Hawkair Aviation Services Ltd. (Application to extend the Stay of Proceedings)

2006BCSC1006 IN THE SUPREME COURT OF BRITISH COLUMBIA Citation: Hawkair Aviation Services Ltd. (Application to extend the Stay of Proceedings), 2006 BCSC 1006 Date: 20060629 Docket: L052400 Registry: Vancouver IN THE MATTER OF THE COMPANIES' CREDITORS ARRANGEMENT ACT, R.S.C. 1985, c. C-36 and IN THE MATTER OF THE BUSINESS CORPORATIONS ACT, S.B.C. 2002, c. 57 and IN THE MATTER OF HAWKAIR AVIATION SERVICES LTD. Petitioner Before: The Honourable Mr. Justice Burnyeat Reasons for Judgment (In Chambers) Counsel for the Petitioner A.H. Brown Counsel for the I.M.P. Group Ltd. A.A. Frydenlund J.L. Williams Counsel for Campbell, Saunders Ltd., the Monitor of Hawkair Aviation Services Ltd. H.M.B. Ferris Counsel for the City of Prince Rupert L.C. Donaldson Counsel for the City of Dawson Creek S. Manhas Counsel for Attorney General of Canada R.D. Leong Counsel for Field Aviation Company Ltd. J.R. Sandrelli In-Person T. Jacobi Date and Place of Hearing: June 22, 2006 Vancouver, B.C. [1] The Petitioner, Hawkair Aviations Services Ltd., ("Hawkair") applies pursuant to the provisions of the Companies' Creditors Arrangement Act, R. S. C. 1985, c. C-36 ("Act") and the inherent jurisdiction of the Court for an order that, after filing its Restructuring Plan, a Creditors Meeting for the purposes of seeking the approval of the Restructuring Plan can be postponed until after the earlier of: (a) when Hawkair has commenced using replacement aircraft and has returned all aircraft currently used in its operation to its aircraft financiers; or (b) when Hawkair has commenced using replacement aircraft and has disposed of its aircraft by selling all aircraft currently used in its operations, and for an Order that the Stay of Proceedings in effect be extended to 6:00 p.m. on January 30, 2007 unless terminated earlier or extended by Order of the Court on subsequent applications. That application is supported by parties represented in Court other than I.M.P. Group Ltd. ("I.M.P.") who hold security against two of the three De Havilland Dash 8 airplanes used by Hawkair in its business of providing scheduled passenger services between each of Terrace, Prince Rupert, Fort St. John, Dawson Creek and the South Terminal of the Vancouver International Airport. PROCEEDINGS UNDER THE ACT [2] On October 7, 2005, Hawkair applied pursuant to the Act and was granted an Order which provided for a Stay of Proceedings until November 4, 2005, which was set as the date for the "Comeback Hearing." On November 4, 2005, an Order was made that confirmed the provisions of the first Order and extended the Stay of Proceedings to December 19, 2005. The extension was granted to provide Hawkair with sufficient time to prepare longer term financial projections, negotiate terms with its aircraft financiers, and begin developing a Plan of Arrangement. [3] On December 19, 2005, a 30-day extension of the Stay of Proceedings to February 14, 2006 was granted. An agreement was subsequently reached between Hawkair and Field Aviation Company Ltd. ("Field") who had financed one of the aircraft being used by Hawkair. The agreement provided for the assets charged by the security of Field to be valued with Field agreeing to be an unsecured creditor of Hawkair for the balance. That agreement with Field was subsequently approved by Court Order. While Hawkair continued to negotiate with I.M.P. and while an interim agreement was reached that $60,000.00 per month would be paid to I.M.P., no long term agreement has been reached with I.M.P. who appears to oppose the application of Hawkair for an extension of the Stay of Proceedings. [4] On February 9, 2006, Hawkair applied for a further 30-day extension and, after satisfying the Court that it was acting in good faith and was making progress towards a filing a Plan of Arrangement, an extension of the Stay of Proceedings to March 9, 2006 was ordered. [5] On February 24, 2006, Hawkair received notice from the National Automobile, Aerospace, Transportation and General Workers Union of Canada that certain employees of Hawkair intended to apply for union certification. On March 7, 2006, Hawkair applied to Court for a further extension of 90 days of the Stay of Proceedings to allow sufficient time to deal with the union certification application and to finalize its Plan of Arrangement. After being satisfied that Hawkair was acting in good faith and required time to deal with the union matter and to prepare a Plan of Arrangement, an extension of Stay of Proceedings was ordered until June 9, 2006. [6] Hawkair made application for a declaration that the union certification application was in breach of the provisions of the various Orders providing for Stay of Proceedings and was therefore null and void and of no force and effect and, in Reasons for Judgment, that declaration was made by the Court. [7] On June 8, 2006, Hawkair made application for a further extension of 14 days to allow it sufficient time to finalize its Plan of Arrangement on the basis that Hawkair required this additional time due to last minute negotiations with I.M.P. regarding how the proposed Plan of Arrangement would affect I.M.P. and so that I.M.P. would not oppose an extension of the Stay of Proceedings. BACKGROUND REGARDING THE OPERATION OF HAWKAIR [8] When Transport Canada regulations were changed resulting in a reduction from 37 to 32 of the maximum number of passengers that could be carried on many of the flights offered by Hawkair and when Hawkair calculated that the potential losses as a result of the reduction in number of passengers that could be carried might be in excess of $500,000.00 per year, Hawkair decided that it would be necessary to look to newer aircraft models with greater seating capacity to meet its needs. Hawkair then entered into discussions with I.M.P. in the hope that I.M.P. would either write down its debt to an amount in excess of the current market value of the two aircraft and present an unsecured claim for the shortfall or to allow the two aircraft to be sold after replacement aircraft were in service. In this regard, Thomas Beshr of Hawkair states in his June 20, 2006 Affidavit: Since it appears that IMP will vote against any Hawkair plan providing for either a write down of the IMP debt or the sale of IMP's aircraft, it is imperative if Hawkair is to survive, to conclude an arrangement for replacement aircraft and dispose of the IMP Aircraft, either by sale or by returning them to IMP. That must be done before the creditors vote on Hawkair's plan or it appears that IMP will vote against the Plan, which will almost certainly result in Hawkair's bankruptcy. [9] On May 26, 2006, Hawkair received an offer to allow it to lease two aircraft that would be more suitable for its operations to replace its existing aircraft with one of the aircraft being available on December 16, 2006 and the other being available on February 13, 2007. Hawkair subsequently learned that the lessor of the aircraft that was to have been available on December 16, 2006 has elected to extend that lease so that this aircraft is no longer available. Hawkair is currently in negotiations with the lessor of the second aircraft and hopes to be able to conclude a satisfactory arrangement to lease that aircraft so that it will be available by February 13, 2007. Mr. Beshr of Hawkair states that Hawkair is currently searching the market for a second replacement aircraft, that the only aircraft presently available is available only for purchase, and that Hawkair believes it is financially unable to purchase aircraft and must look to leasing a replacement aircraft. In this regard, Mr. Beshr states: Hawkair will continue to use its best commercially reasonable efforts to sell the IMP Aircraft with a closing date and/or delivery date which allows for a smooth transition to replacement aircraft. Hawkair will provide a monthly report to the Monitor to provide information on the status of Hawkair's work in locating and switching over to replacement aircraft. POSITION OF I.M.P. [10] Under the Restructuring Plan as drafted, "Secured Creditors" such as I.M.P. would be dealt with " in accordance with existing arrangements between Hawkair and its Secured Creditors or in accordance with arrangements that may be made in the future." However, no mutually satisfactory arrangements have been made between Hawkair and I.M.P. Accordingly, what is contemplated under the Restructuring Plan is that the Creditors Meeting will be postponed until Hawkair is in a position to replace the aircraft used by it, being the two aircraft charged by the I.M.P. Security. [11] In this regard, Mr. Beshr states: As indicated in para. 2.03 of the Restructuring Plan, Hawkair will deal with the consequences of the sales of the IMP aircraft under its Plan by allowing IMP an Unsecured Claim under the Plan for its shortfall. Hawkair also remains willing to work with IMP to determine a means by which IMP could repossess then sell their aircraft at the appropriate time, to allow them to achieve desired tax results. At this time Hawkair expects to be able to begin using one of the replacement aircraft shortly after February 13, 2007. Hawkair hopes to locate a suitable second replacement aircraft that becomes available before February, 2007. However, it is not known when another replacement aircraft will become available. Throughout this time Hawkair will continue to fund all monthly maintenance reserve payments in respect of the IMP Aircraft. [12] I.M.P. has a fixed charge over two aircraft and spare parts but holds no other security against the assets of Hawkair. At April 30, 2006, the records of Hawkair reflect a business loan to I.M.P. in the amount of $8,664,359.00. Despite the Stay of Proceedings, the loan was being repaid in monthly instalments of $60,000.00. In April, 2006, Hawkair started to withhold the loan payments and the maintenance of the "Current Maintenance Reserves" due to an unresolved dispute with respect to the payment by I.M.P. to Hawkair for maintenance work completed by Hawkair. In the interim, Hawkair has used the funds withheld to help pay for the major maintenance item being incurred by Hawkair relating to one of the aircraft charged by the I.M.P. security (the "C-Check"). Hawkair estimates that the total cost of the C-Check is in excess of $300,000.00. [13] The purpose of the "Maintenance Reserves" is to ensure that adequate funds are set aside to cover scheduled aircraft maintenance and engine overhaul for the aircraft operated by Hawkair. The agreements with I.M.P. and Field require maintenance reserve funds to be properly funded. Maintenance reserve amounts are payable monthly to I.M.P. and Field for the aircraft and to Standard Aero for the engines. The Maintenance Reserve payments in arrears as at April 30, 2006 are estimated by the Monitor to be $35,250.00 for the I.M.P. financed aircraft, $72,268.00 (U.S. dollars) for the Field financed aircraft, and $253,669.00 (U.S. dollars) for the engines (Standard Aero). Since the filing under the Act, Hawkair has been remitting the current maintenance service amounts to the aircraft financiers and to Standard Aero with the exception of the recent holdback of the I.M.P. Maintenance Reserves. Hawkair has established a separate savings account so that the shortfalls in the Maintenance Reserves can be rectified. Hawkair sets aside $28,000.00 per month planning that the shortfall will be rectified by March, 2007. [14] What is contemplated under the Restructuring Plan is that the $60,000.00 monthly payments to I.M.P. would not be made until after October or November, 2006 in order to make a fund available to satisfy the anticipated costs of entering into lease agreements for the two replacement aircraft. [15] Hawkair requires the two aircraft charged by the security of I.M.P. until replacement aircraft are in service. If the Stay of Proceedings is lifted at this time, it is the intention of I.M.P. to realize on its security by seizing and selling the two Dash 8 airplanes. If the two airplanes are seized, Hawkair would cease operating and would be forced into bankruptcy. In the Fifth Report of the Monitor, the dividend available to unsecured creditors on a "Forced Liquidation" is estimated to be between $91,000.00 and $533,000.00 representing between 0.9% and 6.1% of the likely claims of unsecured creditors whereas the likely distribution under the Restructuring Plan is estimated to be in the neighbourhood of 9.5% to 11.2%. [16] While I.M.P. is of the view that the market for those airplanes is very active at the moment, there is nothing in evidence in this regard. Nor is there evidence that the potential sale price for those aircraft is in excess of the estimate made by Hawkair that the aircraft can be sold for in the neighbourhood of $5,000,000.00 to $6,000,000.00. Obviously, the sale prices in the spring of 2007 are unknown. [17] I.M.P. is not prepared to have the payments of $60,000.00 per month continued even though Hawkair submits that it is not in a position to recommence those payments at this time and that the payments could only be recommenced some time in the late Fall of 2006 on the assumption that there would then be sufficient funds available to allow it to make the anticipated payments that will be required prior to entering into leases. STATUS OF OTHER CREDITORS [18] Paymentech is the company that Hawkair uses to process credit card payments. Paymentech has instituted an industry-wide deposit requirement to protect it from having to refund prepaid airline fares to customers should an airline cease operating. In August 2005, Paymentech required Hawkair to post a $750,000.00 security deposit. In August 2005, Paymentech commenced holding back 10% of the daily Visa deposits and applied these funds towards the required deposit. These holdbacks severely impacted on the cash flow available to Hawkair and were a major factor in the decision of Hawkair to file for protection under the Act. [19] There are ongoing negotiations regarding the appropriate level of the security deposit required and how the security deposit will be funded. Since February, 2006, Hawkair has been transferring $35,000.00 per month into a savings account that now totals $140,000.00 which will be forwarded to Paymentech towards the security deposit ultimately required. Paymentech already holds a security deposit of $129,011.00. In its Fifth Report, the Monitor states that it is: " confident based on its' conversations with Paymentech that arrangements can be made to increase the security deposit to an appropriate level without hindering the Company's Plan of Arrangement." However, negotiations with Paymentech have not been concluded. [20] The Northern Savings Credit Union ("N.S.C.U.") provides an operating credit facility which was initially $600,000.00 but subsequently reduced to $250,000.00. As security, N.S.C.U. holds a Registered General Security Agreement that covers all present and after acquired property of Hawkair and also holds $400,000.00 in term deposits as cash collateral. Hawkair has recently been advised that N.S.C.U. is not prepared to continue to provide the credit facility. In its Fifth Report, the Monitor expresses the view that the decision by N.S.C.U. to discontinue the operating facility is not anticipated to have an adverse effect on the operations of Hawkair because, not only is the credit facility fully cash collateralized, the cash collateral exceeds the operating line by approximately $100,000.00. Hawkair is presently searching for another financial institution to provide the operating facility. [21] Hawkair has a term loan with Business Development Corporation ("B.D.C."). The balance owing as of April 30, 2006 under the term loan is $104,026.00. The loan is secured by a fixed charge over a Bristol aircraft which is currently being offered for sale as it is no longer required by Hawkair. The loan is also secured by a floating charge which ranks second after the charge in favour of N.S.C.U. The loan to B.D.C. is presently being repaid in monthly instalments of $6,000.00. The possible sale of the Bristol aircraft recently collapsed but Hawkair continues to use its "best commercially reasonable efforts" to sell this aircraft although the market for such aircraft appears to be weak at the moment. [22] Counsel for I.M.P. states that there are tax and accounting advantages available if I.M.P. is in a position to realize on its security by seizing and selling instead of allowing Hawkair to sell the aircraft even though an identical shortfall after sale by Hawkair would be created. However, there is nothing in evidence in that regard. THE RESTRUCTURING PLAN [23] Under Article 2.03 of the Restructuring Plan which deals with the "Status of Aircraft Financing Arrangements," Hawkair provides "greater certainty" regarding its intentions about the date of the proposed Creditors Meeting: For greater certainty, it is Hawkair's intention that on the date of the Creditors Meeting: (a) Pursuant to para. 5 of the Initial Order Hawkair will have disposed of its aircraft fleet by selling or by returning to its aircraft financiers all aircraft used in its operations as at the Date of Filing; and (b) Hawkair will be using replacement aircraft in its operations. [24] What would be available to unsecured creditors would be a pro rata share of $900,000.00. As noted above, what would be available to secured creditors would be in accordance with the security held by them. Accordingly, the critical issue from the point of view of I.M.P. is whether the Creditors Meeting is to be postponed until it becomes an unsecured creditor or whether it will be in a position to vote as a secured creditor at the Creditors Meeting even though it has the present intention of voting against the Restructuring Plan. DISCUSSION, CASE AUTHORITIES AND DECISION [25] Counsel were not able to locate any decisions dealing with the question of whether it was appropriate for the Court to sanction a delay of the calling of a Creditors Meeting in order that there would be time to allow for the sale of an asset so that the claim of a secured creditor would become the claim of an unsecured creditor for the shortfall created after the sale. There is nothing in the Act dealing with when a meeting of the creditors or a class of creditors is to be called other than s. 4 of the Act which provides that a meeting of the creditors or class of creditors or of the shareholders of a company can be ordered " to be summoned in such manner as the court directs". I take that to be an indication that is within the discretion of the Court to establish when such a meeting is to be "summoned". In determining this question and whether the Restructuring Plan of Hawkair should be sent to a meeting of the Creditors of Hawkair, I am satisfied that I should exercise my discretion in accordance with the overall purpose of the Act, in order to maintain the status quo, and in order to promote the introduction of a plan of reorganization which is fair and reasonable. [26] In Quintette Coal Ltd. v. Nippon Steel Corp. (1990), 80 C.B.R. (N.S.) 98 (B.C.S.C.), the purpose of the initial Order under the Act which provided for a stay of proceedings was described as being: In considering this submission it is worthwhile to refresh our minds as to the overall purpose of the C.C.A.A. Stanley E. Edwards (1947), 25 Can.Bar.Rev. 587, Notes that p. 592]: "Its object, as one Ontario judge has sated in a number of cases, is to keep a company going despite insolvency." He notes that when the bill was introduced into the House of Commons it was indicated that the design was to "permit a corporation, through reorganization, to continue its business." (at p. 108) The overall design of the C.C.A.A. is to preserve the debtor as a viable operation and to reorganize its affairs to the benefit of not only the debtor but also its creditors. (at p. 109) What is meant by maintaining the status quo is that the debtor will be able to stay in business, and that they will have breathing space in which to develop a proposal during which time there will be a stay under any bankruptcy or winding up legislation, a restraint of all actions against the company, and no realization of guarantees or other rights against the company. In this case the order also restrained creditors from exercising any right of set-off. (at p. 109) [27] In Chef Ready Foods Ltd. v. Hongkong Bank of Canada (1991), 4 C.B.R. (3d) 311 (B.C.C.A.), Gibbs J.A. on behalf of the Court stated that the purpose of the Act was to facilitate the making of a compromise " to the end that the company is able to continue in business" (at p. 315) and that: the Court is called upon to play a kind of supervisory role to preserve the status quo and to move the process along to the point where a compromise or arrangement is approved or it is evident that the attempt is doomed to failure. Obviously time is critical. Equally obviously, if the attempt at a compromise or arrangement is to have any prospect of success, there must be a means of holding the creditors at bay, hence the powers vested in the courts under s. 11. (at p. 315) [28] As the purpose of the Act is to preserve Hawkair as a viable operation and to allow it to reorganize its affairs for the benefit of its creditors, such preservation and reorganization can only take place if sufficient time is allowed for that to be done. Sufficient time will only be available if the date of the Creditors Meeting is delayed. The "status quo" here is an operating airline employing about 100 employees. In order that the status quo can be maintained, Hawkair must continue to operate. An airline without aircraft cannot operate. Accordingly, the Stay of Proceedings must be continued if Hawkair is to continue to serve the communities of Terrace, Prince Rupert, Fort St. John, Dawson Creek and Vancouver. While there is uncertainty about when new aircraft will be available, the present two aircraft can only be seized and sold by I.M.P. or sold by Hawkair after replacement aircraft are available if Hawkair is to continue to operate. In the circumstances, I am satisfied that it is in the interests of all creditors that Hawkair continue to operate. I order that the meeting of creditors and of the shareholders of Hawkair be summoned in accordance with Article 2.03 of the Restructuring Plan. [29] One of the arguments raised by I.M.P. is that what is planned has the effect of defining the class of unsecured creditors so as to result in confiscation or injustice to I.M.P. I am satisfied that this is not the case. Rather, I am satisfied that all unsecured creditors will be dealt with equally, that separate provision has been made for secured creditors such as I.M.P., and that the delay in calling the creditors' meeting does not improperly deal with I.M.P. as a creditor. While counsel for I.M.P. has provided a number of authorities which have dealt with the refusal of the Court to approve a particular class of creditors, I am satisfied that those authorities do not deal with the present case. I am satisfied that what is proposed does not unfairly remove I.M.P. from being a secured creditor while at the same time forcing them to vote with unsecured creditors even though they are a secured creditor. [30] Re Woodward's Ltd. (1993), 20 C.B.R. (3d) 74 (B.C.S.C.) dealt with an application for an order approving the classes of creditors designated in the petitioner's plan of arrangement under the Act. Tysoe J. cited with approval the following statement of Lord Esher in Sovereign Life Assurance Company v. Dodd, [1892] 2 Q.B. 573 (C.A.): It is because the creditors composing the different classes have different interests; and, therefore, if we find a different state of facts existing among different creditors which may differently affect their minds and their judgment, they must be divided into different classes. (at pp. 579-80 in Sovereign) [31] The following statement by Bowen L.J. in Sovereign was also cited with approval by Tysoe J.: It seems plain that we must give such a meaning to the term "class" as will prevent the section being so worked as to result in confiscation and injustice, and that it must be confined to those persons whose rights are not so dissimilar as to make it impossible for them to consult together with a view to their common interest. (at p. 583 in Sovereign) [32] In Re Les Oblats de Marie Immaculee du Manitoba, [2004] M.J. (Q.L.) No. 112 (Man. Q.B.), Schwartz J. dealt with an application by the Crown to set aside a stay granted under the Act. After deciding the application on the basis that the petitioner had not met the required threshold of establishing its insolvency, Schwartz J. went on to discuss the fact that the plan provided that those who were claiming that they had been abused at a Residential School would be given an equal value for voting purposes despite their different claims for damages. The Crown argued and Schwartz J. agreed that the Act requires that the value of each claim should be established prior to the holding of the vote and that it was inappropriate to enforce equality on those entitled to vote despite different amounts eventually found to be due and owing to them. Schwartz J. cited with approval the statement of Blair J., as he then was, in Menegon v. Philip Services Corp. [1999] O.J. No. 4080 where the general principles were stated to be: The rights of creditors under the CCAA cannot be compromised unless, a) the creditor has been given a right to vote, in the appropriate class, on the proposed compromise; b) the creditor's vote is in accordance with a value ascribed to the claim by a Court approved procedure; c) the class in which the creditor has been appropriately placed has voted by a majority in number and two-thirds in value in favour of the compromise; and, d) the Court has sanctioned the compromise on the basis that it is fair and reasonable (with considerable deference being given by the Court in this regard to the votes of the creditors). (at para. 42 in Menegon) [33] The plan in Re Les Oblats also provided that the Crown would include its claims within the Residential School class of claims. In response to the submission from the Crown that the proposal to include its claim in that way was "a blatant effort to compromise against LOMI's single largest creditor without allowing that creditor and appropriate say in the vote", Schwartz J. concluded: There is no real commonality of interest between the IRS claimants and the Crown and in fact they are in dispute, and as such the Crown ought not to be included in the same class. If that were to doom the plan to defeat, so be it. Further, even if the Crown claims and the IRS claims were included in the same category, it is likely that the Crown claims would exceed the IRS claims in value as the Crown submission is that it claims against LOMI, the total amount it is required to pay out to IRS claimants. (at para. 63) [34] There is a commonality of interest between the unsecured creditors of Hawkair and I cannot accede to the submission made by I.M.P. that unsecured creditors who never had security should be dealt with differently than creditors who had security but only have an unsecured claim for a shortfall at the time of the vote because the assets charged by their security have been sold. I.M.P. remains a secured creditor until the assets subject to its security are sold. While it would be inappropriate to require I.M.P. to vote as an unsecured creditor if the balance owing by Hawkair remained partially secured, there is no reason why I.M.P. should not be required to vote as an unsecured creditor for their unsecured claim once the amount of that unsecured claim has been determined. Accordingly, I reject the argument raised that there has been a confiscation of the secured rights of I.M.P. or that there is no commonality of interest between I.M.P. as an unsecured creditor and all other unsecured creditors. [35] However, I have considerable concerns about the Stay of Proceedings remaining in effect until after the Creditors' Meeting or until Hawkair or a creditor of Hawkair applies to the Court to lift the Stay of Proceedings. In order to continue to play a "kind of supervisory role" and in order "to move the process along" as was envisioned in Chef Ready Foods, supra, I am satisfied that the Stay of Proceedings should not be extended as is requested by Hawkair. There remains such uncertainty regarding the finances of Hawkair that it is appropriate only to extend the Stay of Proceedings to September 8, 2006 at 4:00 p.m. [36] The uncertainties are numerous but include the questions of whether Hawkair can consummate a satisfactory lease arrangement relating to the one replacement aircraft which remains available; whether Hawkair can arrange for a satisfactory lease of a second aircraft; whether one or both of those leases will require a substantial "down payment" so that it will be impossible for Hawkair to again pay I.M.P. $60,000.00 a month against the balance owing under the security of I.M.P. prior to late Fall 2006; whether an arrangement can be reached with I.M.P. so that they will withdraw their opposition to the continuation of the Stay of Proceedings; whether negotiations with Paymentech will result in a reduction of the present financial commitment of $35,000.00 per month; whether the requirements of the new financial institution providing a substitute line of credit facility will require the same or more security than presently held by N.S.C.U.: whether the new security required will affect the security available for other creditors; whether cash will be available from the cash reserve of approximately $400,000.00 which is presently lodged with N.S.C.U.; and whether alternate arrangements can be made with B.D.C. regarding the $6,000.00 monthly payments being made against the balance due and owing to B.D.C. [37] Although it is contemplated that the Monitor will continue to report to the creditors and the Court regarding the progress being made by Hawkair in these regards, I am satisfied that the interests of all creditors will be best served and that the supervisory role of the Court can only be properly undertaken if an application is made during the week of September 5, 2006 at the latest for an extension of the Stay of Proceedings. SUMMARY [38] The meeting of creditors and shareholders of Hawkair will be summons in accordance with Article 2.03 of the Restructuring Plan and the Stay of Proceedings will be further extended to expire on September 8, 2006 at 4:00 p.m. The deadline on Hawkair to file their Restructuring Plan will be July 4, 2006 at 2:00 p.m. "G.D. Burnyeat, J." The Honourable Mr. Justice G.D. Burnyeat