On Thursday last week, our counsel attended the Court of Appeal with respect to motions by the Bearspaw secured creditors (Investit Financial Inc. Romspen Mortgage Corporation) for a stay of the Order of Justice LoVecchio of October 8, 2009 pending the hearing of their leave to appeal applications on December 1, 2009. They want a stay because they do not want the parties to draw on the debtor in possession financing (which was increased from $1,000,000 to $2,500,000 by the Court Order) until the appeal. Shire and the Monitor say that this delay is potentially jeopardizing the restructuring process.
The judge hearing motions at the Court of Appeal started off saying that he did not have time to read the materials as he had only just received them. The parties agreed to adjourn this stay application to Friday, November 13 at 10:30 a.m., on the basis that they agree to a stay (ie not draw on the DIP) until that time.
Also on Thursday, the secured creditor for the Tsehum Harbour project (Fisgard Capital Corporation) argued its application before Justice Wilkins in the Court of Queen's Bench. Fisgard holds a mortgage over the Tsehum Harbour Property in BC and it had previously started foreclosure proceedings against this property. This property is owned by Bosun's Holdings Ltd. ("Bosun"). In the most recent order of Justice LoVecchio, the initial CCAA Order had been amended to include Bosun.
Fisgard argued that it didn't get notice and it should not be included in the CCAA proceedings. It also argued that as it was clear the outstanding mortgage exceeded the value of the property, this property should not be subject to superpriority DIP charge.
The judge agreed with Fisgard, and ordered that Bosun be removed from the proceedings. In particular the judge referenced the affidavit of Couch in support of the order adding Bosun in which she stated that Bosun did not have any real assets. As there was no evidence of any equity, it is difficult to argue that Bosun should remain in the proceedings, so this decision likely makes little difference to us.
