The Lexpert Guides to the Leading US/Canada Cross-Border Corporate and Litigation Lawyers in Canada profiles leading business lawyers and features articles for attorneys and in-house counsel in the US about business law issues in Canada.
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www.lexpert.ca | LEXPERT • December 2014 | 41 COURT-APPOINTED MONITORS sions regarding the allocation of the proceeds of the assets sale to the attention of the Québec Superior Court and to alert it to the possibility that the allocation methodology to be approved by the US Bankruptcy Court could favor Bear Island's estate to the detriment of creditors with claims against White Birch Canada. e monitor therefore asked the Québec Superior Court to order that a joint hearing between the US Bankruptcy Court and the Québec Superior Court be held to deal with the allocation of the proceeds of the assets sale. e Québec Superior Court noted that the allocation of the proceeds should not be the re- sult of a unilateral decision by it or the US Bankruptcy Court and that the fi nal allocation would probably have to be ratifi ed by both courts. 21 However, the Québec Superior Court decided that a joint hearing was not warranted at that point as the various stakeholders were still negoti- ating in order to arrive at a settlement of the allocation issue, which was apparently the case. us, the intervention by the monitor apparently forced the parties to come to a settlement that was acceptable to the Canadian creditors of White Birch. CONCLUSION We believe that any cross-border restructuring could benefi t from the intervention of an impartial offi cer of the court, such as the monitor, that can report to the court and the stakeholders in a completely neu- tral fashion about the debtor company's operations, transactions and fi nancial situation. Practitioners outside Canada who have experienced dealings with a monitor have said that its role is very successful and best serves the interests of all stakeholders. e deference given to the monitor by the court and the ethics shown by monitors have made this court offi cer a key player in any restructuring. We believe that this role enhances the process and facilitates restructuring. We also think that constant eff ort by the courts to promote cooperation in cross-border restructurings will allow the monitor to play an even bigger role in the years to come. 1 Section 11.7 (1) CCAA. 2 Section 24 CCAA. 3 Section 23 (1)(c) CCAA. 4 Section 35 CCAA. In addition, the company must comply with the duties set out in section 158 BIA. 5 Section 23 (1) (b) and (d) CCAA. 6 Idem. 7 Section 23 (1) (d) (i) CCAA. 8 For a review of the developments in the role of monitors, see Douglas I. Knowles, "To Liquidate or Restructure Under the CCAA? e Monitor's Confl icting Duties" (2006) Annual Review of Insolvency Law 95. 9 Section 23 (1)(h) CCAA. 10 Section 36.1 CCAA. 11 Ivaco Inc., Re, 2006 CanLII 34551, para. 55. 12 United Used Auto & Truck Parts Ltd. v. Aziz, 2000 BCCA 146. 13 Pine Valley Mining Corporation (Re), 2008 BCSC 446, paras. 9-18; Bell Canada International Inc. (Re), [2003] O.J. No. 4738, para. 8. 14 Mortgage Insurance Co. v. Innisfi l Landfi ll Corp., 1995 CanLII 7366, para. 5. 15 Bakemates International Inc. (Re), [2002] O.J. No. 3569, paras. 31-32; Bell Canada International Inc. (Re), [2003] O.J. No. 4738. 16 Bell Canada International Inc. (Re), [2003] O.J. No. 4738, para. 8. 17 SemCanada Crude Co. (Re), 2010 ABQB 531, para. 100. 18 For example, see Bakemates International (Re), [2001] O.J. No. 2024 (over- turned on appeal for other reasons). 19 Intertan Canada Ltd. (Re), 2009 49 CBR (5th) 232. 20 Re White Birch Paper Holding Company, 2010 QCCS 4915, appeal dismissed 2010 QCCA 1950. 21 Re White Birch Paper Holding Company, 2011 QCCS 5223. Christian Lachance is a partner in the Litigation and Financial Restructuring & Insolvency practices in Montréal. He specializes in bankruptcy and insolvency law, fi nancial restructuring and commercial litigation. Over the past few years, he has been involved in many domestic and cross-border complex and important restructur- ing cases. Christian Lachance Davies Ward Phillips & Vineberg LLP Tel: (514) 841-6576 Fax: (514) 841-649 clachance@dwpv.com Denis Ferland is a partner in the Financial Restructuring & Insolvency and Litiga- tion practices in Montréal. He specializes in bankruptcy and insolvency law, corporate reorganizations and commercial law, fi nancial services and commercial litigation. He has advised and represented many companies facing fi nancial diffi culties or reorgani- zations, as well as trustees, monitors and other stakeholders in insolvency, reorganization and bankruptcy. He has also acted for many multinational companies in domestic and cross-border restructurings. Denis Ferland Davies Ward Phillips & Vineberg LLP Tel: (514) 841-6423 Fax: (514) 841-6499 dferland@dwpv.com