Shahrzad Hamraz

The court was asked to decide between the debtors’ application for protection under the Companies' Creditors Arrangement Act (CCAA) and the Toronto-Dominion Bank’s application for the appointment of a receiver.

After reviewing the facts and arguments, the court concluded that it was most just and convenient to appoint a receiver, dismissing the CCAA application.

The decision reviews the history of the debtors’ restructuring efforts, the positions of the parties, and the legal principles governing the choice between CCAA and receivership, ultimately finding that the interests of the senior secured creditor should prevail in the circumstances.

In the context of CCAA proceedings, the applicants sought a Funding Order to compel Securitization Parties and other secured lenders to fund a $40 million wind-down of the remaining entities.

The court dismissed the motion for the Funding Order, finding that section 11.01(b) of the CCAA expressly prohibits orders requiring the further advance of money or credit.

Consequently, the court also declined to approve a Key Employee Retention Plan, as it was dependent on the unavailable funding.

The court did, however, grant a temporary sealing order for the KERP details and extended the stay of proceedings to November 29, 2024.

Nanopay Corporation, a startup providing embedded payment solutions, filed a Notice of Intention to Make a Proposal under the Bankruptcy and Insolvency Act (BIA).

The company moved for an extension of time to file a proposal, authority to borrow under a DIP (Debtor-in-Possession) credit facility, and approval to engage a Chief Restructuring Officer (CRO).

The court granted the motion, approving the DIP Term Sheet, appointing the CRO, and extending the proposal filing deadline to August 2, 2023, finding that the company acted in good faith and with due diligence, and no creditor would be materially prejudiced.

An interim limit was placed on initial DIP advances.