Quest University Canada (Re)

Quest University Canada (Re)

The Court exercised its s.11 CCAA discretion to grant the Claims Process Order and Meeting Order because the proposed process provides necessary certainty, the Plan meets the low threshold to be put to creditors and the creditor classification meets the commonality test; the Break Up Fee and Break Up Fee Charge were approved because they are limited to expense reimbursement, were negotiated at arm's length, approved by the board and supported by the Monitor and major creditors, are payable only on narrow breaches, will facilitate realization of assets and a viable restructuring, and will not materially prejudice stakeholders.

Citation
2020 BCSC 1845
Parties
Petitioner: Quest University Canada; Monitor: PricewaterhouseCoopers Inc.; Purchaser / Interested Party: Primacorp Ventures Inc.; Creditor / Interested Party: RCM Capital Management Ltd. and SESA-BC Holdings Ltd.; Counterparty / Leaseholder / Opposing Party: Southern Star Developments Ltd.; Secured Creditor: Vanchorverve Foundation; Interested Party: Halladay Education Group; Secured Creditor / Right of First Refusal Holder: Capilano University; Potential Competing Bidder: Confidential Party (Development Partner #1); Union / Creditor Representative: Quest University Faculty Union; Secured Creditor: Bank of Montreal; Government Creditor: Her Majesty The Queen In Right of Province of British Columbia and the Ministry of Advanced Education Skills and Training; Interested Party: 1114586 B.C. Ltd.; Interested Party / Creditor: Association for the Advancement of Scholarship
Court
Supreme Court of British Columbia
Jurisdiction
Canada
Judgment Date
26 November 2020
Procedural Posture
Companies' Creditors Arrangement Act (ccaa) Proceeding / Applications for Claims Process Order and Meeting Order Granted; Transaction Approval and Vesting Order (tavo) Adjourned
Outcome
Claims Process Order granted; Meeting Order granted; Break Up Fee approved; Break Up Fee Charge granted; TAVO hearing adjourned
Legal Topics
Claims Process and Bar Date, Plan of Arrangement and Creditor Classification, Break Up Fee and Priority Charge, Sale Process and Stalking Horse Considerations, CCAA Charges and Vesting Orders
Source Language
English
Insolvency Corporate Restructuring Commercial Transactions Property Law Administrative/procedural Law Claims Process and Bar Date Plan of Arrangement and Creditor Classification Break Up Fee and Priority Charge +2 more

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Parties

Quest University Canada

Petitioner

PricewaterhouseCoopers Inc.

Monitor

Primacorp Ventures Inc.

Purchaser / Interested Party

RCM Capital Management Ltd. and SESA-BC Holdings Ltd.

Creditor / Interested Party

Southern Star Developments Ltd.

Counterparty / Leaseholder / Opposing Party

Vanchorverve Foundation

Secured Creditor

Halladay Education Group

Interested Party

Capilano University

Secured Creditor / Right of First Refusal Holder

Confidential Party (Development Partner #1)

Potential Competing Bidder

Quest University Faculty Union

Union / Creditor Representative

Bank of Montreal

Secured Creditor

Her Majesty The Queen In Right of Province of British Columbia and the Ministry of Advanced Education Skills and Training

Government Creditor

1114586 B.C. Ltd.

Interested Party

Association for the Advancement of Scholarship

Interested Party / Creditor

Procedural Posture

Companies' Creditors Arrangement Act (ccaa) Proceeding / Applications for Claims Process Order and Meeting Order Granted; Transaction Approval and Vesting Order (tavo) Adjourned

Legal Issues

  1. 1 Whether to approve a claims process and set a claims bar date
  2. 2 Whether to order a creditor meeting and approve creditor classification for voting
  3. 3 Whether to approve payment of a Break Up Fee and grant a Break Up Fee Charge

Ratio Decidendi

The Court exercised its s.11 CCAA discretion to grant the Claims Process Order and Meeting Order because the proposed process provides necessary certainty, the Plan meets the low threshold to be put to creditors and the creditor classification meets the commonality test; the Break Up Fee and Break Up Fee Charge were approved because they are limited to expense reimbursement, were negotiated at arm's length, approved by the board and supported by the Monitor and major creditors, are payable only on narrow breaches, will facilitate realization of assets and a viable restructuring, and will not materially prejudice stakeholders.

Court Disposition

Claims Process Order granted; Meeting Order granted; Break Up Fee approved; Break Up Fee Charge granted; TAVO hearing adjourned

Orders

  • Claims Process Order approved with claims bar date of November 24, 2020 and negative claims process for specified classes of creditors
  • Meeting Order authorized convening a virtual creditors' meeting on December 2, 2020 under the Electronic Meeting Protocol