A summary of recent Canadian insolvency-focused court decisions.

KingSett Mortgage Corporation v. 30 Roe Investments Corp., 2022 ONCA 479

Does a debtor have an appeal as of right from a receivership order? KingSett advanced a non-revolving demand loan to 30 Roe of $1.875 million, which was secured, in part, by a second mortgage on nine residential condominium units owned by 30 Roe in a 397-unit…

Antchipalovskaia v. Guestlogix Inc., 2022 ONCA 454

How is reasonable notice calculated where an employee is fired then rehired immediately after a court-approved sale under the CCAA? The appellant was a technology company operating in the air travel space. The respondent first started her employment with the appellant in July 2011 as…

Re Vonic (Ontario Superior Court of Justice File No. 32-1983170)

What factors are relevant to the approval of a proposal trustee's fees in the absence of time dockets? The trustee applied for taxation of its Statement of Receipts and Disbursements for fees of $9,973.46 plus HST. The taxation raised the issue as to how a…

1057863 B.C. Ltd. (Re), 2022 BCSC 759

Can a party be forced to mediate its claim as part of a CCAA proceeding? The Petitioners owned and operated a pulp mill in Pictou County, Nova Scotia. On January 31, 2020, the Petitioners were required to shut down the mill, resulting in a complete cessation of their business…

1057863 B.C. Ltd. (Re), 2022 BCSC 876

What is the test for a stay extension that is opposed? The Petitioner, 1057863 B.C. Ltd., a British Columbia company, was the parent company of the other Petitioners. Together, the group operated a pulp mill in Pictou County, Nova Scotia. They also conducted related forestry…

Kim (Re), 2022 ONSC 2731

Can rising real estate prices impact a bankrupt's discharge? The Debtor filed an assignment in bankruptcy in October 2019. He was the sole registered owner of a residential property that he valued at $635,000. His secured debt totaled over $590,551.75. Based upon these assessments, as of…

Royal Bank of Canada v. Mundo Media Ltd., 2022 ONSC 2147

Is a receiver bound by an arbitration clause in an agreement it wishes to sue on? Mundo Media (“Mundo”), a company which carried on business in Canada and the US, was placed in receivership in April 2019. The appointment order authorized the Receiver to exercise…

Crowe Mackay & Company Ltd. v. 0731431 B.C. Ltd., 2022 BCCA 158

Can a law firm appeal an order requiring the repayment of professional fees in a bankruptcy? In three related bankruptcy proceedings and two related civil actions, the Trustee and its counsel (the “Law Firm”) filed notices of appeal from orders of the trial judge requiring…

Medcap Real Estate Holdings Inc. (Re), 2022 ONCA 318

In what circumstances should the court exercise its discretion to dismiss a bankruptcy application? The respondents brought an application for a bankruptcy order against the appellant, Medcap, pursuant to s. 43(1) of the Bankruptcy and Insolvency Act. The application judge granted the application and made a…