Case information
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36778
Ad Hoc Group of Bondholders v. Ernst & Young Inc. in its capacity as Monitor, et al.
(Ontario) (Civil) (By Leave)
Docket
Judgments on applications for leave to appeal are rendered by the Court, but are not necessarily unanimous.
| Date | Proceeding | Filed By (if applicable) |
|---|---|---|
| 2016-05-10 | Close file on Leave | |
| 2016-05-06 | Copy of formal judgment sent to Registrar of the Court of Appeal and all parties | |
| 2016-05-06 | Judgment on leave sent to the parties | |
| 2016-05-05 |
Judgment of the Court on the application for leave to appeal, The motions of the Board of the Pension Protection Fund and Nortel Networks UK Pension Trust Limited to be added as respondents and for an extension of time to serve and file the response to the application for leave to appeal are granted. The application for leave to appeal from the judgment of the Court of Appeal for Ontario, Number C59703, 2015 ONCA 681, dated October 13, 2015, is dismissed with costs. Dismissed, with costs |
|
| 2016-05-05 |
Decision on motion to add or substitute parties Granted |
|
| 2016-05-05 |
Decision on motion to extend time Granted |
|
| 2016-03-29 | All materials on application for leave submitted to the Judges, CJ Mo Ga | |
| 2016-03-29 | Submission of motion to add or substitute parties, CJ Mo Ga | |
| 2016-03-29 | Submission of motion to extend time, CJ Mo Ga | |
| 2016-02-19 | Correspondence received from, (Letter Form), Agent changed to Ethan Sinclair., (Electronic version filed on 2016-02-19) | Ad Hoc Group of Bondholders |
| 2016-02-18 | Applicant's reply to respondent's argument, (Book Form), Proof of service missing. Received 2016-02-19., Completed on: 2016-02-18, (Electronic version filed on 2016-02-18) | Ad Hoc Group of Bondholders |
| 2016-02-08 | Respondent's response on the application for leave to appeal, (Letter Form), takes the same position as the respondent Ernst & Young, Completed on: 2016-02-08, (Electronic version filed on 2016-02-12) | Wilmington Trust, National Association |
| 2016-02-08 | Book of authorities, (Book Form), (Electronic version filed on 2016-02-09) | Ernst & Young Inc. in its capacity as Monitor |
| 2016-02-08 | Certificate (on limitations to public access), (Letter Form), (Electronic version filed on 2016-02-08) | Ernst & Young Inc. in its capacity as Monitor |
| 2016-02-08 | Notice of name, (Letter Form), (Electronic version filed on 2016-02-09) | Ernst & Young Inc. in its capacity as Monitor |
| 2016-02-08 | Respondent's response on the application for leave to appeal, (Book Form), Completed on: 2016-02-08, (Electronic version filed on 2016-02-09) | Ernst & Young Inc. in its capacity as Monitor |
| 2016-02-08 | Book of authorities, (Book Form) | Canadian Creditors Committee |
| 2016-02-08 | Certificate (on limitations to public access), (Letter Form), (Electronic version filed on 2016-02-09) | Canadian Creditors Committee |
| 2016-02-08 | Notice of name, (Letter Form), (Electronic version filed on 2016-02-09) | Canadian Creditors Committee |
| 2016-02-08 | Respondent's response on the application for leave to appeal, (Book Form), Completed on: 2016-02-10, (Electronic version filed on 2016-02-08) | Canadian Creditors Committee |
| 2016-02-08 | Correspondence received from, (Letter Form), from counsel from UKPC re: filing of response, (Electronic version filed on 2016-02-08) | Board of the Pension Protection Fund and Nortel Networks UK Pension Trust Limited (collectively, the "UKPC") |
| 2016-02-08 | Book of authorities, (Book Form) | Board of the Pension Protection Fund and Nortel Networks UK Pension Trust Limited (collectively, the "UKPC") |
| 2016-02-08 | Respondent's response on the application for leave to appeal, (Book Form), Completed on: 2016-02-08, (Electronic version filed on 2016-02-08) | Board of the Pension Protection Fund and Nortel Networks UK Pension Trust Limited (collectively, the "UKPC") |
| 2016-02-08 | Certificate (on limitations to public access), (Letter Form), (Electronic version filed on 2016-02-08) | Board of the Pension Protection Fund and Nortel Networks UK Pension Trust Limited (collectively, the "UKPC") |
| 2016-02-08 | Notice of name, (Letter Form), (Electronic version filed on 2016-02-08) | Board of the Pension Protection Fund and Nortel Networks UK Pension Trust Limited (collectively, the "UKPC") |
| 2016-01-14 | Motion to add or substitute parties, (Letter Form), (Included in the motion to extend time), to be added as respondent, Completed on: 2016-02-18, (Electronic version filed on 2016-01-14) | Board of the Pension Protection Fund and Nortel Networks UK Pension Trust Limited (collectively, the "UKPC") |
| 2016-01-14 | Motion to extend time, (Letter Form), (Included in the motion to add or substitute parties), Completed on: 2016-01-14 | Board of the Pension Protection Fund and Nortel Networks UK Pension Trust Limited (collectively, the "UKPC") |
| 2015-12-23 | Letter acknowledging receipt of an incomplete application for leave to appeal, file opened 2015-12-23 | |
| 2015-12-23 | Correspondence received from, (Letter Form), from Jonathan Bell, counsel for the applicant re: style of cause, (Printed version filed on 2015-12-23) | Ad Hoc Group of Bondholders |
| 2015-12-14 | Certificate (on limitations to public access), (Letter Form), updated certificate filed 2015-12-21, (Electronic version filed on 2015-12-14) | Ad Hoc Group of Bondholders |
| 2015-12-14 | Notice of name, (Letter Form), updated notice of name filed 2015-12-21, (Electronic version filed on 2015-12-14) | Ad Hoc Group of Bondholders |
| 2015-12-14 | Application for leave to appeal, (Book Form), Final CA order is missing. Received 2016-01-08, Completed on: 2016-01-08, (Electronic version filed on 2015-12-14) | Ad Hoc Group of Bondholders |
Parties
Please note that in the case of closed files, the “Status” column reflects the status of the parties at the time of the proceedings. For more information about the proceedings and about the dates when the file was open, please consult the docket of the case in question.
Main parties
| Name | Role | Status |
|---|---|---|
| Ad Hoc Group of Bondholders | Applicant | Active |
v.
| Name | Role | Status |
|---|---|---|
| Ernst & Young Inc. in its capacity as Monitor | Respondent | Active |
| Nortel Networks Corporation, Nortel Networks Limited, Nortel Networks Global Corporation, Nortel Networks International Corporation, Nortel Networks Technology Corporation | Respondent | Active |
| Superintendent of Financial Services as Administrator of the Pension Guarantee Fund | Respondent | Active |
| Wilmington Trust, National Association | Respondent | Active |
| Law Debenture Trust Company of New York | Respondent | Active |
| Bank of New York Mellon | Respondent | Active |
| Nortel Networks Inc. | Respondent | Active |
| Canadian Creditors Committee | Respondent | Active |
| Joint Administrators of Nortel Networks UK Limited | Respondent | Active |
| Board of the Pension Protection Fund and Nortel Networks UK Pension Trust Limited (collectively, the "UKPC") | Respondent | Active |
Counsel
Party: Ad Hoc Group of Bondholders
Counsel
S. Richard Orzy
Gavin H. Finlayson
Jonathan Bell
3400 One First Canadian Place
P.O. Box 130, Station 1st Can. Pl.
Toronto, Ontario
M5X 1A4
Telephone: (416) 777-7479
FAX: (416) 863-1716
Email: swanr@bennettjones.com
Agent
World Exchange Plaza
1900 - 45 O'Connor Street
Ottawa, Ontario
K1P 1A4
Telephone: (613) 683-2308
FAX: (613) 683-2323
Party: Ernst & Young Inc. in its capacity as Monitor
Counsel
Graham Smith
Joseph Pasquariello
Jay Carfagnini
Jesse Mighton
3400 - 333 Bay Street
Toronto, Ontario
M5H 2S7
Telephone: (416) 597-4204
FAX: (416) 979-1234
Email: bzarnett@goodmans.ca
Party: Superintendent of Financial Services as Administrator of the Pension Guarantee Fund
Counsel
35th Floor
155 Wellington Street West
Toronto, Ontario
M5V 3H1
Telephone: (416) 646-4304
FAX: (416) 646-4301
Email: ken.rosenberg@paliareroland.com
Party: Wilmington Trust, National Association
Counsel
John J. Salmas
Toronto Dominion Centre
77 King St. W., Suite 400
Toronot, Ontario
M5K 0A1
Telephone: (416) 863-4374
FAX: (416) 863-4592
Email: kenneth.kraft@dentons.com
Party: Law Debenture Trust Company of New York
Counsel
Scotia Plaza
40 King Street West, 44th Floor
Toronto, Ontario
M5H 3Y4
Telephone: (416) 367-6311
FAX: (416) 361-2436
Email: ELamek@blg.com
Party: Bank of New York Mellon
Counsel
181 Bay Street
Brookfield Place, suite 4400
Toronto, Ontario
M5J 2T3
Telephone: (416) 865-7932
FAX: (416) 865-7048
Email: brett.harrison@mcmillan.ca
Party: Nortel Networks Inc.
Counsel
79 Wellington St. W., Suite 3000
Box 270, TD Centre
Toronto, Ontario
M5K 1N2
Telephone: (416) 865-0040
FAX: (416) 865-7380
Email: sbomhof@torys.com
Party: Canadian Creditors Committee
Counsel
Ari N. Kaplan
Mark Zigler
20 Queen Street West, Suite 900
Box 52
Toronto, Ontario
M5H 3R3
Telephone: (416) 542-6288
FAX: (416) 204-2906
Email: bwalancik@kmlaw.ca
Party: Joint Administrators of Nortel Networks UK Limited
Counsel
Suite 1920, 145 King Street W.
Toronto, Ontario
M5H 1J8
Telephone: (416) 598-7835
FAX: (416) 598-3730
Email: twynne@counsel-toronto.com
Party: Nortel Networks Corporation, Nortel Networks Limited, Nortel Networks Global Corporation, Nortel Networks International Corporation, Nortel Networks Technology Corporation
Counsel
3400 - 333 Bay Street
Toronto, Ontario
M5H 2S7
Telephone: (416) 597-4204
FAX: (416) 979-1234
Email: bzarnett@goodmans.ca
Party: Board of the Pension Protection Fund and Nortel Networks UK Pension Trust Limited (collectively, the "UKPC")
Counsel
John L. Finnigan
Andrea McKewan
Michael S. Shakra
100 Wellington Street West, Suite 3200
TD West Tower, Toronto-Dominion Centre
Toronto, Ontario
M5K 1K7
Telephone: (416) 304-1616
FAX: (416) 304-1313
Email: djmiller@tgf.ca
Agent
100- 340 Gilmour Street
Ottawa, Ontario
K2P 0R3
Telephone: (613) 695-8855 Ext: 102
FAX: (613) 695-8580
Email: mfmajor@supremeadvocacy.ca
Summary
Keywords
None.
Summary
Case summaries are prepared by the Office of the Registrar of the Supreme Court of Canada (Law Branch). Please note that summaries are not provided to the Judges of the Court. They are placed on the Court file and website for information purposes only.
Commercial law – Bankruptcy and insolvency – Interest – Whether creditors can claim interest, including specified contractual interest, from the debtor in respect of the period after a proceeding under the Companies’ Creditors Arrangement Act, R.S.C. 1985, c. C-36 (the “CCAA”) is initiated – Whether the Ontario Court of Appeal erred in holding that a common law “interest stops” rule applies to immediately stop the accrual of post-filing interest in CCAA proceedings – Whether the Ontario Court of Appeal erred in failing to follow the decisions in Canada 3000 Inc., Re; Inter Canadian (1991) Inc. (Trustee of), [2006] 1 S.C.R. 865, 2006 SCC 24 and Stelco (Re), 2007 ONCA 483, 35 C.B.R. (5th) 174.
In the context of ongoing Nortel CCAA proceedings and parallel proceedings under Chapter 11 of the United States Bankruptcy Code, the applicant represents substantial holders of unsecured crossover bonds either issued or guaranteed by certain Canadian Nortel entities. The related indentures provided for the continuing accrual of interest until payment, at contractually specified rates, and for other post-filing payment obligations in the form of make-whole provisions and trustee fees. Therefore, in addition to claiming principal and pre-filing interest in the amount of US$4.092 billion against each of the Canadian and U.S. Nortel estates (whose total proceeds of liquidation are approximately $7.3 billion), the applicant claimed post-filing interest under the crossover bonds equalling an amount of US$1.6 billion. The claims of other claimants, such as pensioners and former employees, do not provide for interest on amounts owed. The Ontario Superior Court of Justice held that the “interest stops rule” developed in the context of insolvency law applies to CCAA proceedings and that the applicant was not legally entitled to amounts claimed above and beyond the outstanding principle debt and pre-petition interest. The Ontario Court of Appeal dismissed the appeal.
Lower court rulings
Ontario Superior Court of Justice
09-CL-7950, 2014 ONSC 5274
Applicants held not to be legally entitled to amounts under indentures beyond outstanding principle and pre-petition interest.
Court of Appeal for Ontario
C59703, 2015 ONCA 681
Appeal dismissed.
Filed documents
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Downloadable PDFs
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Related links
The factums of the appellant, the respondent and the intervener will be posted here at least 2 weeks before the hearing unless they contain personal information, information that is subject to a publication ban, or any other information that is not part of the public record. You may also obtain copies of factums by filling out the Request for Court records form or by contacting the Court’s Records Centre either by email at records-dossiers@scc-csc.ca or by telephone at 613‑996‑7933 or at 1‑888‑551‑1185.
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Downloadable PDFs
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Related links
The condensed books of the appellant, the respondent and the intervener will be posted here upon receipt of the electronic version, 2 days prior to the scheduled appeal hearing. You may also obtain copies of condensed books by filling out the Request for Court records form or by contacting the Court’s Records Centre either by email at records-dossiers@scc-csc.ca or by telephone at 613‑996‑7933 or at 1‑888‑551‑1185.
If you have questions about a condensed book or want permission to use a condensed book, please contact the author of the condensed book directly. Their contact information appears on the first page of each condensed book.
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