Our Work

Nathaniel Read-Ellis and David Ionis represent the respondents in this "bet-the-company" litigation addressing the interaction between secured lending enforcement, shareholder agreements, and mandatory arbitration clauses in the context of applications by creditors under the Bankruptcy and Insolvency Act. They successfully represented our clients in two critical, highly-contentious motions that have changed the landscape of the litigation. 

The Ontario Superior Court of Justice (Commercial List) granted our clients a stay of the creditor's application under s. 7(1) of the Arbitration Act, 1991, holding that there was an arguable case that the application—seeking declarations of default, judgment on secured debt, and the appointment of a receiver under the Bankruptcy and Insolvency Act—was, at least in part, “in respect of” disputes arising out of a unanimous shareholders’ agreement containing a broad arbitration clause. This is the first reported decision in Canada to find that an arbitrator has jurisdiction to appoint a receiver. 

The Court also dismissed the creditor’s cross-motion for the appointment of an interim receiver, confirming that allegations of information-sharing breaches and historical asset transfers will not, without evidence of immediate jeopardy, satisfy the stringent necessity threshold under s. 47 of the Bankruptcy and Insolvency Act.

You can read our more detailed discussion of the decision and its implications for future cases here.