Scott Alexander Bomhof

This decision concerns three motions to approve class counsel fees in the context of insolvency proceedings under the Companies' Creditors Arrangement Act involving three major tobacco companies.

The court approved the Quebec Class Action Plaintiffs' counsel fee request of approximately $901 million (representing 22% of the $4.119 billion allocated to the Quebec class members), the Knight Class Counsel fee request of $5 million plus disbursements, and the Tobacco Producers' counsel fee request of $3.75 million.

The court found that the fees were fair and reasonable given the exceptional risks assumed, the unprecedented outcome achieved, and the unique circumstances of the case.

A $50 million reserve was established from the Quebec counsel fees to protect against any pro-rata reduction in class member compensation due to actual take-up rates or other factors.

This decision sanctions the CCAA Plans of Imperial Tobacco Canada Limited, Imperial Tobacco Company Limited, JTI-Macdonald Corp., and Rothmans, Benson & Hedges Inc., effecting a global settlement of all tobacco-related claims in Canada.

The court reviews the structure, allocation, and fairness of the plans, including the creation of a $1 billion Cy-près Foundation, and addresses objections from social stakeholders.

The court finds the plans fair, reasonable, and in the public interest, and grants the requested relief, including third-party releases and the appointment of plan administrators.

This endorsement concerns a joint motion brought by the court-appointed Monitors for JTI-Macdonald Corp., Imperial Tobacco Canada Limited, Imperial Tobacco Company Limited, and Rothmans, Benson & Hedges Inc. in their ongoing Companies’ Creditors Arrangement Act (CCAA) proceedings.

The Monitors sought a Sanction Protocol Order to establish the date for the Sanction Hearing, ratify the litigation timetable, approve the dissemination of the Agenda and Sanction Hearing procedure, approve the Omnibus Sanction Hearing Notice, and set the deadline for Sanction Hearing Objection Notices.

The motion was unopposed and was granted by the court, with three orders signed.

This supplementary endorsement addresses a request from JTI-Macdonald Corp. regarding the adequacy of notice elements in the Claims Procedure Order within the ongoing Companies' Creditors Arrangement Act (CCAA) proceedings.

The court confirmed its satisfaction that the notice elements in the Claims Procedure Orders are reasonable in the circumstances, addressing an oversight from previous submissions.

The Superior Court of Justice addressed multiple motions within the complex Companies’ Creditors Arrangement Act (CCAA) proceedings of JTI-Macdonald Corp., Imperial Tobacco Canada Limited, Imperial Tobacco Company Limited, and Rothmans, Benson & Hedges Inc. The court granted a stay extension until January 31, 2025, and approved Meeting Orders and Claims Procedure Orders.

These orders facilitate the advancement of comprehensive Plans of Arrangement, developed by the court-appointed Mediator and Monitors, aiming for a Pan-Canadian global settlement of tobacco claims totaling $32.5 billion.

The court found the plans were not "doomed to fail" despite outstanding issues regarding financial allocation among the Tobacco Companies and the creditor status of JTI-Macdonald TM Corp.

The Monitor in a CCAA proceeding sought court approval for a complex transaction involving a reverse vesting order (RVO) structure for the sale of electricity generation facilities of the Validus Entities to Macquarie and Far North Power Corp. The motion also requested the addition of a new entity (Residualco) as a debtor, approval of the Monitor's reports and fees, and an extension of the stay period.

The court granted all requested relief, finding the transaction commercially reasonable and in the best interests of stakeholders, particularly due to the highly regulated nature of the business which made an RVO necessary to preserve numerous permits and licenses.

The court also confirmed the appropriateness of the releases granted to various parties involved in the restructuring.

KSV Restructuring Inc., as court-appointed Monitor and Receiver for the Validus Entities (a group of power generation companies), brought motions seeking approval of a Sales and Investment Solicitation Process (SISP), authorization to implement it, approval of a Stalking Horse Bid by Macquarie Equipment Finance Ltd. and Far North Power Corp., approval of bid protections (break fee and expense reimbursement), approval of an Unknown Contract Bar Process, approval of Monitor's reports, and an extension of the stay of proceedings.

Additionally, the Receiver sought to increase its borrowing limit.

The Validus Entities opposed certain terms of the SISP and the Stalking Horse Offer, arguing the quantum owed to Macquarie was overstated, unconscionable, violated the anti-deprivation rule, and raised concerns about HST treatment.

The court granted all relief sought by the Monitor/Receiver, finding the SISP fair and transparent, the quantum owed to Macquarie correctly calculated under the sale-leaseback agreements, the anti-deprivation rule not engaged as the default was contractual, and the HST issues appropriately deferred to a transaction approval motion.

The court emphasized the need for stability and timely action to maximize recovery.

The Bondfield Group, a major construction company, sought CCAA protection due to insolvency, over $1 billion in active contracts, and over 200 lawsuits.

The application was unopposed and resulted from extensive stakeholder negotiations.

The court granted an initial order for CCAA protection, including a stay of proceedings, approval of a tailored $8 million Debtor-in-Possession (DIP) facility funded by Zurich Insurance, an Administration Charge for professional fees, and a Directors' Charge for $3 million (excluding John Aquino).

The court emphasized the public interest in completing critical infrastructure projects and the preference for CCAA over receivership to preserve enterprise value.

This endorsement grants an order authorizing the Receiver to enter into an agreement related to a CCAA filing.

The order clarifies that it does not affect any claims or rights of unions and their related trust funds and members concerning unpaid wages and supplementary benefits under the Construction Act, including trust claims, lien rights, BIA claims, and WEPPA claims.

The Receiver's position is that Zurich, as the bonding company, is responsible for these valid claims, while Zurich reserves its rights.

JTI-Macdonald Corp. (JTIM) sought an Initial Order under the Companies’ Creditors Arrangement Act (CCAA) following a $13.5 billion judgment from the Quebec Court of Appeal and other significant health care costs recovery actions.

The court granted the Initial Order, including a stay of proceedings against JTIM and other defendants, appointment of Deloitte Restructuring Inc. as Monitor, approval of administrative, directors', and tax charges, authorization to pay pre-filing and post-filing obligations, appointment of Blue Tree Advisors Inc. as Chief Restructuring Officer, and authorization to appeal the Quebec Judgment to the Supreme Court of Canada.

The court found JTIM to be an insolvent company to which the CCAA applies, and that a stay of proceedings was appropriate to facilitate a collective solution for all stakeholders.

The Monitor of the Canadian Debtors of Nortel Networks sought court approval for two environmental property settlement agreements concerning the Belleville and Brockville properties under the Companies’ Creditors Arrangement Act (CCAA).

These settlements aimed to resolve significant environmental liabilities, crystallize claims, and facilitate further distributions to creditors.

The court granted the motion, approving both the MECP Belleville Settlement and the Brockville Settlement, finding them fair, reasonable, beneficial to stakeholders, and consistent with the CCAA's objectives, including the provision of third-party releases.

Self-represented long-term disability beneficiaries sought leave to appeal a sanction order from the Superior Court of Justice in the Nortel Networks CCAA proceedings.

The applicants challenged their binding status under the 2009 Representation Order for Disabled Employees and the 2010 Employee Settlement Agreement.

The Court of Appeal dismissed the motion for leave to appeal, finding that the stringent test for leave in CCAA proceedings was not met.

The proposed appeal lacked merit, the applicants were bound by the settlement agreement, and further delays in the protracted litigation were to be avoided.

The court also rejected a late-filed notice of constitutional question challenging sections 6(1) and 11 of the CCAA.

In proceedings under the Companies’ Creditors Arrangement Act, the court addressed scheduling issues for a complex multi‑party trial involving the allocation of assets among creditor groups.

The parties proposed deferring the trial from April 1, 2014 to April 28, 2014, but disagreement remained regarding whether the later date would be feasible.

The court concluded that maintaining the earlier date risked a chaotic trial and that a rolling start date would create further uncertainty.

To ensure certainty and orderly preparation, the court rescheduled the trial to begin May 12, 2014 for 20 days and set case management and trial management conferences.

The court also required all parties to provide comprehensive fee and disbursement summaries to monitor escalating litigation costs.

In ongoing proceedings under the Companies’ Creditors Arrangement Act, the applicants sought approval of an Employee Hardship Application Process and an extension of the stay of proceedings.

The requested hardship process was unopposed and approved.

Certain noteholders sought conditions requiring enhanced reporting and procedural safeguards in relation to the claims process and employee claims.

The court held that the statutory test under s. 11(6) of the CCAA was satisfied because the circumstances warranted the extension and the applicants had acted in good faith and with due diligence.

The stay extension was granted, while proposed procedural changes to the claims process were found more appropriately addressed through a motion to vary existing orders.

The applicant corporation sought relief under the Companies’ Creditors Arrangement Act including an initial order, a stay of proceedings, approval of a sale process, and authorization of administration and directors’ charges.

The court considered whether the corporation qualified as a debtor company and whether the requested restructuring steps were appropriate in the circumstances of significant financial distress and ongoing investigations.

The court accepted that the corporation was insolvent and that a restructuring under the CCAA was necessary to preserve enterprise value and explore a potential sale of business operations.

The court approved the requested charges, authorized the sale process, and granted ancillary relief including recognition proceedings in foreign jurisdictions.