Tony Reyes

The applicant, a major Canadian toy retailer, sought an initial order under the Companies' Creditors Arrangement Act (CCAA) due to a liquidity crisis triggered by the bankruptcy filing of its US parent company.

The court granted the initial order, including a stay of proceedings to stabilize operations ahead of the holiday season.

The court also approved a debtor-in-possession (DIP) lending facility to replace existing secured debt and fund ongoing operations, while limiting the DIP lenders' enforcement rights to require court approval.

Provisions allowing the Monitor to pay pre-filing claims of critical suppliers and establishing charges for administration and directors/officers were also approved.

Payless Holdings LLC, as foreign representative for itself and other Chapter 11 Debtors, applied for recognition of its U.S. Chapter 11 proceedings as foreign main proceedings under the CCAA in Canada.

The application also sought recognition of certain First Day Orders and a stay of proceedings.

The court granted the Initial Recognition Order, finding the U.S. proceedings to be foreign main proceedings based on the integrated operations and U.S. center of main interest for the Canadian entities.

Certain stay provisions were also granted, with remaining issues adjourned.

The applicants, a group of Essar Steel Algoma entities under CCAA protection, moved for court approval of a Term Sheet with Cliffs Mining Company for the supply of iron ore pellets.

The motion was opposed by USW Locals and Algoma retirees, who sought disclosure of commercial terms and objected to provisions preventing disclaimer of the agreement and allowing Cliffs to terminate if an Essar Global entity acquired Algoma.

The court approved the Term Sheet, finding it beneficial for Algoma's restructuring by ensuring a stable and technically suitable iron ore supply.

The court dismissed the objections, emphasizing the urgency of approval, the confidentiality of pricing, and that the Term Sheet's provisions did not unlawfully fetter judicial discretion under CCAA section 32 or unduly prejudice stakeholders.

The trustee in bankruptcy moved for an order requiring the responding party to obtain leave to appeal an order approving an auction process.

The responding party argued that leave was not required under s. 193(c) of the Bankruptcy and Insolvency Act because the property involved exceeded $10,000.

The Court of Appeal held that the order was procedural in nature, did not bring into play the value of the debtor's property, and did not determine entitlement to sale proceeds.

Therefore, the responding party requires leave to appeal, which may be sought from the panel scheduled to hear the appeal.

The applicants sought an order sanctioning their Plan of Compromise and Arrangement under the Companies’ Creditors Arrangement Act (CCAA) and extending the stay period.

The Plan aimed to restructure the Pacific Group's indebtedness by approximately US $5.1 billion and maintain it as a going concern.

A Shareholder Consortium proposed an alternative recapitalization and refinancing proposal and requested an adjournment, which was opposed by the applicants and other stakeholders.

The court denied the adjournment, finding the alternative proposal a "last minute effort to de-rail" the restructuring.

The court sanctioned the Plan, finding strict compliance with CCAA requirements, good faith, and that the Plan was fair and reasonable, representing the best alternative available.

The court also approved third-party releases and granted a stay of proceedings for non-applicant parties, as well as extending the stay period.

In a receivership, the court gave advice and directions on competing claims to a travel lift between an owner-lessor and a secured lender with a general perfected security interest.

The court held that the lease was, in substance, a financing arrangement that secured payment for the equipment and therefore fell within s. 2(a) of the Personal Property Security Act.

Because the lessor failed to perfect its security interest, its claim was subordinate to the lender's perfected security interest under s. 20(1)(a)(i).

Any alleged pre-receivership termination of the lease, or contractual language purporting to end the debtor's rights on default, did not displace the prior-ranking secured creditor's rights under Part V of the PPSA.