CanaSea Group: Full And Fair Disclosure Required In Ex Parte CCAA Applications

Applicants who seek ex parte relief under the Companies' Creditors Arrangement Act (CCAA) have an obligation to make full and fair disclosure of all material facts to the court. In the case of Re CanaSea PetroGas Group Holdings Limited, in which the debtor group of companies sought and obtained ex parte relief under the CCAA, the court took the extraordinary step of subsequently terminating a previously entered initial order and declaring the order void ab initio after learning additional facts that were not disclosed in the initial application.

FACTS

On September 19, 2014, CanaSea PetroGas Holdings Limited (a Canadian holding company) and its subsidiaries (collectively, the Applicants) filed for protection from creditors under the CCAA on an ex parte basis. Two of the Applicants were incorporated in Singapore and had issued the vast majority of the Applicants' indebtedness. Another Applicant (CPII) was incorporated in Canada, while the operating company (COGL),