SUPERIOR COURT OF JUSTICE – ONTARIO [Commercial List]
IN THE MATTER OF SECTIONS 47(1) AND 243(1) OF THE BANKRUPTCY AND INSOLVENCY ACT, R.S.C. 1985, C. B-3, AS AMENDED, AND SECTION 101 OF THE COURTS OF JUSTICE ACT, R.S.O. 1990 C. C.43, AS AMENDED
RE: 816877 ONTARIO LIMITED AND S.H. GANZ HOLDINGS INC., Applicants
AND:
THE CANADIAN GROUP, Respondent
BEFORE: Justice Jana Steele
COUNSEL: Brian N. Radnoff & Blair G. McRadu, for the Applicants Ren Bucholz & Grace Bryson, for a partner in the Canadian Group, Michael Albert and 1389055 Ontario Corp. Alexandra Teodorescu & Birpal Benipal, for David Peterson Brandon Jaffe, for the Receiver Spencer Thompson, for Jessica Gavin
HEARD: May 11, 2026
ENDORSEMENT
1MNP Ltd., the court appointed receiver and manager of The Canadian Group, (the “Receiver”) brings a motion seeking, among other things, expanded investigative powers. The Receiver states that the expanded powers are required so that the Receiver can investigate certain transactions between The Canadian Group (“TCG”) and TCG insiders.
2The applicants and Mr. Ganz, the principal of 816877 Ontario Limited (“GanzCo”), support the Receiver’s motion. GanzCo is one of two partners in TCG.
3The Receiver’s motion is opposed by the other partner in TCG, Michael Albert, and 1389055 Ontario Corp. (“AlbertCo”). It is also opposed by two third-party former employees, David Peterson and Jessica Gavin, who the Receiver seeks to examine.
4The Receiver seeks to conduct examinations under oath of Mr. Albert, Mr. Peterson, Ms. Gavin, and Owen Rogers, and to compel the production of certain documents.
5Mr. Rogers, a director of GanzCo, has consented to the examination.
6Mr. Albert and AlbertCo bring a cross-motion in the event the Court allows the Receiver to question the proposed witnesses. They seek to require the Receiver to define the subject matter of the questioning and limit the scope. The Receiver seeks to ask about transactions going back more than ten years. Mr. Albert and AlbertCo also seek an order requiring the Receiver to provide certain information and produce certain documents.
7For the reasons set out below, I have determined that the Receiver shall be granted the power to examine Mr. Albert under oath, provided that the time period covered by the examinations shall not exceed two years from the date of the commencement of the receivership. If following such examination, the Receiver is of the view that examinations dating back further are required, it may return to court to request authority to expand the time period, with submissions on the potential limitations issue.
8I have determined that the Receiver must exhaust its other investigatory tools first before examining the former employees, Mr. Peterson and Ms. Gavin. If the information and documentation requested is not provided in a timely manner, the Receiver may return to court to request enhanced powers.
9The Receiver’s request for approval of fees and disbursements is approved. The Receiver’s Third Report and the activities set out therein are approved.
10Mr. Albert and AlbertCo’s cross-motion for the production of certain documents and information is dismissed.
Background
11TCG is an Ontario partnership between AlbertCo and GanzCo, with each partner holding equal partnership interests. TCG operated a puzzle, game and toy import and distribution business in Canada and the U.S.
12MNP was appointed as an interim receiver of TCG on or about May 16, 2025 (the “Interim Appointment Order”).
13On June 4, 2025, Kimmel J. granted an order appointing MNP as Receiver (the “Appointment Order”).
14Mr. Albert is TCG’s former CEO. As noted above, he is also the principal of AlbertCo, one of TCG’s two partners.
15The only two pre-filing creditors that have an economic interest in the matter are 1552021 Ontario Corp. (“AlbertCo2”), and 816877 Ontario Limited (“GanzCo2”) (AlbertCo2 and GanzCo2, together, the “Senior Lenders”). The total secured debt of the Senior Lenders is approximately $15 million. The priority agreement among the Senior Lenders provides for the following waterfall of payments:
a. The first $300,000 shall be applied in reduction of amounts owing to AlbertoCo2;
b. The next $150,000 shall be applied in reduction of amounts owing to GanzCo2;
c. The next $1.5 million shall be applied in reduction of amounts owing to GanzCo2;
d. Further payments shall be applied in equal amounts in reduction of the amounts owing to the Senior Lenders.
16Ms. Gavin is TCG’s former Executive Vice-President.
17Mr. Peterson is TCG’s former Chief Financial Officer.
18Mr. Albert operated and managed TCG; whereas GanzCo was a passive partner in the business.
19The Receiver is seeking expanded powers because it is looking into whether Mr. Albert benefited from any insider transactions. Specifically, the Receiver is investigating certain business expenses claimed by Mr. Albert and certain draws taken by AlbertCo.
Analysis
Is it just or convenient to grant the Receiver expanded investigative powers?
20The Receiver seeks expanded powers so that it can examine certain individuals under oath.
21The Court of Appeal in Akagi v. Synergy Group (2000) Inc., 2015 ONCA 368, 125 O.R. (3d) 401, noted at para. 66 that in proper circumstances the court may grant a receiver investigatory powers under the court’s authority under s. 101 of the Courts of Justice Act, R.S.O. 1990, c. C.43 (the “CJA”). Section 101 of the CJA provides that the court may appoint a receiver or receiver and manager where it is “just or convenient to do so.”
22In Akagi the Court of Appeal noted, at para. 66, that the appointment of a receiver with investigatory powers may be a useful tool in “appropriate circumstances and with appropriate restraints.” At para. 67, the Court of Appeal elaborated that the authority of the court under s. 101 of the CJA to appoint a receiver is “undoubtedly broad and must be shaped by the circumstances of individual cases,” then went on to caution as follows:
[T]he appointment of a receiver is an extraordinary and intrusive remedy and one that should be granted only after a careful balancing of the effect of such an order on all of the parties and others who may be affected by the order. [...]
23In PricewaterhouseCoopers Inc. v. Northern Citadel, 2023 ONSC 37, 5 C.B.R. (7th) 345, Chief Justice Morawetz set out the elements for the Court to consider when considering a request to appoint an investigative receiver:
[96] The themes considered on a request to appoint an investigative receiver have been set out by the Court of Appeal for Ontario in Akagi v. Synergy Group (2000) Inc., 2015 ONCA 368 at para. 90 [...]:
a) The appointment of an investigative receiver is necessary to alleviate the risk posed to the plaintiff’s right of recovery;
b) The primary objective of investigative receivers is to determine the true state of affairs of the debtor and related entities;
c) Generally, the investigative receiver does not control or operate the debtor’s business; and
d) The investigative receivership must be carefully tailored to assist the creditors recovery while protecting the debtor’s interest and go no further than necessary.
24In Northern Citadel, the Court appointed the receiver, however, it did not authorize the requested investigative powers at that time:
[98] [...] The Receiver can make the necessary inquiries of the Respondents and, if the requested information is not produced in a timely and appropriate manner, the Receiver can return to court to request enhanced powers.
25The Court must undertake a fact-specific inquiry to determine whether a receiver’s powers ought to be expanded. The Court has expanded a receiver’s powers where parties have obstructed the work of the receiver: GE Real Estate v. Liberty Assisted Living, 2011 ONSC 5741, 83 C.B.R. (5th) 139.
26In the instant case the Receiver’s aim of conducting the proposed examinations is to find out more information about Mr. Albert’s business expenses paid from the partnership over the past 11 years, and to assess whether distributions from January 2023 onwards were appropriately made from TCG to AlbertCo.
Proposed Examination of Mr. Albert
27Mr. Albert submits that it is not just, convenient or advisable to expand the Receiver’s powers in the circumstances of this case. Mr. Albert points to the partnership structure and argues that every dollar dedicated to the Receiver and its counsel will erode Mr. Albert’s secured claims against the partnership. Mr. Albert further argues that the only parties who stand to benefit from any expanded powers of the Receiver are Mr. Ganz and his companies. He states that Mr. Ganz’s knowledge of the affairs of the business, including whether Mr. Ganz accepted the income and reimbursements paid to Mr. Albert, are necessary to assess these claims; yet there is no evidence from Mr. Ganz on this motion.
28GanzCo notes that the TCG financial statements that were regularly provided did not include a breakdown of monthly income, nor did they include detailed information on expenses and advances. GanzCo states that this additional information was not available until the Receiver did a full review of TCG’s books and records. GanzCo submits that there is a significant information imbalance regarding the management and financial practices of TCG.
29The Receiver argues that Mr. Albert was not cooperative in handing over his company laptop. Mr. Albert had wanted to purchase the computer from the Receiver because he also used the computer for personal matters and did not want to switch devices if possible. The TCG-related information on the computer was also saved to the cloud-based server. When the Receiver demanded the return of the device, Mr. Albert provided the computer to the Receiver after he had all the data professionally backed up and stored and removed his personal information (after the data backup). However, the Receiver notes that several months elapsed between its request for the return of the laptop, and the eventual return of the device, with deleted information.
30Unlike the obstructionist conduct of the respondent in GE Real Estate, Mr. Albert submits that he has been cooperative. Among other things, Mr. Albert facilitated the appointment of the Receiver and the Receiver’s sale process. Mr. Albert submits that in these circumstances it would not be just or convenient to subject him to open-ended, viva voce examinations regarding business expenses going back more than ten years. Mr. Albert argues that expanding the Receiver’s powers in the instant case is not advisable.
31Unlike Akagi, I am satisfied that in the instant case the Receiver has tailored its request as it pertains to Mr. Albert. The Receiver seeks to examine Mr. Albert under oath, because the Receiver seeks to investigate certain transactions involving Mr. Albert that the Receiver is concerned may have been improper.
32Mr. Albert also submits that the Receiver is seeking this information for litigation purposes. The Receiver states that at this time it is gathering information and not using the examination for contemplated litigation. In Baigel Corp. (Trustee of Kolenc) v. Di Francesco, 2024 ONSC 5923, 16 C.B.R. (7th) 123, in the context of a s. 163 BIA examination, Kimmel J. noted, at para. 23, that “[a]s a general rule, a s. 163 BIA examination should not be used as a form of discovery for contemplated litigation.” At para. 21, Kimmel J. stated:
While the purpose of a s. 163 BIA examination is to investigate the property and affairs of the Bankrupt, the trustee is entitled to investigate contemplated litigation that might involve the property and affairs of the Bankrupt. This is a tool that enables the trustee to do so thoroughly, before expending estate money in court proceedings. It is proper for the Trustee to obtain as much information as possible before recommending to the inspectors that the bankrupt estate should, or should not, pursue an action, including by conducting a s. 163 BIA examination of a defendant in a potential civil action.
33While the current proceeding is a receivership, not a bankruptcy, in my view similar principles should apply. At this point the Receiver is gathering information to, among other things, determine whether to pursue litigation.
34I am satisfied that it is just or convenient in the circumstances to expand the Receiver’s powers such that it may examine Mr. Albert under oath, subject to the following limitation: at this stage, the time period covered by the examination shall not exceed two years from the date of the commencement of the receivership. If following such examination, the Receiver is of the view that examinations dating back further are required, it may return to court to request authority to expand the time period, with submissions on the potential limitations issue.
35Mr. Albert asks that the examination proceed by way of written interrogatory. Given that the time period has been restricted, and the Receiver’s concerns, I am satisfied that the examination of Mr. Albert should occur in person.
36Mr. Albert also asks that the subject matter of the examination questions be defined. As noted by the Receiver, the subject matter of the examination questions is set out in the Receiver’s Third Report.
37Mr. Albert also seeks an order requiring the Receiver to:
a. Advise whether any of David Peterson, Jessica Gavin, and Owen Rogers (the “Proposed Witnesses”) have provided statements and provide copies;
b. Produce the Receiver’s notes from any interviews of the Proposed Witnesses;
c. Produce copies of correspondence between the Receiver and Proposed Witnesses;
d. Produce details of any indemnity or monetary retainer provided to the Receiver by the applicants or others in respect of the Receiver’s fees and disbursements; and
e. Provide a list of questions that the Receiver would like answered by Mr. Albert and each of the other Proposed Witnesses.
38As noted by Osborne J. (as he then was), in KEB Hana Bank v. Mizrahi Commercial (The One) LP et al., 2024 ONSC 4488, at para. 14, “the courts have consistently held that a stakeholder in a receivership is entitled only to information relevant to issues in that receivership.” He further noted, at para. 16 that “information requests to which a receiver is compelled to respond are limited to those that are ‘reasonable’ and relate to a ‘specific purpose’ directly relevant to issues in the receivership.” Courts have also held that although interested parties may have rights to “certain relevant documents,” the right does not entitle them to go on a “fishing expedition:” Battery Plus Inc., Re, 2002 49569, at para. 21.
39Mr. Albert notes that in general partnerships, like TCG, partners are entitled to significant information regarding the partnership’s affairs, including “full information of all things affecting the partnership:” Partnerships Act. R.S.O. 1990, c. P.5, s. 28. Mr. Albert further submits that he is entitled to know the case he must meet.
40I am not satisfied that Mr. Albert is entitled to the Receiver’s internal investigative materials. As noted above, the Receiver has certain concerns which it is investigating. While Mr. Albert states that he is entitled to know the case he must meet, the Receiver’s Third Report sets out in detail the Receiver’s concerns, which will be the topic of the examination.
41The cross-motion is dismissed.
Proposed Examinations of Mr. Peterson and Ms. Gavin
42Mr. Peterson filed written materials with the court. Ms. Gavin, in oral submissions, adopted Mr. Peterson’s position. As noted above, Mr. Peterson and Ms. Gavin are both former TCG employees.
43Mr. Peterson submits that the relief sought against him personally is neither necessary nor proportionate. Further, he submits that the Receiver has not discharged the evidentiary burden required to justify compelled examinations under oath. He notes that the Receiver has not identified any instance where he was uncooperative, untruthful or obstructive.
44Both Mr. Peterson and Ms. Gavin state that they have acted cooperatively with the Receiver at all times. Although the case law supports that where there has been obstruction or non-compliance with disclosure requests it may be appropriate to grant the receiver expanded examination powers, the question remains whether it is just or convenient in the circumstances to do so in the instant case.
45As was the case in GE Real Estate, expanded examination powers may be granted where there is obstruction or non-compliance with disclosure requests or where there is a failure to cooperate with the Receiver. In GE Real Estate, D.M. Brown J. (as he then was) concluded, at para. 34, that “the failure of [the respondent] to comply with the production requirements of the Appointment Order renders it just, reasonable and necessary to grant the Receiver the requested powers of examination. The evidence discloses that [the respondent] is doing its best to stonewall the Receiver and delay the production of relevant documents and information.”
46In Ms. Gavin’s oral submissions her counsel noted that the Receiver’s multiple requests have already resulted in her having to incur costs. Ms. Gavin submits that to require a former employee who has been cooperative to undergo further examinations under oath unfairly shifts costs to her.
47Mr. Peterson submits that absent obstructionist conduct, the ordinary, less intrusive tools of the receivership, such as information interviews, written information requests, and document production, should be exhausted before resorting to the extraordinary remedy of compelling a non-party to attend an examination under oath. I agree. It would be disproportionate and inconsistent with the principles in Akagi and Northern Citadel for the court to require a cooperative, non-party to attend a compulsory examination under oath at this time. The Receiver has not exhausted its ordinary investigatory tools to obtain information from Mr. Peterson and Ms. Gavin. Among other things, the Receiver has not posed any follow up questions or made further information requests of Mr. Peterson since August 2025. As noted by Mr. Peterson, instead of identifying information that he failed to provide and asking Mr. Peterson for that information, the Receiver brought this motion.
48As set out above, the Receiver will have the expanded power to examine Mr. Albert. If following the examination of Mr. Albert and the use of its existing powers under the Appointment Order, the Receiver is of the view that examinations under oath are necessary for Mr. Peterson and/or Ms. Gavin, it may return to court to request the further expansion of its powers at such time.
49In my view, the relief sought against the former employees, Mr. Peterson and Ms. Gavin, is premature. The Receiver has powers under the Appointment Order, which, in the absence of exceptional circumstances, the Receiver should exhaust before seeking additional investigatory powers.
Other Relief
50The Receiver also seeks approval of its Third Report and the activities set out therein, as well as approval of the Receiver’s and its counsel’s fees and disbursements. Mr. Abert asks that the court’s consideration of the Receiver’s fees and expenses await the discharge motion, because he is of the view that the receivership has been conducted inefficiently. Mr. Albert submits that the Court will then be in a better place to assess whether the Receiver’s actions were, in their totality reasonable, and/or whether related costs should be borne by the applicants as opposed to the partnership.
51The Receiver notes that Mr. Albert’s complaints related to an aborted credit bid, and the sale process. Court approval in respect of these activities has already been obtained.
52When considering whether to approve professional compensation, the court may have regard to the following factors, set out in Bank of Nova Scotia v. Diemer, 2014 ONCA 851, at para. 33:
a. The nature, extent and value of the assets;
b. The complications and difficulties encountered;
c. The degree of assistance provided by the debtor;
d. The time spent;
e. The receiver’s knowledge, experience and skill;
f. The diligence and thoroughness displayed;
g. The responsibilities assumed;
h. The results of the receiver’s efforts; and
i. The cost of comparable services when performed in a prudent and economical manner.
53The Court of Appeal directed in Diemer, at para. 45, that in determining whether compensation sought is fair and reasonable, the above factors should be considered. The Court of Appeal noted that “value provided should pre-dominate over the mathematical calculation reflected in the hours times hourly rate equation.” The Court of Appeal elaborated that “[t]he focus of the fair and reasonable assessment should be on what was accomplished, not on how much time it took.”
54I am satisfied that the fees and disbursements of the Receiver and its counsel, supported by fee affidavits, are fair and reasonable in the circumstances and should be approved.
55The Receiver seeks approval of its activities and conduct as set out in the Second Report. The approval of a court officer’s activities and reports is “routinely granted:” Target Canada Co (Re), 2015 ONSC 7574, 31 C.B.R. (6th) 311, at paras. 2 and 23.
56The Receiver’s Third Report and the activities set out therein are approved.
Justice Jana Steele
Date: May 27, 2026