Canada 3000 Files Under CCAA/BIA

On November 8, 2001, Canada 3000 Airlines Limited and Royal Aviation Inc. (collectively Canada 3000) obtained a stay of proceedings order under the Companies’ Creditors Arrangement Act (CCAA) in order to give it time to put forward a plan to its creditors. The order was intended to permit Canada 3000 to continue its operations while seeking to restructure its indebtedness. Later that night, Canada 3000 unexpectedly issued a news release stating that it had ceased operations and would no longer honour tickets. This was followed by a bankruptcy filing that weekend by Canada 3000 under the Bankruptcy and Insolvency Act (BIA). This is one of the few instances ever of co-existing proceedings under the CCAA and BIA. The trustee was specifically directed to continue the CCAA proceedings. While the trustee initially indicated there was still a possibility that Canada 3000 could be reorganized, those efforts did not materialize and the CCAA proceedings terminated on December 7, 2001.

Canada 3000 and Royal Aviation were represented on the initial application by William Burden and John Birch of Cassels Brock & Blackwell LLP. Torys LLP is representing two major groups of aircraft lessors, which together are leasing 25 of Canada 3000’s 38 leased aircraft. US Airways, which is leasing 12 737-200 aircraft, is represented by a team consisting of Michael Rotsztain, David Chernos and Marc Lavigne. International Lease Finance Corporation (ILFC), which owns/manages 13 Airbus aircraft, and Aviation Capital Group, which owns one Airbus aircraft, all of which are leased to Canada 3000, is represented by a team consisting of Scott Bomhof, Richard Conway, Melissa LaFlair, Elizabeth Evans and Jamie Feehely. Michael Feldman is providing assistance to both groups. McMillan Binch lawyers Andrew McFarlane and Chris Bennett are advising the trustee with respect to aircraft lease issues.

Other aircraft lessors are represented as follows: Pamela Huff, Jill Lawrie and Liz King of Blake, Cassels & Graydon LLP are representing CIT Leasing Corporation and NBB-Royal Lease Partnership One. GATX Corporation is represented by Craig Hill and Roger Jaipargas in Toronto and Marc Duchesne in Montreal, all of Borden Ladner Gervais LLP. Andrew Laidlaw and Edmond Lamek of Fasken Martineau DuMoulin LLP is representing Airbus Industrie. Peter Murphy, Barbara Grossman and John Russo of Fraser Milner Casgrain LLP are representing Ansett Worldwide Aviation, U.S.A. and MSA V. GECAS, Pegasus Aviation, Inc., Equis and GEAE are represented by Chris Besant and Don Gray of Casssels Brock & Blackwell.

Deloitte & Touche, the CCAA monitor and trustee in bankruptcy, is represented by David Murray, senior vice-president, and Andrew Kent, Neil Saxe, Daniel MacDonald, Paul Macdonald, John Kalm and Stephanie Donaher of McMillan Binch. Deloitte & Touche acted as trustee for the preliminary stage, but has been replaced by PricewaterhouseCoopers LLP, since Deloitte & Touche was the auditor of Canada 3000. Deloitte & Touche continues to assist PwC. PwC is represented by Kurt Bonokoski, and McMillan Binch continues as legal counsel.

Osler, Hoskin & Harcourt LLP is representing the Greater Toronto Airports Authority, with a team that includes Frederick Myers, Rupert Chartrand, Felice Zalcberg and Nancy Roberts. Gowling Lafleur Henderson LLP is representing NAV CANADA, with a team including Clifton Prophet, Allan Butcher and Robin Walker of the Toronto office and Christopher Fournier, Neil Wilson and Robert Laughton, Q.C., of the Ottawa office, along with John Deacon, vice-president and general counsel. The airport authorities of Ottawa, Halifax, Edmonton, Calgary, Winnipeg, Montreal and Vancouver are represented by a team that includes Mario Forte, Richard Desgagnes, John Porter and Alan Merskey, with assistance from Ruth Wahl and Charlotte Conlin, all of Ogilvy Renault. Gordon Capern and Marcus Knapp of Paliare Roland Rosenberg Rothstein LLP represent the Greater Moncton Airport Authority. The St. John’s International Airport Authority is represented by Paul Richardson of Strathy & Richardson Barri.

Michael Church and Denis Ellickson of Caley & Wray are representing Canadian Union of Public Employees (flight attendants). National Automobile, Aerospace, Transportation & General Workers Union of Canada (CAW) is represented by Frank Luce, associate counsel, CAW.

David Kee and Steven Weisz of Blake, Cassels & Graydon are acting for CIBC. Royal Bank of Canada is represented by Robert Thornton, Leanne Hoyles and Kyla Mahar of ThorntonGroutFinniganLLP. Bank of Montreal is represented by Dan Dowdall of Fraser Milner Casgrain. Michael MacNaughton, Donald Milner and John Grieve of Fasken Martineau DuMoulin are acting for Moneris Solutions Corporation.