In a Companies’ Creditors Arrangement Act (CCAA) proceeding, the applicants sought an Amended and Restated Initial Order (ARIO) to extend a stay of proceedings, approve debtor-in-possession (DIP) financing, and increase court-ordered priority charges.
A central issue was whether Ernst & Young Inc. (E&Y) should continue as Monitor, given that an affiliate had acted as the applicants' auditor within the two-year restricted period under CCAA s. 11.7(2).
The court granted the stay extension, approved the DIP financing, and increased the charges, finding these necessary for the restructuring.
However, the court denied E&Y's continuation as Monitor, emphasizing a stricter interpretation of CCAA s. 11.7(2).
The court found no "extenuating or unique circumstances" to override the general rule against appointing a former auditor within the restricted period, despite arguments of cost-effectiveness and existing knowledge.
FTI Consulting Canada Inc. was appointed as the new Monitor.
