Bankruptcy and Insolvency Law - SCJ

This decision concerns the transition of the receivership of the "The One" development project at Yonge and Bloor in Toronto to Companies’ Creditors Arrangement Act (CCAA) proceedings.

The court granted a discharge order for the receiver, an initial CCAA order, and approved a transaction with Tridel Builders Inc. for project completion.

The court also denied an adjournment request from a late-appearing stakeholder, approved the appointment of a monitor and chief restructuring officer, and authorized various charges and reliefs to facilitate restructuring and maximize value for stakeholders.

This decision addresses whether Cushman & Wakefield ULC (C&W), as real estate broker, is entitled to a commission in respect of Stelco’s purchase of the Stakeholders’ limited partnership units and other equity in the Legacy Lands LP, under the Companies’ Creditors Arrangement Act proceedings.

The court finds that C&W is not entitled to a commission, as the relevant brokerage agreements had expired or were never executed for the properties in question, and the transaction at issue was not contemplated by the commission provisions.

The court also dismisses C&W’s alternative claim for unjust enrichment.

The defendant, the Attorney General of Canada, brought a motion to strike the plaintiff's statement of claim and dismiss the action concerning the ownership and disposal of two mobile medical clinics.

The court found that the plaintiff lacked the legal capacity to bring the action because the clinics were owned by a numbered company in which the plaintiff held no official role.

Furthermore, the numbered company was an undischarged bankrupt and also lacked the capacity to sue, which could not be cured by substituting the company as the plaintiff.

Consequently, the court struck the statement of claim in its entirety without leave to amend and dismissed the action.

The court considered an application by Aggregated Investments Inc. for the appointment of a receiver over the assets of the respondents, including real property, under the Courts of Justice Act and the Bankruptcy and Insolvency Act.

The application was dismissed.

The court found that a bona fide defence existed regarding the underlying debt, specifically whether Aggregated breached its duty of good faith by accepting a reduced recovery and shifting value to a related party.

The court held that the appointment of a receiver was not just or convenient in the circumstances, given the triable issue as to the propriety of the debt and the conduct of Aggregated.

This decision is an appeal by Alan Saskin from the order of Associate Justice Ilchenko, sitting as Registrar in Bankruptcy, refusing an absolute discharge and imposing conditions under the Bankruptcy and Insolvency Act.

The court reviews the procedural history, the evidence, and the legal standards for discharge, including the meaning of "moral blameworthiness" under s. 173(1)(a) and the duties of a bankrupt under s. 173(1)(o).

The appeal is dismissed, with the court finding no error in the Registrar's factual or legal conclusions.

This endorsement addresses a motion by the City of Toronto and Adam Vaughan, creditors of 1631651 Ontario Inc., seeking an order that the assignment in bankruptcy does not take precedence over a prior order for payment and directing the Accountant to release funds to their counsel.

The court reviews the application of section 70(1) of the Bankruptcy and Insolvency Act and considers relevant case law from other jurisdictions and Ontario.

The motion is adjourned to allow further submissions on Ontario authorities.

The plaintiff, Chicago Title Insurance Co., sought compliance with a prior order requiring the defendants, Lukas Gabor and Katarina Rybarova, to attend judgment debtor examinations.

After initial non-attendance, only Ms. Rybarova appeared and provided undertakings, some of which remain outstanding.

Mr. Gabor subsequently attended but then made an assignment into bankruptcy, resulting in a stay of proceedings against him.

The court adjourned the motion sine die as against Mr. Gabor and scheduled a case conference with Ms. Rybarova to address outstanding undertakings and the issue of costs.

This decision concerns an appeal by Zeifman Partners Inc., as Trustee in Bankruptcy of Oragin Foods Inc., from the disallowance by KPMG Inc., as Trustee in Bankruptcy of Organic Garage (Canada) Ltd., of a proof of claim for $6,760,280.89.

The claim was based on alleged intercompany loans and a note payable.

The court allowed the appeal in part, admitting the "Current Liability Component" ($2,917,423.11) as a proven unsecured claim, but dismissed the appeal regarding the "Long Term Liability Component" and "Note Payable Component" finding insufficient evidence that these were debts rather than equity contributions.

The decision provides a detailed analysis of the distinction between debt and equity in the context of related-party transactions in insolvency, and the applicable standards of review.

On an initial CCAA application following an NOI filed two days earlier under the BIA, the court granted relief to permit an insolvent trenchless construction group to continue restructuring as a going concern.

The court held that continuation under the CCAA was consistent with the remedial purposes identified in Century Services, and that an initial stay, extension of the stay to a non-applicant affiliate, temporary protection against calls on performance bonds, DIP financing, administration and directors’ charges, CRO approval, and critical supplier payment authority were all reasonably necessary.

The court also granted a lien regularization order tailored to ongoing construction projects, finding it preserved cash flow while substituting a court-supervised claims process that maintained lien claimants’ substantive rights.

The application was supported by the proposed monitor and senior secured lender, and was not opposed by the surety.

The court dismissed Farm Credit Canada's application for the appointment of a receiver over the assets of Kapital Produce Ltd. and related companies.

The court found that, although there were alleged events of default under the credit agreement, most were cured within the required period and did not constitute actionable defaults.

The court held that the appointment of a receiver was not just or convenient in the circumstances, given the significant value of the security held by FCC, the lack of evidence of irreparable harm or risk to the assets, and the Debtors' ongoing efforts to resolve the indebtedness.

This endorsement approves the Monitor's motion for a Second Omnibus Credit Bid Vesting Order and a Second DIP Allocation and Orderly Liquidation Mechanics Order in the restructuring proceedings of Balboa Inc. and related applicants under the Companies' Creditors Arrangement Act.

The court finds the proposed sale transactions, lease assignments, DIP allocation, and liquidation mechanics to be fair, reasonable, and in the best interests of stakeholders, and extends the stay of proceedings to August 31, 2025.

The Receiver sought an order for discharge and release, approval of its Third Report, statement of receipts and disbursements, and fees.

The Court declined to grant the discharge, citing CBJ’s unauthorized commencement of actions in Ontario and Alberta in breach of the Receivership Order.

The Court found CBJ’s disregard for court orders troubling and noted the lack of contrition or proper procedure to regularize its actions.

The motion for discharge was adjourned to allow for a more complete record and for the Receiver to advise on the value of the Ontario and Alberta actions to the estate.

This decision concerns the approval of a plan of arrangement under section 192 of the Canada Business Corporations Act for Sherritt International Corporation and 16743714 Canada Inc. The plan involves the exchange and restructuring of certain debt obligations, including Senior Secured Notes and Junior Notes, to stabilize the company’s financial position.

The court reviews the statutory and fairness requirements for approval, considers objections, and ultimately finds the arrangement fair and reasonable, granting the final order.

The court considered a motion by msi Spergel Inc., as Administrator, for approval of Danny Angelatos’s consumer proposal under the Bankruptcy and Insolvency Act.

Canadian Tire Bank opposed, arguing Angelatos was not eligible because his assets exceeded his liabilities and creditors were willing to make arrangements outside the proposal.

The court found Angelatos met the definition of “insolvent person” under the BIA, as he was unable to meet his obligations as they became due, and distinguished the authorities relied on by the Bank.

The court also found the proposal was reasonable and fair to both debtor and creditors, given the family’s circumstances and the creditors’ approval.

The proposal was approved, and costs awarded to the Administrator.

The applicant, Waygar Capital Inc., as agent for Ninepoint Canadian Senior Debt Master Fund LP, sought the appointment of a receiver over the property of the respondents, El Mocambo Entertainment Inc. and related companies, under section 243 of the Bankruptcy and Insolvency Act and section 101 of the Courts of Justice Act.

The court reviewed the legal test and relevant factors for appointing a receiver, including the rights of secured creditors and the conduct of the parties.

Although the respondents did not oppose the application, the court, with the parties' agreement, adjourned the receivership to allow the proposed receiver to act as monitor for a short interim period to explore the possibility of maintaining the business as a going concern.

The application may be brought back on an urgent basis if necessary.

The Applicants sought approval of a Restructuring Framework Agreement (RFA) in ongoing CCAA proceedings.

The Court declined to approve the RFA, finding it neither necessary nor appropriate at this time.

The decision details the reasons for refusing approval, including concerns about the appropriateness of granting control and veto rights to the Lenders, the lack of disclosure of the Budget, and the sufficiency of existing court and Monitor oversight.

The Court also set out directions for ongoing cash flow monitoring and reporting by the Monitor.

Following a family law trial where the applicant was awarded child support and substantial costs, the respondent immediately filed for bankruptcy.

The applicant brought a motion seeking to allocate a portion of the trial cost award as legal fees related to child support so that the debt would survive bankruptcy under the Bankruptcy and Insolvency Act.

The court determined that the issues of decision-making and parenting time were inextricably linked to child support.

Ultimately, the court granted the motion, declaring that 75% of the trial costs constitute a support debt and are enforceable as a support order.

The Applicants, The Cannabist Company Holdings (Canada) Inc. and 16834434 Canada Inc., sought an interim order under section 192 of the Canada Business Corporations Act (CBCA) to approve a plan of arrangement and to direct the holding of a meeting of Senior Noteholders.

The Court granted the interim order, finding the Applicants acted in good faith and met the statutory requirements.

The Court also approved the classification of all Senior Noteholders as a single class for voting purposes, rejecting the respondent's argument for separate classes.

The order included a limited stay of proceedings and set out the process for the upcoming meeting and final order hearing.

This decision concerns the ongoing Companies’ Creditors Arrangement Act (CCAA) proceedings involving Hudson’s Bay Company ULC and related entities.

The Court addresses the extension of the stay of proceedings, approval of a liquidation sale, lease monetization process, and a sales and investment solicitation process (SISP).

The Court also considers the repayment of the DIP facility, approval of a Key Employee Retention Plan (KERP), and a sealing order for confidential employee information.

The Court grants most of the relief sought, defers approval of the Restructuring Support Agreement to allow further stakeholder review, and provides detailed reasons for each order.

The court granted a bankruptcy order against Thomas Dylan Suitor, finding that the applicant, The Fuller Landau Group Inc. (as Receiver of The Lion’s Share Group Inc.), established the necessary statutory requirements under the Bankruptcy and Insolvency Act.

The court found that Mr. Suitor was personally liable under promissory notes as both borrower and guarantor, that he owed debts exceeding $1,000, and that he had ceased to meet his liabilities generally as they became due.

The court also found the existence of multiple creditors and/or special circumstances justifying the order, and declined to exercise its discretion to refuse the order.