Hayes Forest Services Limited (Re)

Hayes Forest Services Limited (Re)

Under the CCAA the court exercised its discretion to determine the consent issue rather than compel arbitration, concluded Teal unreasonably withheld consent to assign the contract to North View on the facts, and approved the sale to North View as being in the best interests of Hayes' creditors; Teal's applications to lift the stay and to approve sale to 0858434 B.C. Ltd. were dismissed.

Citation
2009 BCSC 1169
Parties
Debtor/applicant: Hayes Forest Services Limited; Related Debtor: Hayes Holding Services Limited; Related Debtor: Hayes Helicopter Services Ltd.; Licence Holder/respondent: Teal Cedar Products Ltd.; Proposed Assignee/purchaser: North View Timber Ltd.; Alternative Proposed Purchaser: 0858434 B.C. Ltd.; Intervenor/creditor: Western Forest Products Inc.; Intervenor/creditor: G.E. Canada Corporation; Employee Representatives/creditors: Steelworkers Locals 1-80 and 1-85; Secured Creditor/intervenor: Canadian Imperial Bank of Commerce
Court
Supreme Court of British Columbia
Jurisdiction
Canada
Judgment Date
27 August 2009
Procedural Posture
CCAA Restructuring and Sale Approval / Chambers Hearing for Approval of Assignment and Related Relief (reasons for Judgment)
Outcome
Application granted in part: court dismisses Teal's application to lift the stay and approves assignment of the contract to North View; Teal's alternative sale to 0858434 B.C. Ltd. dismissed.
Legal Topics
Assignment of Replaceable Logging Contract, Unreasonable Withholding of Consent, Court Vs Arbitration Under CCAA, Approval of Asset Sale, Creditors' Interests
Source Language
English
Insolvency/ccaa Contract Law Administrative/forestry Regulation Arbitration/jurisdiction Assignment of Replaceable Logging Contract Unreasonable Withholding of Consent Court Vs Arbitration Under CCAA Approval of Asset Sale +1 more

Case Brief

Summary, issues, holding and outcome

More case intelligence is available

Unlock the full research layer for this judgment.

Full judgment text Legal principles 4 Authorities cited 15 Party arguments 2 Amounts and remedies 9
Sign in to unlock

Parties

Hayes Forest Services Limited

Debtor/applicant

Hayes Holding Services Limited

Related Debtor

Hayes Helicopter Services Ltd.

Related Debtor

Teal Cedar Products Ltd.

Licence Holder/respondent

North View Timber Ltd.

Proposed Assignee/purchaser

0858434 B.C. Ltd.

Alternative Proposed Purchaser

Western Forest Products Inc.

Intervenor/creditor

G.E. Canada Corporation

Intervenor/creditor

Steelworkers Locals 1-80 and 1-85

Employee Representatives/creditors

Canadian Imperial Bank of Commerce

Secured Creditor/intervenor

Procedural Posture

CCAA Restructuring and Sale Approval / Chambers Hearing for Approval of Assignment and Related Relief (reasons for Judgment)

Legal Issues

  1. 1 Whether the arbitration mechanism under the contract must be followed or the CCAA court may decide the dispute
  2. 2 Whether Teal unreasonably withheld consent to assignment of the replaceable stump to dump logging contract
  3. 3 Whether the CCAA court can approve the assignment despite contractual consent being withheld

Ratio Decidendi

Under the CCAA the court exercised its discretion to determine the consent issue rather than compel arbitration, concluded Teal unreasonably withheld consent to assign the contract to North View on the facts, and approved the sale to North View as being in the best interests of Hayes' creditors; Teal's applications to lift the stay and to approve sale to 0858434 B.C. Ltd. were dismissed.

Court Disposition

Application granted in part: court dismisses Teal's application to lift the stay and approves assignment of the contract to North View; Teal's alternative sale to 0858434 B.C. Ltd. dismissed.

Orders

  • Teal's application to lift the stay of proceedings dismissed
  • Sale/assignment of the replaceable stump to dump logging contract from Hayes to North View Timber Ltd. approved under CCAA