future revenue.

[16] The Company relies heavily on its vendors and third-party service providers, including specialized suppliers for equipment, and other materials that are critical to its business.

[17] The proposed DIP Lender is WeShall Investments Inc. ("WeShall" or the "DIP Lender"). WeShall is also the primary shareholder of the Company.

[18] The Company's senior secured lender is BNS. BNS's aggregate potential exposure is about $34 million. The Company also owes approximately $9 million to various equipment financing companies.

[19] Several of the Company's active projects are bonded by its current surety, Intact, or its prior surety, Aviva. The bonding facilities are governed by agreements and indemnities.

[20] As part of the bonding agreement with Intact, Intact holds a Letter of Credit provided by Kingsdale Partners Limited ("Kingsdale") on behalf of QM in favour of Intact dated June 28, 2024 in the amount of $5 million (the "Kingsdale LOC").

[21] The Company has faced recent financial and operational challenges, including employee turnover, internal financial tracking deficiencies, difficulties obtaining timely change orders for out-of-scope work, bonding difficulties, supply disruptions, and cash flow strain from unreleased project holdbacks.

Analysis

Are the applicants eligible for protection under the CCAA?

[22] I am satisfied that the applicants, QM GP and Highpoint, are debtor companies to which the CCAA applies.

[23] The CCAA applies in respect of "debtor company" or "affiliated debtor companies" with liabilities in excess of $5 million. The definition of "debtor company" in the CCAA refers to a company that is bankrupt or insolvent or has committed an act of bankruptcy within the meaning of the Bankruptcy and Insolvency Act, R.S.C. 1985, c. B-3 (the "BIA"), among other things. The term "insolvent" is not defined in the CCAA. Accordingly, as noted by this court in Laurentian University of Sudbury, 2021 ONSC 659, at paras. 30-31, the court will generally consider whether the company is insolvent within the meaning of the BIA: CCAA, s. 2(1). Under the BIA, a company is insolvent where (a) it is unable to meet its obligations as they generally become due; (b) it has ceased paying current obligations in the ordinary course of business; or (c) its aggregate property is, at fair valuation, insufficient to enable payment of all its obligations due and accruing due: s. 2, BIA.

[24] The Company is insolvent. The Company has consolidated liabilities of approximately $97.8 million and assets of approximately $85.3 million. The Company is also unable to meet its obligations as they become due.

[25] I am also satisfied that Ontario is the appropriate forum for these proceedings, for purposes of section 9(1) of the CCAA. While certain of the Non-Applicant Related Parties are registered or incorporated in Manitoba or Saskatchewan, the Company's overall corporate functions are based in Ontario. The general partner of the Non-Applicant Related Parties has its head office in Burlington. Highpoint is headquartered in Toronto. Further QM LP, which is the primary operating entity, leases and operates several Ontario properties. The majority of the Company's workforce is based in Ontario.

[26] Section 11.001 of the CCAA restricts the relief on an initial application to what is reasonably required to allow the debtor to continue operations in the ordinary course during the Initial Stay Period. As noted by the Applicants, the relief sought at the initial hearing is limited to what is needed to maintain operations, protect assets, and preserve the Company's ability to complete critical projects. The Proposed Monitor also supports the relief sought at the initial hearing.

Should the Court Grant the Requested Stay?

[27] Section 11.02(1) of the CCAA provides that on an initial application, the court may make an order "on any terms that it may impose," effective for no more than 10 days if circumstances exist that make the order appropriate. The Comeback Hearing in this matter has been scheduled for August 7, 2025.

[28] The purpose of the initial stay is to, among other things, give the debtor breathing room and preserve the status quo: Century Services Inc. v. Canada (Attorney General), 2010 SCC 60, [2010] 3 S.C.R. 379, at paras. 14 and 60. As noted by the Supreme Court of Canada in Montréal (City) v. Deloitte Restructuring Inc., 2021 SCC 53, [2021] 3 S.C.R. 736, at para. 46, absent this period of stability "there would be a free-for-all in which individual creditors would fight it out to enforce their rights without regard for the company's survival or the maximization of its liquidation value." The initial stay period is capped at ten days, and the applicant debtor is required to return to court within that time.

[29] I am satisfied that the Company requires the protection of the stay. The Company is facing an acute liquidity crisis. Without the relief sought, including access to the DIP Facility, the Company will have insufficient cash to fund operations or meet payroll obligations, which are due this week. The Company has numerous secured and unsecured creditors, many of which have threatened to or ceased supplying necessary goods and services due to unpaid receivables. The Company risks a collapse of operations, which would, among other things, eliminate the going-concern value of the business and harm the interests of the more than 400 employees, suppliers, and other stakeholders.

[30] I am satisfied that initial stay should be granted.

Should the Protections of the Initial Order extend to the Non-Applicant Related Parties?

[31] The applicants seek to extend the relief to the Non-Applicant Related Parties. As noted above, among other things, QM GP is the general partner to each of the Non-Applicant Related Parties.

[32] Under s. 11 of the CCAA, the court has broad and discretionary authority to make "any order it considers appropriate in the circumstances."

[33] In JTI-Macdonald Corp, Re, 2019 ONSC 1625, at para. 14, citing Re: Tamerlane Ventures Inc. and Pine Point Holding Corp., 2013 ONSC 5461, 6 C.B.R. (6th) 328, at para. 21, the court held that a stay of proceedings may be extended to non-applicant entities where it is "important to the reorganization and restructuring process" and "just and reasonable to do so." At para. 15, the Court in JTI identified the following non-exhaustive list of factors for the court to consider:

a. The business and operations of the third party was significantly intertwined and integrated with those of the debtor company;

b. Extending the stay to the third party would help maintain stability and value during the CCAA process;

c. Not extending the stay to the third party would have a negative impact on the debtor company's ability to restructure, potentially jeopardizing the success of the restructuring and the continuance of the debtor company;

d. If the debtor company is prevented from concluding a successful restructuring with its creditors, the economic harm would be far-reaching and significant;

e. Failure of the restructuring would be even more harmful to customers, suppliers, landlords and other counterparties whose rights would otherwise be stayed under the third party stay;

f. If the restructuring proceedings are successful, the debtor company will continue to operate for the benefit of all of its stakeholders, and its stakeholders will retain all of its remedies in the event of future breaches by the debtor company or breaches that are not related to the released claims; and

g. The balance of convenience favours extending the stay to the third party.

[34] In In the Matter of a Plan of Compromise or Arrangement of Sandvine Corporation et al., 2024 ONSC 6199, at paras. 35-36, the Court extended the full suite of initial Order protections to a limited partnership, noting that the CCAA applies "to debtor companies but not partnerships." Osborne J. further noted that "[w]here the functions and operations of partnerships are integral and closely related to the business and operations of the Applicants, the CCAA Court has the jurisdiction to extend the protection of the stay of proceedings to those partnerships in order to ensure that the purposes of the CCAA can be achieved."

[35] As noted above the applicants and the Non-Applicant Related Parties are deeply integrated, both financially and operationally. The Non-Applicant Related Parties are guarantors under the loan facilities with BNS. They are also indemnitors to the bonding facilities with Aviva and Intact. Certain Non-Applicant Related Parties hold critical licenses, certifications and permits, real property leases, equipment, and other key assets. The evidence is that enforcement actions against the Non-Applicant Related Parties during these proceedings would be detrimental to the Company and its stakeholders. In the instant case, any enforcement step taken against the Non-Applicant Related Parties would pose a direct threat the viability of the restructuring.

[36] The extension of the relief sought in the Initial Order to the Non-Applicant Related Parties is supported by the Proposed Monitor.

[37] I am satisfied that it is appropriate to extend the relief to the Non-Applicant Related Parties for the initial stay period.

Should the Company be authorized to pay pre-filing obligations?

[38] With the consent of the Monitor, the Company seeks authorization to pay amounts owing to the Company's suppliers for critical goods or services that were provided prior to the filing date, if such payment is required to maintain uninterrupted business operations.

[39] Courts have relied on section 11 of the CCAA to authorize pre-filing payments where such payments are integral to the continuation of operations: Re Just Energy Corp., 2021 ONSC 1793 at paras. 92-97. In Cline Mining Corporation (Re), 2014 ONSC 6998, at para. 38, Morawetz R.S.J. (as he then was) set out several considerations for the court, including whether the goods or services are essential to the business; whether uninterrupted supply to the applicants is necessary; whether the Monitor supports the payments; whether payments are made only with the Monitor's consent; the sufficiency of existing inventory held by the applicants; and the likely impact on the applicants' restructuring efforts if the payments are not made.

[40] The evidence is that the Company relies heavily on contractors that provide specialized services. The Company requires these contractors to continue business uninterrupted. Due to the specialized nature of the business, the Company depends on a small group of specialized suppliers who provide essential services that cannot be delayed or easily replaced.

[41] BNS requested that any authorization to pay pre-filing obligations ought to be subject to a cap. Ultimately, BNS and the applicants agreed for the initial order that the aggregate cap on pre-filing obligations would be $500,000 with the consent of the Monitor, and a further maximum aggregate amount of $500,000 with the consent of the Monitor and BNS. The proposed Initial Order was amended to include these caps.

[42] In the circumstances, I am satisfied that it is appropriate that the relief be granted.

Should the Court approve the DIP Agreement and DIP Charge?

[43] The Court has authority under s. 11.2(1) of the CCAA to approve interim debtor-in-possession financing and to grant a corresponding super-priority charge over the debtor's property. The court must be satisfied that the financing is required, having regard to the debtor's cash flow statement, and the terms of the financing are fair, reasonable, and appropriate in the circumstances. Section 11.2(4) of the CCAA sets out a non-exhaustive list of factors to guide the court:

a. The period during which the company is expected to be subject to proceedings under the CCAA;

b. How the company's business and financial affairs are to be managed during the proceedings;

c. Whether the company's management has the confidence of its major creditors;

d. Whether the loan would enhance the prospects of a viable compromise or arrangement being made in respect of the company;

e. The nature and value of the company's property;

f. Whether any creditor would be materially prejudiced as a result of the security or charge; and

g. The Monitor's report, if any.

[44] On the initial application, the court must be satisfied that the terms of the loan are limited to what is reasonably necessary for the continued operation of the debtor company in the ordinary course of business for that period: s. 11.2(5), CCAA.

[45] The Company, with the assistance of the Proposed Monitor, prepared an initial two-week cash flow forecast to determine the immediate funding needs of the Company during the requested in initial stay period. That cash flow forecast demonstrates that the Company is in dire need of interim financing to continue operating during the initial stay period. The applicants initially seek approval of $3.3 million in DIP financing. The need for this initial amount is supported by the cash flow forecast, which demonstrates that about $3 million is required through the initial stay period to cover key operating expenses including payroll.

[46] WeShall, the DIP Lender, is prepared to provide financing to the Company to fund its operational and restructuring expenses during the restructuring period, subject to the conditions in the DIP Term Sheet. The proposed DIP financing represents the only available interim financing for the Company that could be arranged in the time frame to meet the Company's immediate cash flow needs.

[47] The proposed DIP Term Sheet provides for an initial advance of up to $3.3 million. Interest on the DIP loan is at 14% per annum, and there is a 1.5% commitment fee. BNS took issue with certain terms of the DIP Term Sheet, including the proposed fees and interest rate. As noted by the applicants, the DIP loan is a distressed loan and there no other offers. Further, the Monitor filed a comparative analysis on DIP loans and noted that the terms sought in the instant case are "reasonable and within market parameters."

[48] The Proposed Monitor supports the court's approval of the DIP Term Sheet.

[49] The DIP Charge would rank second to the Administration Charge, but in priority to the other charges and security.

[50] BNS argued that it is unreasonable and unnecessary for the DIP Lender's Charge to be given full priority over BNS and requested that BNS not be primed to the extent of certain specific collateral and assets.

[51] I determined that the $3.3 million initial DIP would be approved as requested. Among other things, the DIP Lender required super-priority of the DIP as a condition to making the urgently needed initial advance. Arguments on the priorities of further DIP advances, if approved, may be made at the Comeback Hearing, if necessary.

Should Alvarez & Marsal Canada Inc. be appointed as Monitor?

[52] Under s. 11.7 of the CCAA, the court is required to appoint a monitor when the initial order is made.

[53] The Company seeks the appointment of Alvarez & Marsal Canada Inc. ("A&M" or the "Proposed Monitor") as Monitor. A&M, which is a licensed trustee within the meaning of section 2 of the BIA, has consented to act in such capacity. A&M is not precluded from acting as Monitor because of any restrictions under s. 11.7(2) of the CCAA.

[54] There is no opposition to this relief.

[55] I am satisfied that A&M can be appointed as the Monitor.

Should the Administration Charge be granted?

[56] The Company seeks a first-ranking Administration Charge of up to $400,000 during the initial stay period. The Administration Charge is to secure the professional fees.

[57] There was no opposition raised to this relief.

[58] The Court has authority under s. 11.52(1) of the CCAA to grant a charge over the debtor's property to secure the fees and expenses of the Monitor, its counsel and other key advisors. The Court in Canwest Publishing Inc., 2010 ONSC 222, 63 C.B.R. (5th) 115, at para. 54, identified factors the court may consider when granting an administration charge including the size and complexity of the business being restructured; the role of the professionals involved; the absence of unwarranted duplication of roles; the reasonableness of the proposed quantum; the support of secured creditors; and the endorsement of the Monitor.

[59] In the instant case, the Monitor supports the approval of the proposed charge. The business being restructured is complex. There are multiple integrated entities involved. There are significant financial, legal, and regulatory considerations. The professionals involved will continue to play an essential role in preserving the business' stability and advancing the restructuring.

[60] I am satisfied that it is appropriate for the Court to approve the initial administration charge sought of $400,000.

Should the Directors' Charge be granted?

[61] The Company seeks a Directors' Charge in the amount of $3.6 million to protect the Company's directors and officers against obligations and liabilities they may incur as D&Os after the commencement of these proceedings. The proposed charge would not extend to any obligation or liability that was incurred due to a director or officer's gross negligence or wilful misconduct.

[62] Section 11.51 of the CCAA provides that the Court may make an order declaring that all or part of the debtor's property is subject to a security or charge in favour of any director or officer of the company to indemnify them for liabilities they may incur during the restructuring. As set out in Laurentian University of Sudbury, 2021 ONSC 1098, at para. 81, for the court to grant a D&O charge, the court must be satisfied of the following:

a. Notice has been given to the secured creditors likely to be affected by the charge;

b. The amount of the charge is appropriate;

c. The applicant could not obtain adequate indemnification insurance at a reasonable cost; and

d. The charge does not secure liabilities arising from gross negligence or wilful misconduct.

[63] The Company has directors' and officers' liability insurance ("D&O Insurance") for the directors and officers, covering up to $5 million. However, it is unclear whether all claims for which the D&Os may be personally liable will be covered by the policy given the policy exclusions, among other things. It is also unclear whether the quantum of coverage under the D&O Insurance is sufficient. The Proposed Monitor noted in its Pre-Filing Report its understanding that the Company's directors and officers have advised that they are not willing to continue in their current roles absent the protection of the D&O Charge.

[64] I am satisfied that the requested D&O Charge is reasonable in the circumstances. Among other things, the Proposed Monitor supports the quantum of the proposed charge; the applicants are uncertain whether the existing insurance is sufficient to cover claims made; and the D&O Charge will not extend to any liability resulting from gross negligence or wilful misconduct.

Should the calls on Performance Bonds be temporarily stayed?

[65] The Company seeks a stay of enforcement or calls on the Performance Bonds in respect of the Company's continuing projects, except with the Monitor's consent, or leave of the Court. The Company is not currently aware of any breach or default of any of the Performance Bonds.

[66] The requested stay on the Performance Bonds is intended to provide stability to the Company as it restructures. Any disruption to the Company's continuing projects would be detrimental to the Company's ongoing operations and funding.

[67] The applicants rely on section 11 of the CCAA. In In Re Hudson's Bay Company, 2025 ONSC 1530, at para. 65, the Court was asked to stay the rights of co-tenants of Hudson's Bay to terminate their leases in locations where Hudson's Bay operated. The Court noted that the stay "lies towards the limits of judicial discretion permitted by Section 11 and 11.02 of the CCAA" but granted the relief in the initial period to ensure stability. The applicants note that the considerations around co-tenancy stays differ from calls on performance bonds because performance bonds have a direct impact on the CCAA applicant due to the formal regime governing the flow of funds from construction projects. In Re Earth Boring Co. Ltd., 2025 ONSC 2422, at paras. 43 and 44, I granted a temporary stay on third party rights to call on performance bonds to allow the applicant to engage with counterparties to facilitate the completion of projects.

[68] The Proposed Monitor noted in its Pre-Filing Report that it was of the view that "a stay of the Performance Bonds is reasonable and appropriate in the circumstances as any steps taken in respect of the Performance Bonds would disrupt to the Continuing QM Projects and negatively impact the QM Group's ongoing operations and ability to pursue its restructuring efforts to the detriment of the QM Group and its stakeholders."

[69] I am satisfied that it is appropriate to grant this initial order. As with all initial relief, if there are objections, these can be addressed at the Comeback Hearing next week.

Should the Court grant a stay of any indemnity, guarantee, letter of credit or similar obligation made by WeShall or its related parties in respect of the Company's obligations under its surety arrangements with Intact and Aviva?

[70] The Company's obligations under the surety bonds are indemnified by the Applicants, the Non-Applicant Related Parties and certain third-party entities. For the initial stay period, the Company asks the court to stay Intact and Aviva from taking enforcement steps against the third-party entities that have provided indemnities in respect of the Company's obligations, including WeShall, 253 Ontario, Kingsdale, KSS, Alberta Chain & Rigging Inc., QM Points LP, TS LP, CIPS/QM or CIPS. Among other conditions, the DIP Term Sheet contemplates that, on or before the issuance of an amended and restated Initial Order, Intact shall have returned to Kingsdale, for cancellation, the uncalled Kingsdale LOC.

[71] As noted by the Monitor in the Pre-Filing Report, the DIP terms require, among other conditions, that no person that has issued bonds in respect of the Company or its projects shall have further recourse to Kingdale, the DIP Lender or 253 Ontario. The Pre-Filing Report further indicates that the Company and WeShall intend to engage with Intact in advance of the Comeback hearing to try to satisfy this condition.

[72] The Company is of the view that the stay is needed to protect the status quo and avoid the cascading effect of enforcement upon indemnitors and guarantors. Among other things, the requested stay against these third-party indemnitors is necessary for the Company to access the urgently needed initial DIP financing.

[73] As noted by Black J. in the recent decision of 2675970 Ontario Inc., 2024 ONSC 6174, at para. 46, the court has jurisdiction under section 11 to grant a stay of a guarantee of letter of credit where circumstances warrant.

[74] However, on July 28, 2025, the day before this matter came before me, Intact called on the Kingsdale LOC. BNS informed the court that they had not yet released the funds to Intact. After hearing oral submissions from the parties on this late-breaking issue, I determined that the status quo should be maintained (that is, BNS is to continue to hold the funds) pending the Comeback Hearing, when the court can consider this issue on a more fulsome evidentiary record. At the Comeback Hearing, Intact, the applicants, and BNS may file affidavit evidence, including evidence on the correspondence and discussions leading up to Intact calling the Kingsdale LOC the day prior to the CCAA initial hearing.

[75] With regard to any other letters of credit, I am satisfied that the stay relief should be granted at this initial stage to, among other things, allow the Company to access the initial DIP advance and give interested parties an opportunity to discuss pending the Comeback Hearing.

Should the Court approve the Lien Regularization Order?

[76] The applicants seek a Lien Regularization Order in respect of the projects that are continuing. The LRO is sought to ensure that the Company's cash flow continues uninterrupted without the impact of claims or registrations of liens. The LRO, at the same time, protects the interests of lien claimants. Essentially, the LRO provides for a court-supervised claims process.

[77] As noted by the applicants, the proposed LRO does not extinguish lien rights. Instead, it preserves them within a court-supervised framework, which was summarized by the applicants in their factum as follows:

a. All lien claims against Continuing QM Projects under Construction Lien Legislation will be stayed, and any party wishing to assert lien rights against Continuing QM Projects must comply with the process set out in the LRO;

b. Lien claimants can preserve their rights under Construction Lien Legislation by providing a lien notice to the Proposed Monitor, which grants a Lien Charge equivalent to the lien rights provided for under Construction Lien Legislation;

c. Any party with a lien that was bonded off prior to the granting of the LRO will be deemed to have provided a lien notice to the Proposed Monitor;

d. Each Applicant, with the oversight of the Proposed Monitor, will account for funds received by them on account of the Continuing QM Projects, on a project-by-project basis;

e. Any funds received by the Applicants in respect of Continuing QM Projects will only be paid to satisfy costs, fees and expenses arising in connection with such Continuing QM Projects, subject to the priority charges in this proceeding;

f. Any person who is in possession of holdback funds will be restrained from paying, setting off or encroaching upon the holdback funds, except in accordance with the LRO; and

g. Only Continuing QM Projects are affected by the LRO.

[78] The applicants note that they are engaged in time-sensitive, bonded infrastructure projects across multiple provinces. They submit that if lien registrations and claims were permitted to proceed in the ordinary course, defaults, bond claims, or delays could ensue. There are approximately 300 suppliers, subcontractors and other trades working on continuing projects of the Company that could hold potential lien or trust claims.

[79] The LRO will only apply to the Company's continuing projects, not to any projects that the Company disclaims.

[80] The Court has approved a similar lien regularization process in other CCAA proceedings, involving ongoing constructions projects: Re Earth Boring Co. Ltd., 2025 ONSC 2422, at paras. 81-88. In Mizrahi Commercial (The One) LP et al, 2025 ONSC 2672, at para. 47, the Court allowed lien regularization mechanisms established during receivership to continue under a CCAA proceeding.

[81] The proposed Monitor supports the implementation of the LRO at this initial stage to avoid the filing of any potential lien claims before the Comeback Hearing. I agree that is appropriate to implement the LRO at this initial stage.

[82] I am satisfied that the LRO is necessary and appropriate in the circumstances.

J. Steele J.

Date: August 1, 2025