In Alderbridge Way GP Ltd. (Re), 2023 BCSC 1718, a secured creditor in a Companies’ Creditors Arrangement Act, R.S.C. 1985, c. C-36 proceeding sought procedural orders in relation to several actions: an action by the secured creditor against the debtors and their guarantors, an action against the secured creditor by the debtors and guarantors, and actions against the secured creditor by other creditors. In particular, the secured creditor sought orders requiring all of the actions to be tried together in the context of the CCAA proceedings, and to set deadlines for filing pleadings, listing documents, and conducting examinations for discovery. The respondents opposed the orders and argued that the court did not have jurisdiction to grant the relief sought under the CCAA.
Ultimately, the court found that the CCAA does provide jurisdiction for the relief sought and found the relief appropriate in the circumstances. Whereas section 20 of the CCAA required the secured creditor’s claim against the debtors to be determined within the CCAA proceedings on a summary basis, the court relied on section 11 of the CCAA for the jurisdiction to make procedural orders related to the other claims, including inter-creditor actions.
Section 11 provides the court with broad jurisdiction to advance the purposes of the CCAA by making any order it considers appropriate. The court explained that the “single proceeding model” that applies in insolvency proceedings does not apply only to claims against a debtor and the debtor’s assets. A CCAA court can make an order concerning the adjudication of claims related to the restructuring proceeding, including inter-creditor claims, when such an order assists the restructuring process and the remedial purposes of the CCAA.
Among other reasons, the court found the procedural orders appropriate because any delay in resolving the inter-creditor claims had a real prospect of stalling the restructuring. The Monitor was conducting a sales and investment solicitation process to sell an “ambitious” large-scale real estate project and indicated that if a bid arose it needed to know which secured creditors would be the “fulcrum creditors” affected by a potential sale. Similarly, for a potential credit bid the Monitor needed to know the amounts and priorities of the secured creditors’ claims.
The Alderbridge case underscores the broad jurisdiction of the court in CCAA proceedings, and confirms the court can make orders that affect the rights of creditors even with respect to claims not directly made against the debtor.