Sharon Kour

The applicants, QM GP Inc. and Highpoint Environmental Services Inc., sought an initial order under the Companies' Creditors Arrangement Act and a lien regularization order.

The applicants sought protection to address acute liquidity crisis, interim financing, and relief to stabilize operations.

The court granted the initial order with certain modifications, approving interim debtor-in-possession financing, appointment of a monitor, administration and directors' charges, and a lien regularization order.

The court also granted a temporary stay on performance bond calls and certain indemnity obligations, with the Kingsdale Letter of Credit issue deferred to the comeback hearing.

The applicants, a group of companies undergoing CCAA proceedings, sought to extend the existing stay of proceedings to DAK Capital Inc., a non-debtor third-party guarantor involved in an arbitration with Canopy Growth Corporation.

Canopy opposed, arguing that CCAA s. 11.04 prohibits such an extension for guarantors.

The court, relying on the broad inherent jurisdiction under CCAA s. 11 and recent Ontario precedents, found that s. 11.04 is a clarifying provision, not a prohibitive one, and granted the temporary stay against DAK Capital to prevent distraction from the ongoing restructuring efforts.

The Applicants in a CCAA proceeding sought a Funding Contribution and Turn-Over Order to compel various financiers to contribute to a $40 million wind-down cost, an extension of the stay period, and approval of a Key Employee Retention Plan (KERP).

The court declined the Funding Order and KERP, finding that CCAA section 11.01(b) prohibits compelling new money advances from stakeholders, and that securitization parties are differently situated with assets excluded from the debtor's property.

The court did grant a shorter extension of the stay of proceedings.

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.

In the context of CCAA proceedings for a land lease community, the senior secured lender brought a motion to appoint a receiver.

The CCAA stay of proceedings was expiring, DIP financing was exhausted, and no viable restructuring plan or purchaser had emerged.

The court found it just and convenient to appoint a receiver to stabilize the community, ensure continuation of essential water and sewage services, and facilitate a credit bid by the secured lender.

A separate unopposed motion to lift the stay to allow repossession of unused modular homes was also granted.

The Moving Parties (First Nations and Municipalities) sought to stay the implementation of a $150 million settlement between Purdue Canada and Canadian Governments, arguing it might be unlawful, prejudicial, preferential, or an abuse of process, and sought financial disclosure from Purdue Canada.

The court dismissed the motion, finding it lacked a basis to compel disclosure or stay the settlement.

The court affirmed its jurisdiction over Purdue Canada was limited to the CCAA recognition proceedings, not general supervision, and found no evidence of bad faith or insolvency to warrant the requested orders.

The Applicants, Fresh City Farms Inc. and Mama Earth Organics Inc., sought approval for a reverse vesting order related to a share subscription agreement with their DIP Lender, who was also the proposed purchaser.

This transaction aimed to preserve the business as a going concern, including non-transferable assets like tax losses and licenses, after an unsuccessful Sale and Investor Solicitation Process (SISP).

The motion also sought third-party releases, an extension of the stay period, approval of the Monitor's reports and fees, and an order compelling Stripe Payments Canada, Ltd. to remit withheld funds.

The court granted all requested relief, finding the transaction fair and reasonable, the reverse vesting structure appropriate given the circumstances (highly regulated environment, non-transferable assets), and the releases justified.

The court also found Stripe's withholding of funds to be in breach of the initial order and critical to the applicants' cash flow, ordering their remittance.

The appellants appealed an approval and vesting order that authorized a receiver to sell a property in receivership.

One of the appellants, a second mortgagee, sought to redeem the first mortgage or be recognized as a successful creditor bidder, arguing an absolute right to redeem under the Mortgages Act.

The Court of Appeal dismissed the appeal, affirming the motions judge's decision that the right to redeem is qualified once a court-approved sales process has been undertaken in a receivership.

The court emphasized balancing the right to redeem against the integrity of the court-supervised sales process, finding no error in the motions judge's conclusion that the sales process was fair and the balance favoured its integrity.

The court-appointed Administrator of an estate brought a motion to appoint an investigator to review the accounts and assets of two intertwined family estates.

The estates had been mired in years of acrimonious litigation among the sibling beneficiaries, with allegations of breached fiduciary duties and misappropriated funds.

Finding that the accounts were complex, significant information was missing, and the parties were highly dysfunctional, the court granted the motion and appointed the investigator to provide a neutral analysis.

In a CCAA restructuring proceeding, the applicant debtors brought a motion to extend phase 2 of the Sale and Investment Solicitation Process (SISP), increase the DIP loan limit, approve a Key Employee Retention Plan (KERP), and extend the stay of proceedings.

The primary secured creditor opposed the motion, arguing the debtors had already had their chance at restructuring.

The court balanced the potential prejudice to the secured creditor against the public interest in preserving jobs and the debtors' role in serving remote communities.

The court granted partial relief, approving a modest DIP loan increase of $170,000, a KERP of $70,000, and a shorter SISP extension to March 21, 2023, while denying the stay extension at this time.

The court-appointed receiver brought a motion for an approval and vesting order (AVO) to sell a real estate development property to a third-party purchaser.

A second mortgagee and joint venture participant brought a cross-motion to redeem the property or, alternatively, for approval of its credit bid.

The court dismissed the cross-motion, finding that allowing a redemption after a court-approved sale process had concluded would undermine the integrity of the process.

The court granted the receiver's motion, holding that the proposed sale satisfied the Soundair principles, as the receiver acted providently, considered all stakeholders' interests, and conducted a fair and commercially efficacious process.

The applicants, operating an aircraft maintenance business in Northern Ontario, sought an initial order under the CCAA due to financial distress exacerbated by the COVID-19 pandemic.

The court granted the initial order, including a 10-day stay of proceedings, approval of a $600,000 DIP loan, an administration charge, and a directors' charge.

The court also appointed MNP as Monitor, permitted payment of pre-filing amounts to critical suppliers, and granted a sealing order for confidential appraisals to preserve value during the restructuring process.

The Receiver brought a motion to extend the appointment of limited partner advisory committees, approve its activities, and approve a process for appointing Representative Counsel for the Unitholders.

The Ad Hoc Committee of Retail Investors raised concerns about the independence of the proposed appointment process.

The court approved the Receiver's activities and the extension of the committees, but modified the Representative Counsel appointment process to include an independent third party to evaluate proposals and make a recommendation to the court.

The Receiver brought a motion for an order approving a proposed sale and investment solicitation process (SISP) and authorizing the disclosure of Borrower Information to Qualified Bidders.

The court found that the proposed SISP satisfied the test for approval, as it was fair, transparent, and optimized the chances of securing the best price.

The court also authorized the disclosure of Borrower Information, finding that the best interests of investors could be jeopardized without such disclosure, and noting that all borrower concerns had been resolved and confidentiality obligations would apply to bidders.

The motion was granted.

Bella Senior Care Residences Inc. (Bella) sought a declaration that certain correspondence and evidence related to discussions with The Canada Life Assurance Company (Canada Life) and Stonebridge Financial Corporation (Stonebridge) were admissible and not protected by settlement privilege.

Canada Life asserted settlement privilege over these communications, which concerned Bella's defaults under a Credit Agreement and Canada Life's subsequent demands.

The court applied a three-part test for settlement privilege, finding that while a litigious dispute existed, Canada Life's communications did not constitute genuine attempts to negotiate a settlement but rather ultimatums to enforce or expand its rights.

Consequently, the court declared the documents not subject to settlement privilege and allowed Bella's motion, awarding costs.

The applicant, U.S. Steel Canada Inc. (USSC), sought multiple orders under the Companies’ Creditors Arrangement Act (CCAA) to facilitate a proposed plan of arrangement and compromise.

The motions included approval of a supplementary claims process for previously excluded claims, authorization to convene creditor meetings and approve creditor classification for voting on the Plan, approval of amendments to the CCAA Acquisition and Plan Sponsor Agreement and a Support Agreement, and an extension of the stay of proceedings.

The Plan contemplated the acquisition of USSC's operating business by Bedrock Industries Canada LLC.

The motions were largely unopposed and supported by key stakeholders, including the Province of Ontario, United States Steel Corporation, and the Monitor.

The court granted all requested orders, finding the claims process fair, the Plan not doomed to failure, the creditor classification appropriate, and the agreements and stay extension necessary for the restructuring.

In the CCAA proceedings of U.S. Steel Canada Inc., its parent company, United States Steel Corporation, sought approval of several proofs of claim totaling over $2 billion.

Various stakeholders objected, arguing that the intercompany loans should be re-characterized as 'equity claims' under the CCAA and that the security granted for certain advances was void as a fraudulent preference or unenforceable for lack of consideration.

The court rejected the objections, finding that the parent company had a reasonable expectation of repayment when the advances were made, and that the security was validly granted for fresh consideration and did not constitute a fraudulent preference.

The claims were confirmed as debt claims.