Steven Leonard Graff

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.

The moving parties (debtors) sought leave to appeal under s. 193(e) of the Bankruptcy and Insolvency Act from an order approving a court-appointed receiver's proposed sale process and list prices for five commercial properties.

The debtors argued the motion judge failed to apply the correct legal test (the Soundair test) and was unduly deferential to the receiver's business judgment.

The Court of Appeal dismissed the motion for leave, finding that the motion judge had implicitly applied the Soundair test, the proposed appeal lacked prima facie merit, did not raise an issue of general importance, and would unduly hinder the progress of the receivership proceedings.

In a CCAA proceeding involving a condominium project, the debtor sought to disclaim pre-sale agreements with unit purchasers.

The purchasers brought a motion for the production of an unredacted appraisal report referenced in the debtor's affidavit.

The court held that while the mandatory production requirement under Rule 30.04(2) is subject to discretion in CCAA proceedings, fairness and transparency required production of the unredacted report to the purchasers, subject to a non-disclosure agreement.

Cross-motions by a contingent creditor and real estate brokers for production of the reports were dismissed due to their lesser need and potential conflicts of interest.

The Superior Court of Justice considered a motion by BCIMC and Otera Capital to approve a Sale and Investor Solicitation Process (SISP) for three condominium projects (Yorkville, Clover, Halo) under receivership.

The court approved the SISP for the Yorkville project.

For the Clover project, the court declined to approve the SISP, affirming the debtor's right of redemption after Concord Land Developments acquired the debtor's shares and offered to pay out all BCIMC debt and receivership costs.

For the Halo project, the SISP was approved, but without a stalking horse bid and without restrictions on communication between bidders and stakeholders, as the debtor was not yet able to pay out the debt.

This proceeding involved competing applications for the appointment of a receiver and manager under the Bankruptcy and Insolvency Act and the Courts of Justice Act, and an application for protection under the Companies’ Creditors Arrangement Act (CCAA).

The applicants, secured creditors, sought receivership over three residential condominium projects (The Clover, Halo, and 33 Yorkville) due to significant financial irregularities, lack of transparency, and loss of confidence in the debtors' management.

The debtors opposed receivership and sought CCAA protection, proposing a share sale to Concord Group Developments and a plan to disclaim existing purchase agreements.

The court dismissed the CCAA application and granted the receivership application, finding that receivership was the preferable route.

The court emphasized the secured creditors' blocking position, the absence of a concrete CCAA plan, and the debtors' deliberate financial misconduct, which outweighed any potential benefits of a CCAA proceeding.

The moving parties, a company and its CEO, commenced a private prosecution against a court-appointed receiver under the Environmental Protection Act, alleging the receiver stored excess organic waste.

The receiver brought a motion to stay the prosecution, arguing the moving parties failed to obtain leave of the court as required by the receivership order and that the prosecution was an abuse of process.

The Superior Court of Justice held that a private prosecution is a 'proceeding' requiring leave under the receivership order.

The court refused to grant leave and stayed the prosecution, finding it was an abuse of process because the moving parties were attempting to relitigate the exact same allegations that had previously been dismissed by the Superior Court and the Court of Appeal in a prior motion for leave to sue the receiver.

A motion to set aside orders of a chambers judge denying leave to appeal.

The core issue was whether an appeal from a decision denying leave to sue a court-appointed receiver is governed by the Bankruptcy and Insolvency Act (BIA) or the Courts of Justice Act (CJA).

The receiver was appointed under both statutes.

The applicant argued that since the leave to sue provision could be grounded in provincial law under the CJA, the appeal should follow the CJA route, which permits appeals as of right within 30 days.

The respondent argued that the BIA governs because the receivership proceedings are BIA proceedings and the appeal provisions are in operational conflict.

The court held that the BIA governs the appeal route because the leave to sue provision is authorized by the BIA through necessary implication of section 243(1), and federal paramountcy applies to the conflicting appeal provisions.

A non-party to an application sought to transfer the proceeding and a related garnishment hearing from Kitchener to Toronto under Rule 13.1.02.

The court dismissed the motion, finding that the moving party was not a party to the application, the application had already been finally disposed of, and a garnishment hearing is a motion rather than a 'proceeding' subject to transfer under Rule 13.1.02.

The appellants appealed the disallowance of their claims in a bankruptcy proposal proceeding.

They claimed a 20% beneficial interest in the proceeds of a commercial property sale based on an amended trust declaration, and advanced an unsecured claim for damages alleging oppressive conduct.

The court dismissed the appeal, finding no certainty of intention to create an express trust, no basis for a constructive trust, and no evidence of oppressive conduct by the bankrupt corporation.

The moving party, Arden Holdings Inc., acquired the bankrupt's commercial lease pursuant to an assignment order under s. 84.1 of the Bankruptcy and Insolvency Act.

The lease contained a co-tenancy provision granting a rent reduction that was expressly stated to apply only so long as the bankrupt was the tenant.

The landlord argued this provision was personal and non-assignable.

The court held that under s. 84.1, the assignee steps into the shoes of the bankrupt and acquires all rights and obligations.

The court found the rent reduction was not personal by its nature, and the landlord's objection was out of time as it should have been raised prior to the assignment order being granted.

The law firm Crawley MacKewn Brush LLP (CMB) brought a motion seeking an order to be appointed as representative counsel for approximately 3,000 investors in the receivership of Crystal Wealth Management Systems Inc. The court-appointed Receiver, Grant Thornton Limited, and the Ontario Securities Commission opposed the motion, arguing that it would be duplicative of the Receiver's role and would result in unnecessary professional fees.

The court dismissed CMB's motion, finding that the Receiver was already adequately protecting and advancing the investors' interests, and that appointing representative counsel would add unnecessary expense without good reason.

The City of Sault Ste.

Marie moved for immediate payment of Essar Steel Algoma Inc.'s outstanding and future post-filing property tax obligations, totaling approximately $10.8 million post-filing.

The court considered Algoma's precarious financial position, volatility of steel prices, and upcoming capital expenditures, including a significant blast furnace stove replacement.

While dismissing the City's motion for immediate payment of arrears, the court ordered Algoma to pay $350,000 per month for ongoing property taxes, acknowledging the City's difficulties and Algoma's assessment appeal.

GIP Primus, L.P. and Brightwood Loan Services LLC ("GIP"), along with Portco, brought motions seeking orders for Essar Steel Algoma Inc. ("Algoma") to resume payments under a Cargo Handling Agreement, including arrears, and for a priority charge in the alternative.

The motions were based on section 11.01(a) of the CCAA, arguing that Portco provided critical services or licensed property.

The court dismissed the motions, reiterating previous findings that Portco did not provide services or a license, and that the arguments were previously decided.

The court also declined to grant a critical supplier charge under section 11.4 or the general discretion of section 11 of the CCAA, citing lack of application by the debtor, prior rulings, and potential breach of DIP loan terms and prejudice to other creditors.

The Nortel group of companies filed for insolvency protection across multiple jurisdictions.

Following the sale of Nortel's assets, approximately $7.3 billion was placed in escrow.

The trial judge ordered that these lockbox funds be allocated on a pro rata basis among the various debtor estates, finding that Nortel operated as a highly integrated multinational enterprise and that the master research and development agreement did not govern allocation upon insolvency.

Several parties sought leave to appeal under the Companies' Creditors Arrangement Act.

The Court of Appeal denied leave, finding that the proposed appeals were not prima facie meritorious, did not raise issues of significance to the practice, and would unduly hinder the progress of the proceedings.

The debtor filed a proposal under the Bankruptcy and Insolvency Act.

At the first meeting of creditors, the proposal trustee allowed several disputed creditors to vote, and the proposal was overwhelmingly defeated, resulting in a deemed assignment in bankruptcy.

The debtor appealed the trustee's decision, arguing the disputed creditors' claims should have been expunged due to unliquidated damages claims and equitable set-off.

The court dismissed the motion, finding the trustee correctly allowed the votes based on the record, and noted that the proposal would have been defeated even without the disputed votes.

In a receivership arising from CCAA proceedings, the moving party sought payment of post-filing collections on several assigned loans and the return of funds advanced for a failed loan transaction.

The court held the assigned loans had been absolutely and equitably assigned, and that the debtor acted only as collection agent.

Applying the constructive trust framework in Soulos, the court found the stay should preserve rather than reorder pre-filing proprietary rights, and that the post-CCAA collections could not be treated as estate property for general creditors.

The court also held the failed transaction advance was held for a specific purpose and remained subject to a trust obligation, with Quistclose trust principles supporting that result in the alternative.

The motion was granted, subject to a holdback for any amount owed by the moving party to a related entity.

In the context of CCAA proceedings for Priszm, the landlord (Scott's REIT) brought a motion claiming entitlement to the proceeds from the sale and assignment of various restaurant leases to third-party purchasers.

Scott's argued it had a proprietary interest in the lease consideration and that the secured creditor (Prudential) had subordinated its security interest to Scott's claim.

The court dismissed the motion, finding that the lease provisions created only an unsecured contractual obligation, not a proprietary interest.

Furthermore, the court held that the leasehold charge consents did not contain clear and unequivocal language demonstrating an intention by Prudential to subordinate its first-priority security interest to Scott's unsecured claim.

The court-appointed Receiver brought a motion for directions on whether the Auctioneer was entitled to a Buyer's Premium on a private sale of the debtor's assets.

The motion judge denied the premium because the Offer to Purchase contained an entire agreement clause and did not mention the premium.

On appeal, the Court of Appeal reversed the decision, finding that the Auction Service Agreement between the Receiver and the Auctioneer mandated the premium, and denying it would result in commercial absurdity and a windfall to the Receiver.

The appellants appealed an order granting them an adjournment on the condition of a limited draw against debtor-in-possession (DIP) financing.

The Court of Appeal dismissed the appeal, finding no error in the motion judge's order.

The court held that since the appellants sought the indulgence, the terms imposed were an entirely reasonable exercise of the motion judge's discretion.