Marine Drive Properties Ltd. (Re)

Marine Drive Properties Ltd. (Re)

Because the Initial Order was improperly obtained ex parte in circumstances where there was no urgency, the administrative charge's super-priority insofar as it secures the debtor's (Marine Drive's) legal fees must be set aside as inequitable; however, the administrative charge's priority is confirmed for the...

Source-derived case information.

Citation
2009 BCSC 1083
Parties
Petitioner: Marine Drive Properties Ltd.; Petitioner: Wyndansea Hotel Inc.; Petitioner: 0707624 B.C. Ltd.; Applicant/creditor: Bancorp Financial Services Inc.; Applicant/creditor: Bancorp Balanced Mortgage Fund Ltd.; Applicant/creditor: Cooper Pacific Mortgage Investment Corporation; Applicant/creditor: Liberty Holdings Excell Corp.; Monitor: Ernst & Young Inc.; Interested Party/creditor: CareVest Capital Inc.
Court
Supreme Court of British Columbia
Jurisdiction
Canada
Judgment Date
24 June 2009
Procedural Posture
CCAA Proceedings / Application to Determine Priority of Administrative Charge Following Set Aside of Initial Order (oral Reasons)
Outcome
Administrative charge priority set aside with respect to Marine Drive's legal counsel fees; administrative charge priority confirmed for the Monitor (Ernst & Young Inc.) and the Monitor's counsel; parties to agree on allocation and mechanics or return to court for resolution.
Legal Topics
Administrative Charge, Super Priority, Initial Ex Parte Order, Priority of Secured Creditors, Monitor's Fees, Nunc Pro Tunc
Source Language
english
Insolvency Corporate Law Procedural Law Equity Administrative Charge Super Priority Initial Ex Parte Order Priority of Secured Creditors +2 more

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Parties

Marine Drive Properties Ltd.

Petitioner

Wyndansea Hotel Inc.

Petitioner

0707624 B.C. Ltd.

Petitioner

Bancorp Financial Services Inc.

Applicant/creditor

Bancorp Balanced Mortgage Fund Ltd.

Applicant/creditor

Cooper Pacific Mortgage Investment Corporation

Applicant/creditor

Liberty Holdings Excell Corp.

Applicant/creditor

Ernst & Young Inc.

Monitor

CareVest Capital Inc.

Interested Party/creditor

Procedural Posture

CCAA Proceedings / Application to Determine Priority of Administrative Charge Following Set Aside of Initial Order (oral Reasons)

Legal Issues

  1. 1 Whether it is too late to challenge the priority of the Administrative Charge given the Initial Order was set aside but not entered nunc pro tunc
  2. 2 Whether the Administrative Charge continues to secure unpaid fees of the petitioners' counsel, the Monitor and the Monitor's counsel

Ratio Decidendi

Because the Initial Order was improperly obtained ex parte in circumstances where there was no urgency, the administrative charge's super-priority insofar as it secures the debtor's (Marine Drive's) legal fees must be set aside as inequitable; however, the administrative charge's priority is confirmed for the court-appointed Monitor and the Monitor's counsel because the Monitor performed court-assigned duties in reliance on the Initial Order and it would frustrate the CCAA's objectives to deprive monitors of that security.

Court Disposition

Administrative charge priority set aside with respect to Marine Drive's legal counsel fees; administrative charge priority confirmed for the Monitor (Ernst & Young Inc.) and the Monitor's counsel; parties to agree on allocation and mechanics or return to court for resolution.

Orders

  • Priority of the Administrative Charge set aside insofar as it secures fees of Marine Drive's legal counsel
  • Priority of the Administrative Charge confirmed for the Monitor (Ernst & Young Inc.) and the Monitor's counsel