Court File and Parties
Court File No.: CV-24-00717340-00CL Date: 2025-10-01 Ontario - Superior Court of Justice – 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 Pride Group Holdings Inc. and those Applicants listed on Schedule "A" hereto (each, an "Applicant", and collectively, the "Applicants")
Re: Pride Group Holdings Inc. et al., Applicants
Before: Peter J. Osborne J.
Counsel:
- Leanne Williams, Puya Fesharaki and Shurabi Srikaruna, for the Applicants
- Aubrey Kauffman, Julia Chung and Daniel Richer, for the Banking Syndicate/DIP Lenders
- Andrew Winton, for Jasvir Johal and Sulakhan Johal
- Elaine Gray, for Daimler Truck Financial Services Canada Corporation and Daimler Truck Financial Services USA LLC
- Peter Kolla, for Regions Bank
- Sean Stidwill, for Mitsubishi HC Capital Canada, Inc. and Mitsubishi HC Capital America Inc.
- Ben Muller, for Royal Bank of Canada, in its capacity as Financial Services Agent
- Kelly Bourassa, for the Monitor
Heard: June 25, 2025
Endorsement
Motion for Tolling Order
1The Administrative Agent for the Syndicate Lenders moves for an order tolling the applicable Limitation Periods relating to any claims against the Tolled Parties including any of the Pride Entities, any of the Additional Stay Parties, each of the former and current directors, officers, employees, consultants, sub-consultants, contractors and sub-contractors of either of those two entities, and each of the A&N 2016 Family Trust and the N&O 2016 Family Trust that may expire during the currency of the Stay Period as defined in the second ARIO or within 60 days following the termination or expiry thereof.
2Defined terms in this Endorsement have the meaning given to them in the motion materials unless otherwise stated.
Service and Support
3Service has been effected on the Service List and in addition, all other affected parties (i.e., those whose claims or potential claims might be tolled and those who might be defendants or respondents in such claims).
4The relief sought today is unopposed, it is supported by the Trustee in Bankruptcy in respect of each of Sulakhan Johal and Jasvir Johal and Daimler, and is recommended by the Monitor.
Factual Background
5I have not set out here all of the relevant facts supporting the relief sought, as they are fully explained in the materials. It is sufficient to note that the Pride Entities remain indebted to the Syndicate Lenders on a secured basis in an aggregate principal amount that exceeds CAD $265 million and USD $71 million.
6The Administrative Agent believes that the Pride Entities and the Additional Stay Parties "through the instrumentality of their former and current officers, directors, employees, consultants, sub-consultants, contractors, subcontractors and shareholders may have coordinated and implemented a massive fraud against the Agent and other financiers".
7There is a stay of proceedings in effect in this CCAA proceeding, and there are also stays of proceedings resulting from the bankruptcy proceedings of the Johals (although lift stay motions have been granted in those proceedings in respect of certain matters).
8The Parties and stakeholders are focused on upcoming cost allocation proceedings and an ongoing mediation. All are agreed that efforts should continue to be concentrated on stabilizing the disruption caused by the issues and mitigating losses by working to maximize value.
9There is a risk that certain Limitation Periods may expire during the Stay Period before the Agent and other creditors and stakeholders can complete their investigations and assessments of their respective positions and comments claims, if appropriate.
10A limited tolling order has already been made in this CCAA proceeding, which affects certain non-CCAA parties (i.e., Additional Stay Parties or Personal Guarantors).
Court's Analysis
11All stakeholders are of the view today that a tolling order in the form sought is much preferable to the disruption and distraction that will be caused by those parties seeking to divert their attention and resources today to seeking lift stay orders to commence claims as would otherwise be necessary. I agree.
12I am satisfied that the proposed relief should be sought and that jurisdiction to grant that relief flows from the wide discretion afforded by section 11 of the CCAA. That statutory provision has been relied upon by this Court and other Canadian courts to toll limitation periods against both CCAA debtors and parties related thereto. See, for example: Ontario Securities Commission v. Bridging Finance Inc., 2023 ONSC 2140 at para. 15; In the Matter of a Plan of Compromise or Arrangement of JTI Macdonald Corp., 2019 ONSC at para. 27; and 1057863 BC Ltd., Re, 2020 BCSC 759 at para. 122.
13I am satisfied that such relief, here is appropriate and would advance the policy and remedial objectives of the CCAA: Century Services Inc. v. Canada (Attorney General), 2010 SCC 60 at para. 22 and Canada v. Canada North Group Inc., 2021 SCC 30 at para. 21.
Reservation of Rights
14Counsel for the Johals advised the Court that while those parties were not opposed to the relief being sought today, it was appropriate, in their submission, that they have the ability to seek at a later time, an order varying or terminating the tolling provisions if circumstances were to change. This ability is acknowledged by both the Administrative Agent and the Monitor who observe, correctly in my view, that it would operate in the same way that a party may seek to vary or amend the ARIO pursuant to the "comeback" clause. It was further noted that most tolling agreements have some provision for expiry (i.e., a sunset clause) or a mechanism for termination on notice to all parties, and such a reservation of rights would be consistent with that approach.
15I accept the position advanced by Mr. Winton in this regard. While no detailed termination can or should be made today about whether, when and on what terms such relief might be granted, those parties have the ability to seek it in the future, if and as necessary. Any such motion should be made on notice to the Service List and all other affected parties, just as was the motion today.
Order
16For all of these reasons, the proposed relief is granted.
17Order to go in the form signed by me today which has immediate effect without the necessity of issuing and entering.
Osborne J.