Puratone Corp. et al., Re, (2014) 302 Man.R.(2d) 258 (QB)

• Judge: Dewar, J.
• Court: Court of Queen's Bench of Manitoba (Canada)
• Case Date: February 05, 2014
• Jurisdiction: Manitoba
• Citations: (2014), 302 Man.R.(2d) 258 (QB);2014 MBQB 32

Puratone Corp., Re (2014), 302 Man.R.(2d) 258 (QB)

MLB headnote and full text

Temp. Cite: [2014] Man.R.(2d) TBEd. FE.037

In The Matter Of: The Companies' Creditors Arrangement Act, R.S.C. 1985, c. C-36, as amended

And In The Matter Of: A Plan of Compromise or Arrangement of The Puratone Corporation, Pembina Valley Pigs Ltd. and Niverville Swine Breeders Ltd. (the "Applicants")

Application Under: The Companies' Creditors Arrangement Act, R.S.C. 1985, c. C-36, as amended

(CI 12-01-79231; 2014 MBQB 32)

Indexed As: Puratone Corp. et al., Re

Manitoba Court of Queen's Bench

Winnipeg Centre

Dewar, J.

February 5, 2014.

Summary:

Unsecured creditors applied to lift a stay of proceedings against a number of companies (collectively "Puratone") under the Companies' Creditors Arrangement Act.

The Manitoba Court of Queen's Bench, in a decision reported at 295 Man.R.(2d) 55, allowed the application and ordered that, out of the general holdback monies, $903,250.50 would be segregated in an interest bearing account designated for the applicants' claim. An issue arose respecting the breadth of the undertaking as to damages to be provided by the unsecured creditors.

The Manitoba Court of Queen's Bench held that the order had required an unqualified undertaking as to damages. The court held that it had jurisdiction to alter the timeframe which it had set for the issuance of the statement of claim and therefore, the provision of the undertaking.

Editor's Note: The Manitoba Court of Appeal, per MacInnes, J.A., granted an application by secured creditors of Puratone for leave to appeal the decision lifting the stay. See (2014), 303 Man.R.(2d) 15; 600 W.A.C. 15.

Creditors and Debtors - Topic 8588

Debtors' relief legislation - Companies' creditors arrangement legislation - Stay of proceedings (incl. extension or lifting of) - Unsecured creditors (the applicants) applied to lift a stay of proceedings against a number of companies (collectively "Puratone") under the Companies' Creditors Arrangement Act (CCAA) - Puratone ran a commercial hog production business - The applicants, farming operators who had supplied grain to Puratone within two weeks of the filing of the CCAA proceedings, claimed equitable priority over the secured creditors to some of the proceeds of sale of Puratone's assets - Dewar, J., allowed the application and ordered that, out of the general holdback monies, $903,250.50 would be segregated in an interest bearing account designated for the applicants' claim - An issue arose respecting the breadth of the undertaking as to damages to be provided by the unsecured creditors - The Manitoba Court of Queen's Bench held that it was not unusual where prejudgment remedies were granted to require a plaintiff to provide an unqualified "undertaking as to damages" and that was what its order had required.

Creditors and Debtors - Topic 8602

Debtors' relief legislation - Companies' creditors arrangement legislation - Practice (incl. disclosure and undertaking as to damages) - [See Creditors and Debtors - Topic 8588 ].

Creditors and Debtors - Topic 8602

Debtors' relief legislation - Companies' creditors arrangement legislation - Practice (incl. disclosure and undertaking as to damages) - Unsecured creditors (the applicants) applied to lift a stay of proceedings against a number of companies (collectively "Puratone") under the Companies' Creditors Arrangement Act (CCAA) - Puratone ran a commercial hog production business - The applicants, farming operators who had supplied grain to Puratone within two weeks of the filing of the CCAA proceedings, claimed equitable priority over the secured creditors to some of the proceeds of sale of Puratone's assets - Dewar, J., allowed the application and ordered that, out of the general holdback monies, $903,250.50 would be segregated in an interest bearing account designated for the applicants' claim - An issue arose respecting the breadth of the undertaking as to damages to be provided by the unsecured creditors - The Manitoba Court of Queen's Bench, per Dewar, J., held that it had jurisdiction to alter the timeframe which it had set for the issuance of the statement of claim and therefore, the provision of the undertaking under Queen's Bench Rule 3.02(1) which read: "'3.02(1) The court may by order extend or abridge any time prescribed by these rules or an order , on such terms as are just.' [emphasis added]" - See paragraph 19.

Practice - Topic 10

General and definitions - Extension of time under rules - [See second Creditors and Debtors - Topic 8602 ].

Cases Noticed:

Chandler v. Alberta Association of Architects, [1989] 2 S.C.R. 848; 99 N.R. 277; 101 A.R. 321, refd to. [para. 15].

Miracle 786 Flooring Ltd. v. Canadian Western Trust Co., 2013 BCPC 36, refd to. [para. 15].

Statutes Noticed:

Rules of Court (Man.), Queen's Bench Rules, rule 3.02(1) [para. 19].

Counsel:

Jason S. Harvey, for ITB Claimants;

Jennifer J. Burnell and G. Bruce Taylor, for Bank of Montreal;

David J. Kroft, for Officers and Directors;

Ross A. McFadyen, on a watching brief for Deloitte Touche Inc.;

Jeffrey M. Lee, Q.C., and Dean Hutchison, for Farm Credit Corp.;

No one appearing for Puratone.

This matter was heard by Dewar, J., of the Manitoba Court of Queen's Bench, Winnipeg Centre, who delivered the following decision on February 5, 2014.