Sean Zweig

Tacora Resources Inc. sought an amended and restated initial order (ARIO) and a solicitation order under the Companies’ Creditors Arrangement Act (CCAA) to facilitate its restructuring, including approval for a $75 million debtor-in-possession (DIP) financing facility from Cargill.

An ad hoc group of senior noteholders (AHG) opposed the Cargill DIP facility, alleging a flawed process and material prejudice, and brought a cross-motion for approval of their own competing DIP proposal.

The court found that Tacora's Board exercised reasonable business judgment in selecting the Cargill DIP facility, which was financially superior and less prejudicial to creditors overall than the AHG's proposal.

The court dismissed the AHG's cross-motion, finding no evidence of improper conduct by Cargill or the Board, and granted Tacora's requested ARIO and Solicitation Order, including approval of the Cargill DIP facility, an extended stay period, a Key Employee Retention Plan (KERP), and a sealing order for KERP details.

The court-appointed Receiver brought multiple motions seeking various forms of relief, including a declaration of vacant possession and writ of possession for a condominium unit (PH 07), approval and vesting orders (AVOs) for the sale of two specific condominium units (PH 02 and PH 03), prospective AVOs for five remaining units subject to sale conditions, approval of certain distributions from sale proceeds, approval of the Receiver's activities, and a sealing order for confidential appendices.

The applicant, KingSett Mortgage Corporation, and CIBC supported the relief.

The respondent, 30 Roe Investments Corp., represented by its president and personal guarantor, Raymond Zar, opposed some aspects, particularly the pre-approval of sales for remaining units without the debtor's consent and the immediate payment of HST.

The court granted most of the Receiver's requests, finding no lawful right for the occupant of PH 07, approving the sales under specific conditions, and approving distributions, with a temporary deferral on the HST payment issue to allow the respondent to provide supporting documentation.

Paladin Labs Inc., as foreign representative for itself and Paladin Labs Canadian Holding Inc. (the Canadian Debtors), brought a motion under section 46 of the Companies' Creditors Arrangement Act (CCAA) for recognition and enforcement of two orders granted by the United States Bankruptcy Court in their Chapter 11 cases: a Bidding Procedures Order and a Bar Date Order.

The motion was unopposed.

The court granted the motion, finding that recognition was consistent with principles of comity and Canadian public policy, and would enable the Canadian Debtors to proceed with the sale process to maximize asset value and ascertain claims.

The applicant, BBB Canada Ltd., sought court approval under the Companies' Creditors Arrangement Act (CCAA) for an Omnibus Assignment and Assumption of Leases, FF&E and Trade Fixtures Agreement with DKB Capital.

The motion also requested orders for the assignment of certain leases under section 11.3 of the CCAA and a temporary sealing order for the unredacted agreement.

The court found the marketing process comprehensive, the consideration fair and reasonable, and the agreement beneficial to stakeholders.

The assignments were unopposed.

The court applied the Sherman Estate test for the sealing order and found it appropriate given its limited scope and time.

The motion was granted in its entirety.

The Canadian Debtors, part of the global Endo pharmaceutical group, applied under Part IV of the CCAA for an interim order recognizing Chapter 11 proceedings commenced in the United States.

The court found that Ontario was the proper jurisdiction for the recognition proceedings due to the debtors' substantial business presence and security agreements governed by Ontario law.

The court granted the interim order, including a stay of proceedings in favour of the Canadian Debtors and affiliated non-applicant entities facing opioid-related class action litigation in Canada, to protect the operations of the Canadian business pending a full recognition hearing.

The Applicants brought an unopposed motion in their CCAA proceedings for an Amended and Restated Initial Order and an order approving a sale and investment solicitation process (SISP).

The court granted the requested relief, extending the stay period, increasing the Directors' and DIP Lenders' Charges, elevating their priority, and relieving the Applicants from incurring further expenses for certain Securities Filings.

The court also approved the SISP, noting appropriate precautions regarding information sharing with the Debenture Trustee.

A request by a litigation counterparty for a specific document preservation order was declined as unnecessary.

The applicants, a group of companies in the cannabis industry, sought an initial order under the Companies' Creditors Arrangement Act (CCAA) due to an urgent liquidity crisis.

The court found that the applicants were debtor companies under the CCAA and granted a stay of proceedings, extending it to certain non-applicant subsidiaries that were highly integrated into the business.

The court also approved a debtor-in-possession (DIP) loan and associated charge to fund operations during the initial 10-day stay.

Additionally, the court granted an administration charge, a directors' charge, authorized certain pre-filing payments, and postponed the ultimate parent company's annual general meeting.

The respondent, KingSett Mortgage Corporation, moved to quash an appeal brought by 30 Roe Investments Corp. from an order appointing a receiver over nine condominium units. 30 Roe argued it had an appeal as of right under s. 193(c) of the Bankruptcy and Insolvency Act and alternatively sought leave to appeal under s. 193(e).

The Court of Appeal granted the motion to quash, confirming that no appeal as of right exists from a receivership order under s. 193(c).

The Court also dismissed the motion for leave to appeal, finding the proposed appeal lacked merit, did not raise an issue of general importance, and would unduly hinder the receivership proceedings.

The applicant, a second mortgagee, sought the appointment of a receiver and manager over the respondent's real property due to a matured and defaulted mortgage loan.

The respondent requested a further adjournment to complete refinancing, which was denied due to a non-binding commitment letter and the respondent's lack of diligence in retaining counsel and pursuing refinancing.

The court found the appointment of a receiver to be just and convenient, particularly as the security documents contractually permitted such an appointment upon default.

The court rejected the respondent's claim of bad faith by the applicant.

The applicant brought a consent motion within its CCAA proceedings for approval of Sale Procedures and an extension of the Stay Period.

The court found the applicant acted in good faith and with due diligence, and granted the motion, extending the Stay Period to December 22, 2021, and setting a bid deadline of December 31, 2021.

The applicant, McEwan Enterprises Inc., sought an Amended and Restated Initial Order at a comeback hearing in its CCAA proceedings to extend the stay period and increase the administration and directors' charges.

A creditor opposed the motion, arguing the applicant should not be allowed to continue without a court-approved marketing and sale process and raising concerns about a proposed transaction.

The court granted the requested relief to allow the applicant to continue operations, finding the creditor's concerns raised arguable issues that were more properly addressed at an upcoming motion to approve the proposed transaction.

McEwan Enterprises Inc. (MEI), a restaurant and catering business, applied for an Initial Order under the CCAA due to financial challenges exacerbated by the COVID-19 pandemic.

The court found MEI to be a 'debtor company' under the CCAA and granted the Initial Order, including a stay of proceedings, authorization to pay certain pre-filing obligations, and the approval of Administration and Directors' Charges.

The court also extended the stay of proceedings to non-filing parties, including the founder Mark McEwan, to prevent disruption to the restructuring efforts.

However, the court declined MEI's request to dispense with the standard CCAA creditor notice provisions, citing the open court presumption.

The applicant debtors brought an unopposed motion to extend the time for making a proposal under the Bankruptcy and Insolvency Act.

The court granted the extension to June 12, 2020, finding that the criteria of good faith, diligence, lack of prejudice, and potential viability were met, with an improved outlook despite COVID-19 closures.

The decision also included observations on the conduct of virtual hearings during the COVID-19 emergency, emphasizing the importance of notice to all parties and upholding the open court principle, even when public interest is low or a sealing order is in place.

The court flagged the need for more robust solutions for public access to virtual hearings in the future.

The debtors, Eureka 93 Inc. and its subsidiaries, sought administrative consolidation of four related notices of intention to make a proposal, an extension of time to file proposals, and approval for interim priority financing (DIP financing) under the Bankruptcy and Insolvency Act.

The motion was opposed by Dominion Capital LLC, representing a group of noteholders, who argued there was no viable business to rehabilitate.

The Proposal Trustee supported the plan.

The court granted the motion, finding that immediate liquidation would have dire effects, while the extension and interim financing offered a prospect of increased value and a successful proposal, despite inherent risks in the cannabis industry.

The court imposed bi-weekly reporting requirements.

The applicants, Canadian affiliates of Bumble Bee Foods, sought an amended and restated initial order under the CCAA to stabilize their business and facilitate a coordinated restructuring and asset sale alongside US Chapter 11 proceedings.

The court considered the recent amendments to the CCAA, specifically s. 11.001, and found that the requested relief—including an extension of the stay of proceedings, DIP financing, payment of pre-filing obligations, a Key Employee Retention Plan (KEIP), and various court-ordered charges—was reasonably necessary for the continued operation of the business in the ordinary course.

The court granted the amended and restated initial order.

Her Majesty the Queen in right of Ontario sought to lift a stay on its $330 billion health care cost recovery action against three tobacco companies (JTI-Macdonald Corp., Imperial Tobacco, Rothmans, Benson & Hedges Inc.) and eleven co-defendants, which was imposed under CCAA proceedings.

Ontario proposed to temporarily stay the effects of any judgment.

The court dismissed the motion, emphasizing the need to preserve the status quo in CCAA proceedings to facilitate a global resolution of significant claims.

Allowing Ontario's action to proceed would alter the level playing field, distract from restructuring efforts, and impose significant costs, prejudicing other stakeholders.

The applicants, JTI-Macdonald Corp., Imperial Tobacco Canada Limited, Imperial Tobacco Company Limited, and Rothmans, Benson & Hedges Inc., sought protection under the Companies' Creditors Arrangement Act (CCAA) following a $13.5 billion judgment from the Quebec Court of Appeal and other ongoing litigation.

JTI-Macdonald Corp. and Rothmans, Benson & Hedges Inc. moved for orders to file Supreme Court of Canada (SCC) leave applications but suspend further proceedings.

Imperial Tobacco Canada Limited and Imperial Tobacco Company Limited sought a blanket stay of all proceedings and limitation periods.

The Quebec class action plaintiffs opposed the motions and sought to partially lift the stay.

The court affirmed its broad jurisdiction under CCAA s. 11 to stay all actions, including appellate proceedings and limitation periods.

The court dismissed the motion by JTI-Macdonald Corp. and Rothmans, Benson & Hedges Inc., and granted Imperial Tobacco's motion, finding that a blanket stay best preserved the status quo and facilitated a global resolution for all stakeholders.

A receiver sought to defeat an appeal from a court order approving the sale of real property (a residential condominium project for seniors) to Pinnacle International One Lands Inc. The appellant, Fortress, had competed for the property through a stalking horse bidding process and subsequently submitted competing offers.

The receiver accepted Pinnacle's offer.

Fortress appealed, relying solely on section 193(c) of the Bankruptcy and Insolvency Act, which provides an automatic right of appeal if property involved exceeds $10,000 in value.

The Court of Appeal held that the approval order did not "result in a loss" within the meaning of section 193(c) because the receiver could not have obtained a better deal than Pinnacle's offer.

The court found that Pinnacle's offer had superior practical value due to a higher deposit, all-cash financing, support from the first mortgagee, and the integrity of the sale process.

The Cadillac Fairview Corporation Limited appealed the partial disallowance of its claim by the trustee in bankruptcy of Danier Leather Inc. The core issue was whether occupation rent paid by a court-appointed receiver, acting as an agent for the trustee, could be deducted from the landlord's priority claim for accelerated rent under section 136(1)(f) of the Bankruptcy and Insolvency Act.

The court found that an agency relationship existed between the trustee and the receiver, and therefore, the occupation rent paid by the receiver was properly credited against the accelerated rent claim.

The appeal was dismissed.

The liquidator of an insolvent insurance company brought a motion to approve settlement agreements with two tobacco companies.

The settlements included a condition requiring court approval of releases that would bar third-party claims against the insurer.

Several provincial Crowns and class action representatives opposed the settlements, arguing they had direct statutory claims against the insurer and were not bound by the Winding-Up and Restructuring Act (WURA).

The court held that the WURA does not expressly or implicitly bind the Crown, nor did the Crowns waive immunity under the benefit/burden doctrine as they had not yet made claims in the liquidation.

The motion to approve the settlements was dismissed.