Romspen, which Romspen refused, as this would presumably constitute a breach of the
funding agreement. Similarly, the Monitor does not report that this occurred. When the ARIO
was granted, no one, let alone Alderbridge, sought to increase the Administration Charge,
particularly when the Monitor reported that payment of professional fees was $153,000 less
than forecasted only weeks earlier. Alderbridge did not raise the matter of non-payment of its
pre-filing fees (or the forecasted fees) at that time.
[
94] In that event, I cannot see any basis for Alderbridge to assert that the Initial Order
and/or the cash flow forecasts provided any reasonable basis for it assuming that these pre-
filing amounts would be paid.
[
95] I also do not consider the fact of non-payment to Dentons after the filing as
representing a change in the factual matrix that would support an increase in the
Administration Charge. I agree the factual matrix has changed in respect of the overall
prospects for a restructuring; however, with respect to the possibility that Dentons’ fees will be
paid arising from this CCAA restructuring, nothing has changed. It always was uncertain
whether Dentons would be “caught up” for its pre-filing fees.
[
96] At the initial hearing, Alderbridge specifically sought and obtained the Administration
Charge in the amount of $300,000. At that time, Dentons’ was owed approximately $575,000.
If Dentons had sought to secure payment of this amount through the Administration Charge,
then I no have no doubt that the initial hearing would have been quite different. I also strongly
suspect that Romspen would have strongly opposed that relief and threatened a receivership,
based on Alderbridge’s consent to a receivership.
[
97] My views are consonant with Romspen’s position on this application. As Romspen’s
counsel submits, the terms of the CCAA filing were the result of a careful negotiation and
compromise between Alderbridge and Romspen. The $300,000 limit of the Administration
Charge was carefully negotiated in the context of allowing Alderbridge some further time to
sort out a restructuring within this CCAA proceeding, which would hopefully fully repay
Romspen. Failing agreement, a receivership would inevitably have resulted, in which case
there is no doubt that Dentons would not have been paid from the assets for its pre-filing fees.
Further, as agreed, the financing of the professional fees to the comeback hearing were on the
account of Gatland, not Romspen. The later Romspen interim financing was only put in place
because Alderbridge could not secure the next tranche that was needed to continue the
proceedings.
[
98] Alderbridge does not dispute that this was the backdrop to the granting of the Initial
Order.
[
99] I agree with Romspen that it reasonably expected that its exposure under the
Administration Charge would be only $300,000, unless it otherwise agreed.
[
100] In this context, I consider Alderbridge’s attempt to “revisit” the amount of the
Administration Charge to secure Dentons’ pre-filing fees to be unfair to Romspen and
unreasonable in the circumstances. At bottom, Alderbridge seeks to retroactively change key
aspects of the earlier agreement of the parties in terms of the amount of the Administration
Charge, which would unjustly prejudice Romspen.
[
101] I agree with Romspen that this case presents a unique set of circumstances in which to
consider an increase to the Administration Charge in that, viewed from a certain angle, that
increase is sought to secure pre-filing amounts still owing to Dentons. I acknowledge that
Dentons was entitled to apply the post-filing payments to its earlier invoices. However, I agree
with Romspen’s analysis as to how the amount paid to Dentons during the CCAA proceedings
(
$427,621) should be considered. That is, Dentons has been paid all of its post-filing accounts,
and approximately $200,000 of its pre-filing fees. Dentons’ allocation of amounts paid does
not change my view of the matter, particularly in terms of assessing Dentons’ involvement in
this proceeding, the post-filing payments it has received in this proceeding, and in light of the
CCAA policy objectives that I referred to above.
[
102] Dentons was and is entitled to the protections that were put in place under the Orders
granted in this proceeding. However, in essence, Alderbridge now seeks a retroactive
guarantee of the payment of the pre-filing fees at the expense of Romspen, which is neither