Success Fees And Super-Priority Charges In CCAA Proceedings

The restructuring of Sanjel Corporation and its affiliates (previously discussed here) continues to provide interesting developments on the application and interpretation of the Companies' Creditors Arrangement Act. In a recent decision in the case, the Court of Queen's Bench of Alberta interpreted an initial order so as to limit the super-priority of a financial advisor's court-ordered charge to the priority amount specified in the order. In doing so, the court rejected a unique argument made by the financial advisor that attempted to classify the amount claimed beyond the court-ordered charge as an obligation that had to be paid due to certain other provisions of the order.

In Sanjel, the debtors retained financial advisors prior to filing and, at the initial application, sought and obtained the approval of pre-filing engagement letters between the debtors and the respective advisors. The financial advisors also obtained the benefit of priming charges for all