Liquidating CCAAs - The Debate Continues

The Humber Valley Resort Corporation and related companies (collectively, "Humber Valley") applied for, and was granted, an Initial Order from the Newfoundland and Labrador Supreme Court (Trial Division) staying proceedings against it for one month under the CCAA. On this same date, the Court authorized a DIP lending facility of up to $600,000.00, with a first priority charge over various of Humber Valley's assets. At the end of the initial stay period, Humber Valley brought two further applications. The first was for and extension of an additional two months, and the second for approval of additional secured DIP financing in the amount of $1,400,000.00.

In assessing these applications, the Court first looked at the commonly accepted principles of the CCAA, being generally to allow an insolvent company room to maneuver whilst serving all parties interested in the outcome of the reorganization. The CCAA, where an extension of stay is sought, requires an applicant to