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ARTICLE · 21 SEPTEMBER 2012

Lifting The Stay - Is The "Doomed To Fail" Argument Doomed To Fail?

McMillan LLP
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The British Columbia Supreme Court recently reviewed the considerations to be applied on an application by a secured creditor to lift a stay of proceedings granted in an initial order under the Companies' Creditors Arrangement Act (the "CCAA").

CanadaCorporate/Commercial Law
Adam Maerov
Adam Maerov
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The British Columbia Supreme Court recently reviewed the considerations to be applied on an application by a secured creditor to lift a stay of proceedings granted in an initial order under the Companies' Creditors Arrangement Act (the "CCAA"). In Re Azure Dynamics Corp.,1 Madam Justice Fitzpatrick confirmed that the classic "doomed to fail" argument will not be persuasive where the applicant creditor is not prejudiced, and where the objectives of the CCAA are best served, by allowing the stay of proceedings to continue.

Background

Azure Dynamics Corporation and its subsidiaries (the "Companies") are a global enterprise in the business of manufacturing and developing automotive technologies for electric and hybrid vehicles. The Companies have established business relationships with commercial vehicle manufacturers and users, including Ford Motor Company, Canada Post, Purolator and Fedex. Earlier this year, the Companies, in need of ongoing financing to fund

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