Court File and Parties

Court File No.: CV-25-0746471-00CL Date: 2025-09-11 Superior Court of Justice – Ontario (Commercial List)

Re: Bruce Community Futures Development Corporation, Community Futures South Georgian Bay, Saugeen Economic Development Corporation, Community Futures Development Corporation of Wellington-Waterloo, and Huron Business Development Corporation o/a Community Futures Huron

Applicants

And:

Future Health Technologies Inc.

Respondent

Before: Kimmel J.

Counsel:

• Craig Mills & Gina Rhodes, for the Applicants and for the non-party Verge Breakthrough Fund Unit Trust
• Danielle Marks, for the Respondent
• Edmond Lamek & Stephanie Kolla, for 2804476 Ontario Inc.

Heard: September 3, 2025

Endorsement (Receivership Application)

The Application

[1] This application is for the appointment of MNP Ltd. ("MNP") as receiver (the "Receiver") over the Respondent, Future Health Technologies Inc. ("FHT" or the "Debtor"), under section 243 of the Bankruptcy and Insolvency Act, R.S.C. 1985, c. B-3 (the "BIA") and section 101 of the Courts of Justice Act, R.S.O. 1990, c. C.43 (the "CJA"). It was originally returnable on an urgent basis on June 30, 2025. It was first adjourned to July 3, 2025 and then to today for reasons set out in earlier endorsements that have been largely incorporated into this endorsement below, for ease of reference.

[2] Capitalized terms used in this endorsement but not defined shall have the meanings given to them in the affidavits of Barb Fisher sworn on June 27, 2025, July 2, 2025 and August 15, 2025, in support of this application.

The Relationships and Positions of the Parties and Participating Stakeholders

[3] This application is not opposed by the Debtor. It is opposed by 2804476 Ontario Inc. ("280 Ontario"), an independent supplier of critical services to the business carried on by Future Health Services Inc. ("FHS"), a related company to FHT.

[4] FHT and FHS have common directors and officers and each of the applicants has a representative on the FHT/FHS boards of directors. FHS owns all FHT's shares. The applicants own all FHS' shares. The applicants (sometimes referred to as the "CF Entities") are comprised of five local non-profit "community futures" organizations, each of which has advanced funds to FHT in support of its telehealth initiative (referred to as the CPRPM, see paragraph 6). The CF Entities are affiliates of FHT due to the board representation and direct shareholdings in FHS and indirect control of FHT through its sole shareholder FHS. The Debtor's non-opposition to this application is not surprising given these relationships.

[5] FHS offers free tele-home monitoring services to chronically ill patients in rural areas in forty municipalities across Ontario. The service is funded by the various municipalities which are, in turn, funded by the Ministry of Health. This not-for profit business operates under a program known as "Community Paramedicine Remote Patient Monitoring Program" (the "CPRPM"). FHS is the public facing entity that operates the CPRPM. Approximately 1,500 patients living in rural areas with chronic illnesses rely on the CPRPM to receive access to healthcare rather than frequently traveling to hospitals.

[6] FHT provides technology and technical support to FHS. FHT contracted with 280 Ontario for the services it provides pursuant to a Consulting Agreement dated January 1, 2021 (the "Consulting Agreement"). Among other services, 280 Ontario manages and maintains the Remote Patient Monitoring System ("RPMS") which both the applicants and the Debtor say is essential to the operation of the CPRPM. FHT relies on 280 Ontario to manage and maintain the RPMS on a day-to-day basis. Without the RPMS operating smoothly and service requests being attended to in a timely manner, the integrity, reliability, and overall operation of the CPRPM is at risk, which ultimately risks patients' health and safety.

[7] The applicants contend that the appointment of a receiver is essential to bring much needed stability to the RPMS and to ensure the continuation of both the related services to the communities and the patients that it services and the continuity of care provided to chronically ill patients. The continuation of the CPRPM is in both the public interest and in the interests of the applicants, to protect their security in the property and assets of FHT. FHT's only valuable asset is its rights in and to the intellectual property that was used to develop the RPMS (the "IP").

[8] 280 Ontario and FHT are embroiled in ongoing litigation over their respective ownership of, rights in and entitlements to the IP associated with the services that 280 Ontario provides. The IP is essential to the operation of the RPMS and to the continued viability of the CPRPM that the applicants have funded, together with Verge and with the support of the Ministry of Health.

[9] The applicants brought this application because 280 Ontario advised FHT on June 25, 2025, that it would be ceasing to provide its services under the Consulting Agreement with FHT at the end of June – the last day being June 30, 2025 – at 5:00 p.m. (the "Termination Notice").

[10] FHT is funded by loans from the applicants and one other secured lender, Verge Breakthrough Fund Unit Trust ("Verge"). Verge supports this application. The Termination Notice was an event of default under the applicants' loans to FHT. The applicants delivered their notices of default under the BIA on June 27, 2025, and have a contractual right to appoint a receiver upon default. FHT waived the BIA default notice periods (although the notice periods have since expired) and does not oppose the appointment of the Receiver in these circumstances. As of March 31, 2025, the FHT's total indebtedness to the applicants was approximately $1,291,616. When combined with the debt owed to Verge, the total outstanding secured indebtedness is approximately $1.59 million.

[11] In addition to being a supplier of services, 280 Ontario describes itself as an involuntary unsecured creditor of FHT, because of outstanding payables under its Consulting Agreement.

[12] The proposed draft appointment order contains provisions that specifically single out 280 Ontario with respect to certain of the relief sought. While the applicants contend that 280 lacks standing to oppose the application because of its status as a supplier and unsecured creditor, given the centrality of its role in the justification for this application, the stated objective of the applicants in bringing the application to forestall 280 Ontario from acting on its Termination Notice and the specific provisions of the draft receivership order that are directed to 280 Ontario, the court ruled in its July 3, 2025 endorsement that 280 Ontario could make submissions. The application was adjourned to allow it to do so.

Summary of Outcome

[13] 280 Ontario explained in both its written and oral submissions that its opposition is predicated on its assertion that the relationships between the applicants and FHT were designed to harm 280 Ontario. 280 Ontario expressly asserts that:

a. The Applicants' self-serving scheme [is] targeted directly and solely against 280 Ontario through their requested "in-house" receivership appointment.

b. This application is in furtherance of the applicants' scheme to prejudice 280 Ontario and to seize control of the RPMS platform IP (including 280 Ontario's own intellectual property) through the Receiver.

c. This receivership application has been brought for these and other collateral and improper purposes, including to avoid and evade the procedural and evidentiary hurdles that FHT would face if it had to seek an injunction in the Kitchener Applications to prevent 280 Ontario from ceasing to provide its services under the Consulting Agreement pursuant to its Termination Notice.

d. This Receivership application is a tactical step in a scheme and undisclosed capital structure implemented by the CF Entities to insulate themselves and their operating entity, FHS, from the known and foreseeable eventuality that the funding projected and required to develop and operate the CPRPM substantially exceeded the funding that had been secured by the CF Entities for that program, and the real and foreseeable eventuality that no additional funding would be available (as turned out to be the case).

[14] These foundational contentions and assertions made by 280 Ontario in support of its position that it is neither just nor convenient for the receivership order to be granted are, at this stage of the proceedings, just that: contentions and assertions. They depend upon speculation and would require the court to draw inferences about the motives and conduct of the applicants, Verge and the Debtor dating back to the creation of FHT in 2021, which the current evidentiary record does not support. There may be a time and place for some of these assertions to be considered, but raising them without support and suggesting that the court should be concerned that they may later be established is not enough for them to be considered now as a basis for not appointing a receiver. 280 Ontario was granted two adjournments and more than two months in which to create a record to support these contentions and has not done so.

[15] 280 Ontario also suggests that because the secured parties (the CF Entities and Verge) are not-for-profit entities, the security they took for their loans that put them in a priority position relative to FHT's trade debt to 280 Ontario was somehow nefarious. This assertion is made even though the security was publicly registered, entirely discoverable and was only challenged for the first time in response to this receivership application. Conversely, 280 Ontario has not explained why it did not insist upon its own security as a condition of continuing to provide services when payment arrears were accumulating; the fact remains that it did not do so.

[16] Since 280 Ontario's primary grounds for opposing the appointment of the Receiver have not been established, and for the other reasons discussed in this endorsement that demonstrate that it is just and convenient to do so, the requested order appointing the Receiver is granted substantially in the revised form of order that the applicants requested.

The Secured and Unsecured Creditors of the Debtor and FHT's Insolvency

[17] Each of the applicants has made advances to FHT by way of separate, documented loans. Each took security in the form of a general security agreement ("GSA") over the present and future assets of FHT, entered into at the same time as the loan was agreed to.

[18] The GSAs have now all been registered under the Personal Property Security Act (the "PPSA"). Some of the GSAs were registered at the time the loans were funded (dating back to 2021), and others were registered later. The CF Entities have entered into a pari passu agreement that establishes, as between them, that regardless of timing of registration they are all on the same footing in terms of their security.

[19] The loan agreements with the CF Entities contain default provisions that are triggered when the CF Entity/lender considers its outstanding debt to be under secured. One of the remedies upon default is the right to appoint a receiver over FHT.

[20] Verge is a separate organization and does not have any common directors or shareholders with FHT, FHS or the CF Entities. Verge's loan documents contain similar default and remedy provisions. Verge also holds security over FHT's present and future assets that was registered under the PPSA. In addition, Verge has a guarantee from FHS.

[21] As described earlier in this endorsement, the total outstanding amounts owing to these secured creditors exceeds $1.5 million. Even accounting for disputed amounts (e.g. amounts said to exceed the stated permitted loan amounts), collectively they are owed a material secured amount.

[22] 280 Ontario is an unsecured trade creditor of FHT. It claims to be owed more than $1.1 million as of April 1, 2025. It explains that this situation arose because FHT was underfunded from the outset. This led to 280 Ontario becoming an involuntary provider of credit to FHT, and indirectly to FHS and the applicants. For example, 280 Ontario purchased of hardware and equipment for them and then used funds received from FHT for 280 Ontario's past services under the Consulting Agreement to pay the more recent invoices from equipment suppliers to avoid supplier lawsuits against it. Furthermore, 280 Ontario claims that it continued to pay its consultants and employees to maintain the CPRPM even after arrears under the Consulting Agreement began to accumulate in an effort to avoid interruption of its services and the ultimate services FHT and FHS deliver to the users of the RPMS. 280 Ontario claims that it allowed this situation to arise and worsen in reliance upon promises to pay made by the applicants, FHS and FHT.

[23] While the evidentiary record has not been fully developed on this point, 280 Ontario asserts that FHT was insolvent from the outset and was insolvent throughout the entire time that it was doing business with 280 Ontario. What is not clear is the extent to which 280 Ontario was, or ought to have been, aware of the solvency situation, if that was the case. On its own evidence, it appears to have known that the approved budget for funding FHT was less than what its representative had told FHS and the applicants it would cost to develop, maintain and operate the CPRPM and the RPMS that supports it.

[24] For the purposes of this application, all stakeholders acknowledge that FHT is insolvent. Its funding and credit arrangements allowed it to continue in its role of supporting the technology for the CPRPM notwithstanding its insolvency, but the Termination Notice from 280, combined with the ongoing dispute about the ownership, rights in and entitlement to use the IP essential to the RPMS, have threatened FHT's ability to continue to do so.

The Pre-Existing Dispute: Kitchener Proceedings

[25] FHT and 280 Ontario have been embroiled in a dispute and have competing applications pending before this court in Kitchener that, until recently, were scheduled to be heard on October 23, 2025 (the "Kitchener Applications"). That dispute involves, among other things, a disagreement about who owns the IP associated with the services that 280 Ontario provides. The dispute also involves a disagreement about amounts owing by FHT to 280 Ontario. The Kitchener Applications followed an earlier April 18, 2025, default notice that was sent by 280 Ontario, pursuant to which it purported to terminate the Consulting Agreement.

[26] Notwithstanding 280 Ontario's earlier default notice, and in recognition of the importance of the services provided by 280 Ontario to the services that FHT provides to its clients, an interim "status quo" arrangement was put in place while the parties attempted to negotiate a broader resolution of their differences. That status quo arrangement continued even after the Kitchener Applications were commenced in May 2025. It was this status quo arrangement that 280 Ontario was threatening to terminate in its June 25, 2025 Termination Notice.

[27] 280 Ontario's request for an adjournment of this application on July 3, 2025 was granted, in part, to allow for the development of the evidentiary record in the Kitchener Applications that 280 Ontario was suggesting at that time would be relevant to its response to this application. Despite this, no further material was delivered by 280 Ontario in the Kitchener Applications. In the meantime, the timetable for pre-hearing steps in the Kitchener Applications for the October 23, 2025 hearing date has not been fully complied with. In particular, FHT points out that 280 Ontario did not deliver its responding record in the FHT application that was due on August 15, 2025 (nor did it deliver any reply record in its own application upon receipt of FHT's responding record), and 280 Ontario has indicated that it is not prepared to present the witnesses who have sworn the affidavits in support of its application to be cross-examined by the September 19, 2025 timetabled deadline.

[28] Instead, just prior to a scheduled case conference held on August 28, 2025 in the Kitchener Applications, 280 Ontario issued a new action in Kitchener dealing with the same general matters raised in the Kitchener Applications (the "Kitchener Action"), that added new parties including the applicants in this proceeding. At the case conference, 280 Ontario suggested that the court consolidate the Kitchener Applications with the Kitchener Action.

[29] The August 28, 2025 case conference before McArthur J. was adjourned to September 12, 2025, by which time it was expected that the outcome of this receivership application would be known. One aspect of the relief sought is a stay of proceedings that would directly impact the Kitchener Proceedings. This decision is being released today so that it is available in advance of the scheduled case conference in the Kitchener Proceedings tomorrow.

[30] It was noted in August 28 endorsement that various routes were being canvassed and considered in connection with the Kitchener Applications and Kitchener Action (collectively, the "Kitchener Proceedings"), including there being a good possibility of mediation. Other routes being considered included "traditional consolidation and procedure that will take substantial time and costs, or a more summary approach to the proceedings that the parties timetable jointly". The prospect of an early resolution of the IP dispute in the Kitchener Applications in October 2025 is unlikely considering recent developments.

280 Ontario's Adjournment Requests and the Enhanced Status Quo Arrangement

[31] 280 Ontario appeared at the initial return of this receivership application on June 30, 2025 and advised that it intended to oppose it. It argued then (and still argues) that the receivership application is an attempt to do an end run around the Kitchener Applications by granting the receiver access to the disputed IP and granting the receiver the ability to sell it. 280 Ontario further argued at the July 3, 2025 appearance (and still argues) that the related party arrangement between the applicants and the Debtor should result in the recharacterization and/or subordination of the applicants' secured debt to the unsecured debt of 280 Ontario.

[32] While continuing to dispute the premise of the adjournment request, the applicants have made it clear that the Receiver will not be able to share or sell the disputed IP without further court order or agreement and they dispute the attempts to recharacterize their debt as equity.

[33] At the July 3 appearance, as a condition of the adjournment of the application it was seeking, 280 Ontario agreed, notwithstanding its Termination Notice, to continue to provide the services that it had been providing under the status quo arrangement that the parties had been operating under. The applicants and the Debtor have been consistent in their position since this application first came before the court that the status quo arrangement was not satisfactory. They were concerned that it left the Debtor in an unstable and unsustainable situation in terms of the delivery of critical health care services to the rural patients who depend upon the CPRPM and did little more than just "keep the lights on".

[34] At the July 3 hearing, the applicants and FHT provided a list of enhanced services that would be required from 280 Ontario beyond the status quo arrangement, if an adjournment was to be granted. The applicants proposed that FHT would pay $9,100/week to 280 Ontario in exchange for the following:

a. 280 Ontario immediately reinstates the VPN Certificates, ensuring that they are reinstated imminently and will keep the Applicants and FHT updated on any developments. To the extent FHT has not already paid, FHT is willing to pay for the reinstatement of the VPN Certificates upon receipt of payment information from 280 Ontario.

b. 280 Ontario will contact Amazon Web Services and request FHT be granted Administrator Access immediately, or alternatively not object to FHT contacting AWS and requesting Administrator Access. FHT agrees that it does not need to be added as a super administrator at this time;

c. In addition to ensuring there are no crashes or interruptions in the system as set out in sub-paragraph 21(d) below that 280 Ontario has agreed to provide, 280 Ontario must also agree to:

i. complete remote software updates of the Gateway remote monitoring devices as requested by FHT on a timely basis (within 24 hours);

ii. complete minor software requests from paramedics such as Application Programming Interface ("API") access, which is a key that allows the ability for data to be transferred from the paramedic portal to another service provider and updates/additions to paramedics' contact information on a timely basis (within 24 hours);

iii. complete minor equipment data delivery investigation on a timely basis (within 24 hours); and

iv. respond to all reasonable requests from paramedics (sent through FHT) on a timely basis (within 24 hours).

d. 280 Ontario shall immediately return all repaired equipment, and return all new technology including CHIRP and Rogers equipment. This equipment was developed by FHT and belongs to FHT. It is my understanding that this equipment is urgently needed for deployment to patients and paramedics in the RPMS.

[35] 280 agreed to all except two aspects of these terms: first, in (d) above, equipment would only be returned or delivered to FHT upon payment of invoices rendered for repairs or for the cost of purchasing said equipment; second, it did not agree to (b) above because of its contention that even the lesser Administrator Access (as opposed to Super Administrator status) will give the applicants/Debtor access to the IP that is disputed in the Kitchener Applications. That said, it maintained that the underlying goal for this access would be addressed by the services that it agreed would be provided in accordance with (d) below, as part of the continuation of the status quo arrangement it agreed to as a term of the adjournment:

a. FHT shall continue to pay the current $9,100 plus HST per week.

b. 280 will immediately start the process (and is in the process) of renewing the VPN certificates that had expired last week. 280 had previously advised FHT of the expiry of the VPN Certificates last Wednesday. Pending their renewal, 280 can go into AWS to reboot servers and provide minimal support. 280 is currently able to manage crashes now but on a much more limited basis given the expiration of the VPN Certificates.

c. FHT will continue to have all necessary credentials to deal with billing and will be able to see bills and everything else necessary to maintain the status quo. If there is a specific task or reasonable request that FHT has with AWS that requires super-administrator capabilities, 280 will, upon FHT's request, undertake such request or task with AWS on behalf of FHT.

d. Once the VPN certificates are renewed, 280 will continue to provide service to monitor and ensure the system does not crash and fix any critical items as they come up (if any), in particular:

i. monitoring servers and communications for failures or issues related to downtime or crashes

ii. if failures or crashes are detected or 280 is made aware of them, responding with assessing the situation

iii. if failures or crashes are assessed, rectifying the situation if possible

iv. if serious or critical issues arise and are not able to be fixed to advise FHS of the situation and/or suggest solutions

v. if 280 Ontario is contacted by FHS customers/clients, it will direct them to FHS staff. 280 has requested that FHT provide it with the language to use if it is contacted by FHS clients/customers.

[36] It was also agreed that additional services could be requested and paid for by FHT à la carte, in accordance with the past practice of the parties under the Consulting Agreement.

[37] The court granted the adjournment to September 3, 2025 (and beyond, pending the decision on this application) on the basis the above terms (the "Enhanced Status Quo Arrangement") to allow for the continued provision of healthcare services to patients. The court noted at that time that this has been recognized as an important consideration when deciding whether to appoint a receiver: see Vancouver Coastal Health Authority v. Seymour Health Centre Inc., 2023 BCSC 1158, 80 B.C.L.R. (6th) 95, at paras. 74-75. Since the patients' needs could be met through these interim arrangements under the Enhanced Status Quo Arrangement, there was no immediate urgency and the court was prepared to afford 280 Ontario the opportunity to respond to the application as it had asked to do.

Alleged Non-Compliance with the Enhanced Status Quo Arrangement

[38] A lot of the evidence before the court at the return of this application on September 3, 2025 was dedicated to the applicants' accusations that 280 Ontario had not complied with the Enhanced Status Quo Arrangement, and 280 Ontario's retort that it was not able to do so because of a lack of information and co-operation from FHT. It is not necessary for the purposes of the issues to be decided on this application for the court to decide whether either one or both sides have, or have not, complied with it. While the conduct of the parties, including post-application, may be a relevant consideration in the analysis, I do not find either side's conduct under the Enhanced Status Quo Arrangement to rise to a level that would tip the analysis in favour of one side or the other.

Issues and Analysis

The Test for Appointing a Receiver

[39] The court must be satisfied that it is just or convenient to grant the requested order appointing MNP as the Receiver over the Property of the Debtor under s. 243(1) of the BIA and s. 101 of the CJA.

[40] In deciding whether the appointment of a receiver is just or convenient, the court "must have regard to all of the circumstances but in particular the nature of the property and the rights and interests of all parties in relation thereto," which includes the rights of the secured creditor under its security: Bank of Nova Scotia v. Freure Village of Clair Creek (1996), 40 C.B.R. (3d) 274 (Ont. Gen. Div.), at para 10.

[41] There is a list of considerations that the courts have recognized must be viewed holistically in an assessment as to whether, in all the circumstances, the appointment of a receiver is just or convenient. In Kingsett Mortgage Corp. v. Mapleview Developments Ltd., et al., 2024 ONSC 1983, 13 C.B.R. (7th) 202, at paras. 24-25, Osborne J. stated that these considerations include:

a. whether irreparable harm might be caused if no order is made, although not an essential requirement where the appointment is authorized by the security documents;

b. the risk to the security holder taking into consideration the size of the debtor's equity in the assets and the need for protection or safeguarding of assets while litigation takes place;

c. the nature of the property;

d. the apprehended or actual waste of the debtor's assets;

e. the preservation and protection of the property pending judicial resolution;

f. the balance of convenience to the parties;

g. the fact that the creditor has a right to appointment under the loan documentation;

h. the enforcement of rights under a security instrument;

i. the principle that the appointment of a receiver should be granted cautiously; the consideration of whether a court appointment is necessary to enable the receiver to carry out its duties efficiently;

j. the consideration of whether a court appointment is necessary to enable the receiver to carry out its duties efficiently;

k. the effect of the order upon the parties;

l. the conduct of the parties;

m. the length of time that a receiver may be in place;

n. the cost to the parties;

o. the likelihood of maximizing return to the parties; and

p. the goal of facilitating the duties of the receiver.

[42] The appointment of a receiver becomes less extraordinary when dealing with a default where the lender has a contractual right to appoint a receiver and is simply seeking to enforce the term of an agreement already made: see Elleway Acquisitions Ltd. v. Cruise Professionals Ltd., 2013 ONSC 6866, at para. 27; and BCIMC Construction Fund Corporation et al v. The Clover on Yonge Inc., 2020 ONSC 1953, 78 C.B.R. (6th) 299, at paras. 43-45.

[43] The objective in the appointment of a receiver is to "enhance and facilitate the preservation and realization of a debtor's assets, for the benefit of all creditors": Canadian Equipment Finance and Leasing Inc. v. The Hypoint Company Limited, 2022 ONSC 6186, at para. 22.

[44] The criteria to consider under s. 101 of the CJA for the appointment of a receiver are similar to those articulated in the BIA context, although they are often more focused on the conduct of the parties, and in particular the party seeking this equitable statutory relief: see Anderson v. Hunking, 2010 ONSC 4008, at para. 15.

Is it Just or Convenient to Appoint the Receiver?

[45] Certain considerations were featured more prominently in the parties' submissions and those are what this endorsement focuses on, although all considerations raised have been considered.

Relative Harm and Preservation of IP and Its Use Pending Determination of the IP Dispute

[46] If 280 Ontario terminates its Consulting Agreement and stops providing its services to FHT before the dispute about FHT's ownership and other rights in and to the IP are determined, FHT would not be able to fulfill its obligations to FHS and this would in all likelihood either lead to the cessation of the entire CPRPM program and/or to the municipalities terminating their contracts with FHS. FHT is insolvent and without any revenue stream from FHS it would be forced into bankruptcy and would likely not be able to continue to prosecute/defend the pending Kitchener Proceedings.

[47] The CPRPM that FHT supports from a technical perspective represents FHT's entire business. The applicants supported FHT financially. FHT built its reputation with the municipalities through the development of a reliable program and timely responses to service requests.

[48] If 280 Ontario stops providing its services, the RPMS system and the CPRM will in all likelihood cease to function. The harm to FHT, the applicants and the public is obvious. The applicants and FHT are committed to keeping the RPMS system and CPRPM running and maintaining the delivery of the remote healthcare services to members of the public who are dependent upon the continued delivery of these services. It is a relevant consideration that the appointment of a receiver may not only support the applicants' own economic interests, but also the public interest in furtherance of healthcare delivery: see Vancouver Coastal Health Authority, at paras. 74-75.

[49] Even if the services that FHT has contracted with 280 Ontario to provide are just reduced rather than completely withdrawn, without the RPMS operating smoothly, including service requests being timely attended to, the integrity, reliability, and overall operation of the CPRPM is at risk, which ultimately risks patients' health and safety and could negatively affect the health of the patients who depend on the CPRPM program.

[50] 280 Ontario currently holds the IP and the systems that it operates. 280 Ontario has no real economic stake in FHT continuing to operate.

[51] FHT is insolvent. The only asset that FHT has is its claim to the IP. The applicants' security is dependent on FHT's ability to use the IP which in turn impacts the continued viability of the RPMS and CPRPM. Leaving the IP and operating systems under 280 Ontario's control and subject to its stated desire to terminate the Consulting Agreement and to stop providing its services will put the applicants' security at risk. Conversely, the Receiver will be authorized to keep the RPMS, and therefore the CPRPM, going under the Enhanced Status Quo Arrangement which the Receiver will take over the fulfillment and oversight of on behalf of FHT. This will enable the Receiver to preserve the FHT's business through the continuation of the Enhanced Status Quo Arrangement, at least until the issues associated with the IP are resolved.

[52] To address any lingering uncertainty about what the pre-existing "normal prices or charges" or terms of the oral or written agreements are, under which 280 Ontario will continue to provide its services to FHT pursuant to the receivership, given the Default Notice, status quo arrangement and Termination Notice, and now Enhanced Status Quo Arrangement, it was confirmed that the latter is what would be followed if the Receiver is appointed.

[53] If the Enhanced Status Quo Arrangement continues to be followed, as it has been confirmed it will be under the proposed receivership order, there will be no further accumulation of arrears to 280 Ontario. It will continue to be paid to do the contemplated work under this arrangement. Having the Receiver in place may, indeed, make the fulfillment of the requirements under this arrangement easier, given the parties' recent challenges in dealing with each other directly.

[54] The applicants assert that this Enhanced Status Quo Arrangement has been unworkable during this intervening time period; however, they remain optimistic that it can and should be preserved under the Receivership Order to ensure the continuation of the supply of critical services by 280 Ontario under its Consulting Agreement. They maintain that the Receiver will have the authority and ability to referee any disagreements between FHT and 280 Ontario regarding the terms of continued supply of these critical services and seek directions and assistance from the court as needed.

[55] Further, the proposed grant under the receivership order of certain access by the Receiver to the Amazon Web Services ("AWS") account (that will not be shared with FHT, FHS or the applicants) will enhance the delivery of services and relieve some of the burden from 280 Ontario. Until now, 280 Ontario has refused to provide credentials with super administrator privileges for the AWS portal on which the RPMS operates. These credentials would allow FHT to complete service requests in a timely manner on its own without having to solely rely upon 280 Ontario. Having a neutral third-party and a court officer utilize these credentials should allay any concerns of 280 Ontario with respect to the intellectual property, while ensuring the continuity (and stability) of services on the RPMS Platform. The Receiver has undertaken not to share these credentials or any IP it accesses without court approval.

[56] Conversely, there is no apparent harm to 280 Ontario from the granting of the receivership order, aside from its inability to pursue its claims in the Kitchener Proceedings without leave of the court due to the stay. In that regard, the applicants and FHT have made it clear that they intend to pursue a resolution of the IP dispute. 280 Ontario has itself indicated a willingness to engage in mediation and/or expedited process for the resolution of this dispute.

[57] 280 Ontario suggests that it will somehow be disadvantaged by having to deal with the Receiver rather than FHT due to some presumed enhanced credibility that the Receiver may have with any adjudicative decision maker. I am not aware of a strategic advantage being afforded court officers when they appear as litigants. If the Receiver itself becomes responsible for assessing claims in the receivership associated with the IP dispute, those determinations will be subject to review by the court.

[58] Nor can I put any weight upon the bald assertion by 280 Ontario that the Receiver will disclose the IP to the applicants that appointed it, giving them an advantage in the IP dispute resolution process. The Receiver is a court officer with duties to the court and all creditors and there is no reason to presume that it will favour the applicants over other creditors and over its duties to the court.

Secured vs. Unsecured Debt and Priorities

[59] There is prima facie evidence of material secured indebtedness, even after discounting for the challenges that have been raised by 280 Ontario. The precise quantum of the secured debt and the validity of the security, if later challenged on a proper evidentiary record, can be determined in these receivership proceedings. Verifying the security and the amount of secured debt is one of the roles that the Receiver will be required to perform.

[60] The applicants point to the subordinated nature of 280 Ontario's unsecured claims against FHT as grounds for giving less weight to its concerns on this application: see KEB Hana Bank v. Mizrahi Commercial (The One) LP et al., 2024 ONSC 3739, 14 C.B.R. (7th) 373, at paras. 113-115.

[61] 280 Ontario counters with challenges to the applicants' security. First, by suggesting that it was strategically registered after the IP, other disputes arose between FHT and 280 Ontario, and the registrations were not disclosed. Even if not properly registered (as 280 Ontario appears to suggest) the applicants have security under the GSAs which, by virtue of the operation of ss. 20 and 30 of the PPSA, still ranks their claims ahead of an unsecured creditor.

[62] For immediate purposes, I am satisfied that there is uncontroverted evidence that even if some of the applicants' registered their security after the IP dispute arose, some of them clearly did register their security at the time of their loan advances. Further, Verge, the sixth secured creditor, is not an affiliate and did advance funds, receive security and register it under the PPSA. The arguments made by 280 Ontario challenging the priority of Verge's security position over 280 Ontario's in respect of FHT, due to its recourse against other security (e.g. a guarantee from FHS), are tenuous and not factually supported on this application.

[63] Second, 280 Ontario suggests that the applicants' loans were actually equity investments and should be re-characterized as such, or should be subordinated by operation of 137(1) of the BIA based on the alleged impropriety of the loan and security transactions which they caused FHT to enter into for the sole and improper purpose of preferring the CF Entities' interests over the position of 280 Ontario. For purposes of this application, these factually and legally complex issues do not need to be decided. That does not foreclose them from being raised, if appropriate, in the receivership proceedings. 280 Ontario itself indicates in its factum that findings in respect of these allegations are not sought for purposes of its request for the dismissal of this application. Nor could they be given that they are predicated on disputed allegations of improper conduct of the applicants and their nominees in the control of FHT that have not been fully particularized or supported.

Other Considerations

[64] By heading topic, the other highly fact dependent considerations that 280 Ontario points to in its factum for why it is not just or convenient for the Receiver to be appointed are all conduct-based (primarily alleged bad conduct by the applicants, FHT and FHS):

a. The receivership application is not brought in good faith. It is a ruse.

b. The applicants have had total control over the solvency or insolvency of FHT throughout their relationship with 280 Ontario, and set up a scheme of an undisclosed secured loan capital structure to insulate the CF Entities and FHS, in the event of this exact scenario coming to being.

c. The applicants have total control over the payment owing to 280 Ontario, and permitted and encouraged 280 Ontario to perform services for several months without any means for FHT to pay for such services.

d. The applicants caused FHT to enter into loan agreements and general security agreements in favour of the applicants to prefer their position ahead of 280 Ontario. In doing so, the CF Entities' appointees on the FHT board of directors breached their duty of care owed to 280 Ontario and breached fiduciary duties owed to FHT by favouring the interests of FHS and the applicants over FHT and its bona fide creditors.

e. The applicants are using this receivership process to further their longstanding scheme to take control of all CPRPM intellectual property, and to extract the Developed IP out of FHT to either of FHS or the applicants by way of a credit bid sale process, leaving nothing for 280 Ontario and its over $1.1 million claim.

f. The conduct of the applicants, FHS and directors of FHT is oppressive to 280 Ontario.

g. The applicants and FHT acting in concert have, from the outset of their dealings with 280 Ontario, put their interests ahead of 280 Ontario as the only bona fide third party creditor of FHT.

h. A Receiver is not necessary to protect the value of FHT's assets - being the Developed IP, and the Receiver has no demonstrated expertise in the IP or the operation of the RPMS or the CPRPM.

i. 280 Ontario is the only party in a position to ensure patient care, it provides quality service and should be paid for that. Further, there is no evidence of any system user complaints regarding 280 Ontario's service.

j. This application was commenced in the face of the existing Kitchener Applications.

[65] As outlined earlier in this endorsement, the assertions and contentions about ulterior motives and the alleged wrongful conduct of the applicants, FHT and FHS have not been established on a balance of probabilities on the evidence before the court on this application. No findings are made in this regard. The mere existence of these allegations and the speculation and inuendo that is raised in support of them do not undermine the other factors that have led the court to conclude that the appointment of the Receiver is just and convenient at this time.

[66] I will nonetheless briefly address the latter two factors identified by 280 Ontario:

a. Regarding 280 Ontario's assertion that it should be paid for its services, the Receivership application contemplates that 280 Ontario will continue to be engaged and paid under the Enhanced Status Quo Arrangement to provide the necessary patient care. The applicants confirmed that is what is contemplated under the requested receivership order. There is broad discretion in the court's power to grant a stay to prevent a critical supplier from ceasing to provide services.[1]

b. The existing Kitchener Applications, and now the newly issued Kitchener Action, raise issues that will have to be resolved or determined and this receivership application does not change the need for that, nor does the appointment of the Receiver give FHT an advantage in the resolution of those issues, for reasons discussed earlier in this endorsement.

[67] 280 Ontario also contends that the relief sought by this application, which is to prevent 280 Ontario from terminating its Consulting Agreement and require it to continue to provide its services under the Enhanced Status Quo Arrangement pending the determination of the IP dispute, should have been sought by way of injunction in the Kitchener Proceedings. It suggests that a receivership application should not be used to secure injunctive relief (what it characterizes as an injunction by receiver) that should have been sought in the Kitchener Proceedings.

[68] 280 Ontario contends that an injunction in the Kitchener Proceedings would require a showing of irreparable harm to FHT to succeed. While many of the requirements overlap between an injunction and the appointment of a receiver, it has been recognized by this court that there is no requirement that the secured creditor demonstrate irreparable harm or that there is an actual and immediate danger of assets being dissipated in order to satisfy the requirements for the appointment of a Receiver: see Bank of Montreal v. Carnival National Leasing Limited, 2011 ONSC 1007, 74 C.B.R. (5th) 300, at paras. 25, 28-29.

[69] The fact that the test is different and perhaps less onerous in certain respects to secure the appointment of a Receiver does not necessarily mean that existing litigation should trump a receivership. The logic of 280 Ontario's argument could have (I presume unintended) implications for receivership applications where there is existing litigation that might be stayed by the appointment of a Receiver.

[70] Despite the overlap, the remedy of an injunction and the remedy of the appointment of a Receiver are independent and the applicants were not foreclosed from seeking this appointment while the Kitchener Proceedings remained outstanding. Once the appointment is made, it may well be more cost effective or efficient for the issues surrounding the Termination Notice (and whether it should be stayed or enjoined) and the mandate for the continuation of the Enhanced Status Quo Arrangement to be adjudicated in this receivership application than in the Kitchener Proceedings. That is not a fait accompli, but the receivership proceedings are often accompanied by efficient and cost effective means of resolving claims and disputes.

Stay of Proceedings

[71] I agree with the applicants that a Receiver, and the stay of proceedings, is urgently needed to stabilize and preserve the Debtor's business. This could not be achieved through an injunction sought in the Kitchener Proceedings, as 280 Ontario suggests. A Receiver should be able to assess the business and deploy the appropriate resources to quickly and efficiently keep the CPRPM program operating. The fact that the receivership proceedings could provide a forum for the Debtor and 280 Ontario to quickly resolve their IP dispute while ensuring that patient care is not put at risk is a positive feature that is consistent with the different avenues for resolving the IP dispute that were being considered at the last case conference in the Kitchener Proceedings.

[72] In terms of the stay of proceedings, it is agreed by the applicants, through their counsel, that they will not pursue claims in the Kitchener Proceedings against 280 Ontario. They rely on the stay to prevent 280 Ontario from pursuing its claims/counterclaims in those same proceedings. It is expected that the Receiver might come back to make recommendations and seek directions concerning proposed process(es) for the determination of the IP dispute and any other issues remaining in the Kitchener Proceedings.

Protection of Personal Health Information

[73] The Receiver will also serve an important role as it will ensure that any personal health information ("PHI") that has been collected from users of the CPRPM program that is managed and stored on the RPMS platform is protected against unauthorized use and disclosure. The Receiver can ensure that the PHI is safeguarded in accordance with the requirements of the Personal Health Information Protection Act, 2004, S.O. 2004, c. 3, Sch. A, at ss. 10, 12. Neither the Consulting Agreement nor 280 Ontario's Termination Notice provide for any of the necessary protections of PHI.

Conclusion: It is Just and Convenient to Appoint the Receiver

[74] Having considered the relevant factors outlined above, and including those discussed in paragraphs 59-62 of the applicants' factum, I am satisfied that it is just and convenient for the Receiver to be appointed. I make this finding based on a holistic consideration of the applicable factors, and have not placed any significant weight on the fact that the security documents provide for the appointment of a receiver, although that could have been a significant factor.

[75] The Receiver will be able to deal with some of the issues such as policing or refereeing the Enhanced Status Quo Arrangement, including ensuring that 280 Ontario is being paid so that it is not forced to take on additional unsecured debt. The Receiver can also protect the customer PHI.

[76] The benefits offered by a receivership far outweigh any prejudice to 280 Ontario. Not only does it ensure the continuity of patient care, but it also preserves the business and the positions of the parties in the Kitchener Proceedings.

Receivership Order: Requested Caveats and Carve Outs

[77] In the alternative to its main position in opposition to the granting of the receivership order, 280 Ontario argued that the Kitchener Proceedings should be carved out of the stay. Since an early determination of the IP and payment disputes in the Kitchener Applications in October 2025 is no longer a realistic prospect and the evidentiary record for those determinations remains incomplete, there is no compelling reason in my view to carve the Kitchener Proceedings out of the stay under the receivership order at this time. The applicants suggest that a summary approach to determining the issues raised in the Kitchener Proceedings can be achieved in this receivership, through a motion for directions or a court approved and supervised claims/appeal process. There may be other approaches to consider as well, but until there is something concrete proposed the stay should apply to those proceedings as well.

[78] The parties agreed at this hearing that it would be appropriate for the court to endorse that the appointment order only permits the Receiver to take possession of Property owned by FHT. That applies equally to the IP, so insofar as ownership is in dispute, without some further order or direction of the court, the Receiver will not be able to take possession of disputed IP. In other words, the appointment of the Receiver is not dependent upon any finding regarding the IP ownership and this appointment does not prejudge or determine the IP dispute.

[79] At the July 3, 2025 hearing the applicants submitted a revised draft appointment order that removed certain paragraphs that the court had expressed concern about during the first appearance. The now revised proposed form of order does not deviate in any material respect from the Commercial List model order. I have signed the requested order today. It shall have immediate effect without the necessity of formal issuance and entry.

[80] The parties agreed at the hearing to await this endorsement and then they will meet and confer about any costs that may be sought. If they are not able to agree, they may arrange a case conference before me at which further directions will be provided if the court is prepared to entertain any costs submissions.

Kimmel J.

Date: September 11, 2025

[1] It is noted anecdotally that the court's discretion can be exercised even in circumstances where the supplier is not being paid in accordance with its contractual terms, when the circumstances warrant it. This is not seen as a re-writing their Supply Agreements. The contractual obligations remain intact; rather, it is a means of addressing a short-term need for the continued supply of a critical service (and eventual transition, if need be): see Xplore Inc. (Re), 2024 ONSC 4593, 15 C.B.R. (7th) 301, at para. 56. This case was not cited by the parties but is noted by the court as an additional reference. The primary consideration here is that the applicants have confirmed that receivership order is intended to provide that 280 Ontario will be paid in accordance with the Enhanced Status Quo Arrangement.