Sean Zweig

The debtor applicants sought court approval for a pre-packaged sale ('quick flip') of their assets to a new company owned by existing management, pursuant to section 36 of the CCAA.

The proposed transaction was supported by the senior secured creditor but opposed by a subordinate secured creditor, BDC Capital Inc., who was excluded from the sales process and given minimal notice.

The Superior Court of Justice dismissed the motion, finding that the debtor failed to meet its burden under sections 36(3) and 36(4) of the CCAA.

The court held that the sales process lacked transparency, failed to make good faith efforts to sell to unrelated parties after the senior debt was purchased at a discount, and did not demonstrate that the proposed consideration was superior to other potential offers.

A self-represented litigant in a complex CCAA proceeding brought a motion requesting that all proceedings involving him be conducted entirely in writing as an accommodation for his documented disabilities (ASD, ADHD, and Dyslexia).

The court balanced the litigant's accommodation needs against the rights of other stakeholders and the need for real-time litigation in restructuring proceedings.

The court denied the blanket request for all future hearings to be in writing, finding it would cause undue hardship and prejudice to other parties.

However, the court directed that the litigant's specific motion regarding his proprietary claims to certain assets proceed entirely in writing, subject to a strict timetable.

Corus Entertainment Inc. and 17311737 Canada Inc. sought and obtained a preliminary interim order in connection with a proposed arrangement under the Canada Business Corporations Act.

The court granted a stay of rights and remedies against the Corus Entities until December 18, 2025, to provide breathing space for the applicants to finalize definitive documentation for a recapitalization transaction.

The transaction is designed to significantly reduce the company's debt and annual cash interest costs while extending maturity dates.

The applicants demonstrated compliance with statutory requirements and good faith in pursuing the arrangement following a formal strategic review.

The stay does not affect obligations to trade creditors, suppliers, customers, or employees.

In a Companies' Creditors Arrangement Act proceeding, the applicant Hudson's Bay Company ULC and related entities sought approval of an Art Collection Auction Process Order to authorize the auction of artwork and artifacts held by the company.

The court approved the proposed auction procedures, which included both live and online auction components.

The court noted that certain items were excluded from the auction, including the Royal Charter, artifacts previously donated to the Manitoba Museum, the company's reference collection donated to the Archives of Manitoba, and war memorials.

Additionally, 24 artifacts believed to be of Indigenous origin or representative of Indigenous culture were excluded from the auction and would be donated to appropriate custodians in consultation with Indigenous communities.

The court found that the proposed procedures satisfied the applicable legal tests and represented the most appropriate process for disposing of the art collection while balancing the interests of creditors with cultural and historical considerations.

This endorsement grants an unopposed application by RioCan Real Estate Investment Trust and related entities for the appointment of FTI Consulting Canada Inc. as receiver over the assets of the RioCan-HBC joint venture entities.

The court reviews the legal test for appointing a receiver under the Bankruptcy and Insolvency Act and the Courts of Justice Act, referencing relevant case law and statutory factors.

The receivership is found to be just and convenient in light of the joint venture’s financial distress, the failure of restructuring efforts, and the need to preserve and maximize value for stakeholders.

The order authorizes the receiver to borrow up to $20 million and provides for allocation of costs and a mechanism for secured lenders to terminate the receivership as to their collateral.

The decision addresses motions regarding the appointment of representative counsel for current and former employees and retirees of Hudson’s Bay Company ULC and related entities in ongoing Companies’ Creditors Arrangement Act (CCAA) proceedings.

The Court declined to appoint any of the nominated law firms as representative counsel at this stage, instead appointing the Honourable Herman Wilton-Siegel as an independent third party to evaluate proposals and make a recommendation.

The Court also approved amendments to the Sale and Investment Solicitation Process (SISP) to remove the company’s art and artifact collection from the SISP and to appoint Heffel Gallery Limited to conduct a separate auction for the collection, subject to further court approval of procedures.

The reasons review the legal framework for appointing representative counsel and the importance of balancing stakeholder interests in complex insolvency proceedings.

This endorsement grants a brief adjournment in the Companies’ Creditors Arrangement Act (CCAA) proceedings involving Hudson’s Bay Company ULC and related entities, following ongoing discussions between the applicants and stakeholders.

The court extends the stay of proceedings, increases the Directors’ Charge, amends the relative priorities of charges, and approves the engagement of Reflect Advisors, LLC as financial advisor.

The court finds the requested relief appropriate, unopposed, and supported by the Monitor, and orders the requested amendments to the Initial Order.

The Court-appointed Receiver brought a motion for an Approval and Vesting Order (AVO) to sell real property, and for a Distribution and Discharge Order.

The debtor opposed the sale, arguing the purchase price was improvident and presenting a higher late offer.

The court applied the Soundair test and found the Receiver conducted a fair, court-approved sale process, making sufficient efforts to obtain the best price.

The court granted the AVO, approved the Receiver's activities and fees, and granted a temporary sealing order over confidential property value information.

The court determined the priority dispute between KingSett Mortgage Corporation's 2022 mortgage and various construction liens against the Debtors' property, which was in receivership.

The Receiver brought the motion to clarify "Priority Payables" under a court-approved sale agreement.

The court found that the 2022 KingSett Mortgage had priority over the construction liens, except to the extent of any deficiency in the statutory holdbacks, applying sections 78(2) and 78(6) of the Construction Act.

The court rejected the lien claimants' arguments that the mortgage did not qualify for priority under these sections and that the Receiver acted inappropriately.

The Receiver sought orders to approve a construction management contract and related financing for the Heart Lake Project, and to authorize amendments or disclaimers of pre-sale agreements for the Uptowns Project.

The court granted the relief, finding it was the best path to maximize stakeholder recovery, noting that the proposed amendments to pre-sale agreements offered homebuyers an option to retain value or claim deposits from a surety policy, and that disclaiming agreements was necessary for financing and project completion.

The court also approved sealing certain financial information to protect future marketability.

In a Companies’ Creditors Arrangement Act (CCAA) proceeding, the DIP Lender, Cortland Credit Lending Corporation, sought a case management order to schedule a threshold motion.

The motion aimed to determine the legal priority of Cortland's claims over those of Final Bell Corp., which had amended its claim to seek a constructive trust that could prime the DIP charge.

The CCAA Applicants supported the motion, arguing it would avoid further delays to the Stalking Horse Purchase Agreement approval.

Final Bell Corp. opposed, viewing it as an unfair mid-trial motion for partial summary judgment.

The court, exercising its broad discretion as the supervising CCAA court, granted the motion, directing that the threshold issue of legal priority be determined first to minimize costs and maximize efficiency, finding no prejudice to Final Bell Corp.

The applicant, CURO Group Holdings Corp., as Foreign Representative, sought a Third Recognition Order under section 49 of the Companies’ Creditors Arrangement Act (CCAA) to recognize and enforce several orders of the U.S. Bankruptcy Court.

These orders included the Combined Order approving the Debtors’ Joint Prepackaged Plan, the Estimation Order, and the Second Interim Cash Management Order.

The motion also sought termination of the Canadian Recognition Proceedings, discharge and release of the Information Officer, and approval of the Information Officer's reports and fees.

The relief sought was unopposed, and the court granted the Third Recognition Order, finding no public policy reason to deny recognition.

1000093910 Ontario Inc., a company in receivership, appealed the motion judge’s decision to decline hearing its cross-motion and to grant the receiver’s proposal for a public auction of its primary asset.

The cross-motion sought to vary the receivership order and enforce an earlier agreement of purchase and sale (APS).

The Court of Appeal dismissed the appeal, finding that the motion judge's discretionary decision not to hear the cross-motion was not erroneous, given the appellant's late service of materials and the low chance of success for the earlier APS.

The court also found no error in principle in the motion judge's approval of the receiver's proposed sales process, which included a "stalking horse" agreement, as it was fair, transparent, and aimed at optimizing the asset's price.

The applicant, KingSett Mortgage Corp., sought the appointment of KSV Restructuring as receiver over the property of the debtors, Mapleview Developments Ltd., Pace Mapleview Ltd., and 2552741 Ontario Inc., due to default on significant loan facilities.

The application also requested super priority charges for the receiver and a borrowing charge.

The debtors did not appear, but their principals/guarantors and other creditors/lienholders were represented and did not oppose the relief.

The court applied the "just or convenient" test under the Bankruptcy and Insolvency Act and the Courts of Justice Act, finding that the contractual right to appointment and the circumstances of the default made the receivership appropriate.

The application was granted, and the proposed order, consistent with the Commercial List Model Order, was approved.

This endorsement addresses a comeback hearing in a Companies' Creditors Arrangement Act (CCAA) proceeding.

The applicants, BZAM Ltd. and its affiliates, sought an amended and restated Initial Order to extend the stay of proceedings until May 25, 2024, increase the DIP loan to $41 million, and raise the maximum amounts for the Administration, DIP Lender's, and Directors' Charges.

They also sought approval for a Sales and Investor Solicitation Process (SISP), including a Stalking Horse Purchase Agreement and associated Bid Protections Charge.

The court granted all requested relief, noting that the motions were unopposed and supported by key creditors and the Monitor.

The judge found the applicants acted in good faith and with due diligence, and that the extensions and increased charges were necessary and appropriate, including a significant Directors' Charge for excise tax exposure.

The SISP, including the related-party Stalking Horse Bid and reverse vesting structure, was approved as fair, transparent, commercially efficacious, and optimizing asset value.

The court also addressed a potential future claim for rescission by Final Bell Holdings International, emphasizing the need for clarity in the sales process.

The Applicants, a group of affiliated cannabis companies, sought and were granted an initial order under the Companies’ Creditors Arrangement Act (CCAA) due to insolvency and an urgent liquidity crisis.

The court declared them eligible for CCAA protection, appointed FTI Consulting Canada Inc. as Monitor, approved a debtor-in-possession (DIP) credit facility of up to $2.4 million for initial working capital, granted a 10-day stay of proceedings, extended the stay to non-applicant affiliated entities and their directors/officers, approved administration and directors' charges, and provided relief from certain securities reporting obligations.

The court found Ontario to be the chief place of business, establishing jurisdiction.