The Applicants, a group of Essar Steel Algoma entities, brought two motions in their CCAA proceedings: (i) for approval of a DIP extension agreement with existing DIP lenders, and (ii) for the appointment of a restructuring committee.
The DIP extension was opposed by various stakeholders including the USW, retirees, and GIP Primus, LP, who argued against the short term and potential leverage of the existing DIP lenders who were also Term Lenders.
The court dismissed the DIP extension motion, finding it would not enhance the prospects of a viable restructuring outcome, citing concerns about the alignment of interests between DIP and Term Lenders and the short-term nature of the proposed extension.
The motion for a restructuring committee was also dismissed, as the court found it would create unnecessary overlap with the existing Chief Restructuring Advisor and would not effectively address the core issues preventing restructuring, primarily labour negotiations.
