IN THE COURT OF QUEEN’S BENCH OF NEW BRUNSWICK TRIAL ... · in the court of queen’s bench of...

Court File No. SJM-98-15

IN THE COURT OF QUEEN’S BENCH OF NEW BRUNSWICK TRIAL DIVISION

JUDICIAL DISTRICT OF SAINT JOHN

IN THE MATTER OF THE COMPANIES’ CREDITORS ARRANGEMENT ACT, R.S.C. 1985, c. C-36, AS AMENDED

AND IN THE MATTER OF A PLAN OF COMPROMISE OR ARRANGEMENT OF CO-OP ATLANTIC, CO-OP ENERGY LTD. AND C A REALTY LTD.

Applicants

MOTION RECORD (Returnable April 28, 2016)

MCINNES COOPER GOODMANS LLP Barristers & Solicitors Barristers & Solicitors Blue Cross Building, South Tower Bay Adelaide Centre 644 Main Street, Suite 400 333 Bay Street, Suite 3400 Moncton, NB E1C 1E2 Toronto, ON M5H 2S7

Chris Keirstead Robert J. Chadwick Michael Costello Logan Willis

Tel: (506) 857-8970 Tel: (416) 979-2211 Fax: (506) 857-4095 Fax: (416) 979-1234

Lawyers for the Applicants Lawyers for the Applicants





AND IN THE MATTER OF A PLAN OF COMPROMISE OR ARRANGEMENT OF CO-OP ATLANTIC, CO-OP ENERGY LTD. AND C A REALTY LTD.

INDEX

Tab

1.

2.

3.

Document

Notice of Motion

Draft Order

Affidavit of Bryan Inglis sworn April 21, 2016

A. Exhibit “A” – Initial Affidavit (without exhibits)

B. Exhibit “B” – Settlement Agreement


IN THE COURT OF QUEEN’S BENCH OF NEW BRUNSWICK

COUR DU BANC DE LA REINE DU NOUVEAU BRUNSWICK

TRIAL DIVISION DIVISION DE PREMIERE INSTANCE

JUDICIAL DISTRICT OF SAINT JOHN CIRCONSCRIPTION JUDICIARE DE SAINT JOHN

IN THE MATTER OF THE COMPANIES’ CREDITORS ARRANGEMENT ACT, R.S.C. 1985, C. C-36, AS AMENDED

AND IN THE MATTER OF A PLAN OF COMPROMISE OR ARRANGEMENT OF CO-OP ATLANTIC, CO-OP ENERGY LTD. AND C A REALTY LTD. (the “Applicants”)

NOTICE OF MOTION (FORM 37A)

AVIS DE MOTION (FORMULE 37A)

TO: The Service List attached as Schedule “A” and the Supplementary Notice List attached as Schedule “B”

DESTINAIRE:

The Applicants will apply to the Court at the Saint John Court House, 10 Peel Plaza, Saint John, New Brunswick on the 28th day of April, 2016 at 9:30 a.m. for an Order as set out hereunder.

Le demandeur (ou selon le cas) demandera à la Cour à ………..(lieu précis) ……….., le …….. 19….., à …… h ……., d’ordonner (indiquer l’ordonnance demandée, les motifs à discuter et les renvois aux dispositions léglislatives ou règles qui seront invoquées);

You are advised that: Sachez que:

(a) you are entitled to issue documents and present evidence at the hearing in English or French or both;

(a) vous avez le droit d’émettre des documents et de présenter votre preuve en français, en anglais ou dans les deux langues;

(b) the Applicants intend to proceed in the English language; and

(b) le demandeur a l’intention d’utiliser la langue anglais; et

(c) if you intend to proceed in the other official language, an interpreter may be required and you must so advise the clerk at least 7 days before the hearing.

(c) si vous avez l’intention d’utiliser l’autre langue officielle, les services d’un interprète pourront être requis et vous devrez en aviser le greffier au moins 7 jours avant l’audience.

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MOTION

1. Co-op Atlantic (“Co-op”), Co-op Energy Ltd. and C A Realty Ltd. (collectively, the

“Applicants”) make a motion pursuant to the Companies’ Creditors Arrangement Act,

R.S.C. 1985, c. C-36, as amended (the “CCAA”) for:1

(a) an Order substantially in the form attached at Tab 2 of the within Motion Record

(the “Distribution Order”), inter alia:

(i) approving and giving effect to the terms of a settlement agreement (the

“Settlement Agreement”) dated April 21, 2016 among the Applicants,

National Bank of Canada (“National Bank”), Concentra Trust in its

capacity as trustee of the secured debentures issued by Co-op

(“Concentra”), Farm Credit Canada (“FCC” and together with National

Bank and Concentra, the “Secured Creditors”), Provincial Holdings

Limited (“PHL”) and Eckler Ltd., in its capacity as administrator (the

“Pension Administrator”) of the Co-op Atlantic Employees’ Pension

Plan (the “Pension Plan”) (collectively, the “Settlement Parties”);

(ii) authorizing the Applicants to make certain distributions to their secured

creditors and the Pension Plan in accordance with the Settlement

Agreement;

(iii) granting the Pension Administrator, PHL, National Bank, FCC and

Concentra releases of claims against them in respect of matters relating to

the Applicants; and

(iv) terminating the Pension Litigation (as defined below); and

(b) such further and other relief as this Court deems just.

1 Capitalized terms that are not defined herein shall have the meaning given to them in the Affidavit of Bryan Inglis sworn April 21, 2016 (the “Inglis Affidavit”), attached at Tab 3 of the within Motion Record.

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2. The grounds for the motion are:

(a) on June 25, 2015, the Court granted the Initial Order, inter alia, (i) granting the

Applicants a stay of proceedings under the CCAA until July 24, 2015 (the “Stay

Period”), which Stay Period has been subsequently extended by Orders of this

Court to May 31, 2016, and (ii) appointing KPMG Inc. as CCAA Monitor in

respect of the Applicants (the “Monitor”);

(b) the Applicants, with the assistance of their financial advisor, KPMG Corporate

Finance, and, since its appointment, the Monitor, have carried out an extensive

Sale and Restructuring Process since the fall of 2014 to achieve transactions that

are in the best interests of the Applicants and their stakeholders;

(c) the Applicants have successfully completed a number of going-concern

transactions; they have now sold all of their core assets and businesses and have

no remaining business operations;

(d) as of April 20, 2016, the Applicants hold $32.3 million in proceeds;

(e) the Applicants have been engaged in extensive negotiations with their principal

stakeholders in an effort to achieve a global resolution that is fair, reasonable and

in the best interests of their stakeholders;

(f) on January 26, 2016, the Applicants sought from the Court, and the Court

provided, a process and timeline for the adjudication of certain matters relating to

the validity, priority and quantum of the claims (the “Pension Claims”) submitted

on behalf of the Pension Plan (the “Pension Litigation”); these matters needed to

be resolved in order to allow the Applicants to move forward with a global

resolution;

(g) simultaneously with the Pension Litigation, the Applicants continued to engage

with the Pension Administrator, the Secured Creditors and PHL in an effort to

achieve a global resolution that would, among other things, resolve significant

claims against the Applicants, reduce litigation and interest expenses, settle the

Pension Litigation, preserve value for unsecured creditors and allow the

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Applicants to make distributions to their creditors and complete the CCAA

proceedings as soon as possible;

(h) these negotiations have culminated in a settlement among the Applicants, the

Secured Creditors, the Pension Administrator and PHL;

(i) the Applicants believe the settlement represents the best outcome available in the

circumstances and is in the best interests of the Applicants and their stakeholders;

(j) the terms of the settlement are set out in the Settlement Agreement, which

provides for, among other things:

(i) comprehensive releases among the Settlement Parties;

(ii) the payment by the Applicants of certain distributions to their secured

creditors at a discount to the total amounts owed, certain distributions to

the Pension Plan and a payment by PHL to National Bank in reduction of

the amounts owing by the Applicants to National Bank (collectively, the

“Fixed Distributions”), all in accordance with the Distribution Order;

(iii) the full, final and irrevocable satisfaction, settlement and discharge of the

applicable secured claims, a corresponding amount of the Pension Claims

and the PHL guarantee; and

(iv) the termination of the Pension Litigation in accordance with the

Distribution Order;

(k) the Fixed Distributions consist of the following:

(i) National Bank will receive a fixed cash distribution of $13,443,000, plus

the amount of all reasonable professional costs and interest accruing on

the amounts owed by Co-op to National Bank from April 1, 2016 until the

date on which National Bank receives its Fixed Distribution;

(ii) FCC will receive a fixed cash distribution of $6,989,899, plus the amount

of all reasonable professional costs and interest accruing on the amounts

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owed by Co-op to FCC from April 1, 2016 until the date on which FCC

receives its Fixed Distribution;

(iii) Concentra will receive a fixed cash distribution of $2,500,000 for and on

behalf of the Debentureholders;

(iv) Interprovincial Cooperative Limited (“IPCO”) will receive the lesser of

(i) $218,457 and (ii) the proven amount of IPCO’s secured claim against

Co-op, if any, upon such claim becoming a proven Claim in accordance

with the Claims Procedure Order;

(v) PHL will pay National Bank $600,000 in satisfaction of the PHL

guarantee, and National Bank will fully, finally and irrevocably release

PHL from any further obligation under such guarantee;

(vi) the Pension Plan will receive a fixed cash distribution of $200,000 on

account of the professional fees and disbursements of the Pension

Administrator and the Pension Administrator’s counsel incurred from and

after the commencement of the CCAA proceedings in satisfaction of the

Court-ordered Pension Administration Charge (as defined in the Stay

Extension and Priority Order dated July 20, 2015); and

(vii) the Pension Plan will receive a fixed cash distribution of $5,350,000 on

account of a corresponding amount of the Pension Claims;

(l) the Settlement Agreement is conditional upon the issuance by the Court of the

Distribution Order and the receipt by the Monitor of opinions satisfactory to it

confirming the validity and enforceability of the security interests held by the

Secured Creditors;

(m) the proposed Distribution Order, if approved, would, among other things:

(i) approve the Settlement Agreement;

(ii) authorize the payment of the Fixed Distributions;

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(iii) confirm that certain of the Pension Claims are accepted in the aggregate

amount of $82,383,600 for voting and distribution purposes;

(iv) confirm the treatment of the Residual Pension Claims (as defined in the

Distribution Order) as allowed unsecured claims against Co-op, with no

secured, priority or deemed trust status;

(v) confirm the releases in the Settlement Agreement; and

(vi) release the parties to the Settlement Agreement (other than the Applicants)

from claims relating to the Applicants;

(n) if the Distribution Order is granted, the Applicants intend to make the Fixed

Distributions as soon as possible to stop the accrual of interest and fees in respect

of the claims that will be settled by those distributions, and to then bring forward

a CCAA plan of compromise or arrangement (a “CCAA Plan”) that would

provide for the distribution of the Applicants’ remaining proceeds to unsecured

creditors, following the payment of post-CCAA payables and other restructuring

costs;

(o) the settlement is fair, reasonable and in the best interests of all stakeholders

because it will, inter alia:

(i) settle and result in the discharge of a number of significant secured claims

against the Applicants at a discount to the actual amounts owed;

(ii) settle and result in the discharge of certain Pension Claims;

(iii) result in the distributions that will stop the further accrual of interest and

fees;

(iv) result in a full resolution of the Pension Litigation and avoid any further

costs associated with that litigation;

(v) preserve value for the Applicants’ unsecured creditors (which value may

not be available in the absence of the settlement); and

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(vi) allow the Applicants to continue their efforts to bring forward a CCAA

Plan and advance toward the completion of the CCAA proceedings;

(p) based on the current estimated range of proceeds ultimately available for

distribution, the settlement allows for an estimated range of approximately $1

million to 3 million to remain available for distribution to the Applicants’

unsecured creditors following the distributions made in connection with the

settlement;

(q) the Applicants, with the assistance of their advisors, have considered the proposed

settlement carefully and have determined that the relief requested represents the

optimal outcome available to the Applicants and their stakeholders in the

circumstances;

(r) the Applicants have been acting in good faith and with due diligence throughout

these proceedings;

(s) the Monitor has continued to supervise and provide assistance to the Applicants

with respect to their sale and restructuring efforts, and the Monitor supports the

proposed settlement;

(t) the circumstances that exist make it appropriate for the Court to grant the

proposed Distribution Order and provide the requested advice and directions;

(u) the provisions of the CCAA and this Court’s equitable and statutory jurisdiction

thereunder;

(v) Rules 1.02, 1.02.1, 1.03(2), 3.02, 37, 37.01 and 37.04(1) of the Rules of Court;

and

(w) such further and other grounds as counsel may advise and this Court may permit.

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3. The following documentary evidence will be used at the hearing of this motion:

(a) the Inglis Affidavit and the exhibits attached thereto;

(b) the Eighth Report of the Monitor, to be filed, and any appendices attached thereto;

and

(c) such further and other materials as counsel may advise and this Court may permit.

Dated April 21, 2016

MCINNES COOPER Barristers & Solicitors Blue Cross Building, South Tower 644 Main Street, Suite 400 Moncton, NB E1C 1E2

Chris Keirstead Michael Costello

Tel: (506) 857-8970 Fax: (506) 857-4095

Lawyers for the Applicants

GOODMANS LLP Barristers & Solicitors Bay Adelaide Centre 333 Bay Street, Suite 3400 Toronto, ON M5H 2S7

Robert J. Chadwick Logan Willis

Tel: (416) 979-2211 Fax: (416) 979-1234


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SCHEDULE A – SERVICE LIST





AND IN THE MATTER OF A PLAN OF COMPROMISE AND ARRANGEMENT OF CO-OP ATLANTIC, CO-OP ENERGY LTD. AND C A REALTY LTD.

Applicants

SERVICE LIST (As at April 21, 2016)

TO: MCINNES COOPER Blue Cross Building, South Tower 644 Main Street, Suite 400 Moncton, NB E1C 1E2

Fax: 506-857-4095

Remy Boudreau Tel: 506-877-0849 Email: [email protected]

Chris Keirstead Tel: 506-877-0845 Email: [email protected]


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AND TO: GOODMANS LLP Bay Adelaide Centre 333 Bay Street, Suite 3400 Toronto, ON M5H 2S7

Fax: 416-979-1234

Robert J. Chadwick Tel: 416-597-4285 Email: [email protected]

Logan Willis Tel: 416-597-6299 Email: [email protected]

Sydney Young Tel: 416-849-6965 Email: [email protected]


AND TO: KPMG INC. Bay Adelaide Centre 333 Bay Street, Suite 4600 Toronto, ON M5H 2S5

Fax: 416-777-3883

Randy Benson Tel: 416-777-8539 Email: [email protected]

Anamika Gadia Tel: 416-777-3842 Email: [email protected]

The Monitor

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KPMG INC. KPMG Tower, 600 de Maisonneuve Boulevard West Suite 1500 Montreal, QC H3A 0A3

Fax: 514-840-2442

Carl Adjami Tel: 514-840-2323 Email: [email protected]

The Monitor

AND TO: BLAKE, CASSELS & GRAYDON LLP 199 Bay Street Suite 4000, Commerce Court West Toronto, ON M5L 1A9

Fax: 416-863-2653

Pamela Huff Tel: 416-863-2958 Email: [email protected]

Bernard Boucher Tel: 514-982-4006 Email: [email protected]

Chris Burr Tel: 416-863-3261 Email: [email protected]

Lawyers for the Monitor

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AND TO: THORNTON GROUT FINNIGAN LLP 100 Wellington Street West, Suite 3200 P.O. Box 329 Toronto-Dominion Centre Toronto, ON M5K 1K7

Fax: 416-304-1313

Grant B. Moffat Tel: 416-304-0599 Email: [email protected]

Michael Shakra Tel: 416-304-0332 Email: [email protected]

Lawyers for National Bank of Canada

AND TO: COX & PALMER LLP Brunswick Square, Suite 1500 1 Germain Street Saint John, NB E2L 4V1

Fax: 506-632-8809

Josh McElman Tel: 506-633-2708 Email: [email protected]

Lawyers for National Bank of Canada

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AND TO: OFFICE OF THE ATTORNEY GENERAL Legal Services Branch P.O. Box 6000 Chancery Place 675 King Street, 2nd Floor Fredericton, NB E3B 5H1

Fax: 506-453-3275

Alan Rockwell Tel: 506-444-2453 Email: [email protected]

Philippe Thériault Tel: 506-453-2222 Email: [email protected]

Lawyers for Provincial Holdings Ltd.

AND TO: SUPERINTENDENT OF PENSIONS, FINANCIAL AND CONSUMER SERVICES COMMISSION Andal Building 225 King Street Fredericton, NB E3B 1E1

Fax: 506-457-7266

Angela Mazerolle Email: [email protected]

Jennifer Sutherland Green Email: [email protected]

AND TO: BUSINESS DEVELOPMENT BANK OF CANADA 766 Main Street Moncton, NB E1C 1E6

Bob Prince Email: [email protected]

BUSINESS DEVELOPMENT BANK OF CANADA 70 York Street, Suite 1202 Toronto, ON M5J 1S9

Russell French Tel: 416-954-5004 Email: [email protected]

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AND TO: AIRD & BERLIS LLP Brookfield Place, Suite 1800 181 Bay Street Toronto, ON M5J 2T9

Fax: 416-863-1515

Steven L. Graff Tel: 416-865-7726 Email: [email protected]

Lawyers for Business Development Bank of Canada

AND TO: UNIFOR National Office 205 Placer Court Toronto, ON M2H 3H9

Barry E. Wadsworth Email: [email protected]

AND TO: PINK LARKIN 1133 Regent Street, Suite 210 Fredericton, NB E3B 3Z2

Fax: 506-458-1127

Joël Michaud Tel: 506-458-1989 Email: [email protected]

Dominic Caron Tel: 506-458-1989 Email: [email protected]

Lawyers for Unifor

AND TO: UNITED FOOD AND COMMERCIAL WORKERS UNION (UFCW) Suite 300, Sun Tower 1550 Bedford Highway Bedford, NS B4A 1E6

Mark Dobson Atlantic Assistant to the Canadian Director Email: [email protected]

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AND TO: PINK LARKIN 1463 South Park Street, Suite 201 P.O. Box 36036 Halifax, NS B3J 3S9

Fax: 902-423-9588

Ronald A. Pink, Q.C. Tel: 902-423-7777 Email: [email protected]

Bettina Quistgaard Tel: 902-423-7777 Email: [email protected]

Lawyers for United Food and Commercial Workers Canada and United Food and Commercial Workers Canada Locals 1288P and 864

AND TO: ECKLER LTD. 1969 Upper Water Street, Suite 503 Halifax, NS B3J 3R7

Derek M. Gerard Tel: 902-490-3315 Email: [email protected]

Administrator of the Co-Op Atlantic Employees’ Pension Plan

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AND TO: STIKEMAN ELLIOTT LLP 5300 Commerce Court West 199 Bay Street Toronto, ON M5L 1B9

Fax: 416-947-0866

Elizabeth Pillon Tel: 416-869-5623 Email: [email protected]

Maria Konyukhova Tel: 416-869-5230 Email: [email protected]

Andrea Boctor Tel: 416-869-5230 Email: [email protected]

Lawyers for Eckler Ltd., Administrator of the Co-Op Atlantic Employees’ Pension Plan

AND TO: HARRISON PENSA LLP 450 Talbot Street London, ON N6A 5J6

Fax: 519-667-3362

Tom Robson Tel: 519-661-6766 Email: [email protected]

Michael Cassone Tel: 519-661-6765 Email: [email protected]

Lawyers for Farm Credit Canada

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AND TO: NOVA SCOTIA DEPARTMENT OF JUSTICE Legal Services Division Joseph Howe Building 1690 Hollis Street Halifax, NS B3J 3J9

Fax: 902-424-7120

Sean Foreman Tel: 902-424-6969 Email: [email protected]

Glenna Campbell Tel: 902-424-5073 Email: [email protected]

Lawyers for Nova Scotia Business Incorporated (Successor of Nova Scotia Business Development Corporation)

AND TO: JOHN DEERE FINANCIAL INC. 1001 Champlain Avenue, Suite 401 Burlington, ON L7L 5Z4

Fax: 905-319-5866

Steve A. Watson Tel: 905-319-4958 Email: [email protected]

AND TO: KELLOGG CANADA INC. 5350 Creekbank Road Mississauga, ON L4W 5S1

Blake Moran Tel: 905-290-5227 Email: [email protected]

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AND TO: BENNETT JONES LLP 100 King Street West, Suite 3400 Toronto, ON M5X 1A4

Fax: 416-863-1716

Raj Sahni Tel: 416-777-4804 Email: [email protected]

Mark Laugesen Tel: 416-777-4802 Email: [email protected]

Lawyers for Irving Oil

AND TO: BENNETT JONES LLP 100 King Street West, Suite 3400 Toronto, ON M5X 1A4

Fax: 416-863-1716

Ranjan Agarwal Tel: 416-777-6503 Email: [email protected]

Mark Laugesen Tel: 416-777-4802 Email: [email protected]

Lawyers for Nestle Canada Inc.

AND TO: WITTEN LLP, Barristers & Solicitors Suite 2500, Canadian Western Bank Place 10303 Jasper Avenue Edmonton, AB T5J 3N6

Fax: 780-429-2559

Howard J. Sniderman, Q.C. Tel: 780-441-3203 Email: [email protected]

Lawyers for Medicine Shoppe Atlantic Corporation and Medicine Shoppe Canada Corporation

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AND TO: GORMAN NASON 121 Germain Street P.O. Box 7286, Station A Saint John, NB E2L 4S6

Fax: 506-634-8685

Peter H. MacPhail Tel: 506-636-7324 Email: [email protected]

James L. Mockler Tel: 506-636-7320 Email: [email protected]

Lawyers for the Superintendent of Pensions for New Brunswick

AND TO: DE LAGE LANDEN FINANCIAL SERVICES CANADA INC. 3450 Superior Court, Unit 1 Oakville, ON L6L 0C4

Fax: 866-318-3447

Faseeh Ahmad Tel: 855-732-2818 Email: [email protected]

AND TO: COMINAR REAL ESTATE INVESTMENT TRUST Complexe Jules-Dallaire 2820 Laurier Boulevard – T3 Québec, QC G1V 0C1

Fax: 418-681-2946

Manon Deslauriers Email: [email protected]

Philippe Côté Email: [email protected]

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AND TO: STEWART McKELVEY Purdy’s Wharf Tower One 900 – 1959 Upper Water Street P.O. Box 997 Halifax, NS B3J 2X2

Fax: 902-420-1417

Maurice P. Chiasson, Q.C. Tel: 902-420-3200 Email: [email protected]

Lawyers for Cominar Real Estate Investment Trust

AND TO: GOWLING LAFLEUR HENDERSON LLP 3700 – 1 Place Ville Marie Montréal, QC H3B 3P4

Fax: 514-876-9048

François Viau Tel: 514-392-9530 Email: [email protected]

Geneviève Cloutier Tel: 514-392-9448 Email: [email protected]

Lawyers for Imperial Oil

AND TO: BINGHAM LAW 95 Foundry Street, Suite 300 Moncton, NB E1C 5H7

Fax: 506-857-2017

Edwin (Ted) Ehrhardt, Q.C. Tel: 506-857-6309 Email: [email protected]

Lawyers for Imperial Oil

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AND TO: WICKWIRE HOLM 1801 Hollis Street, Suite 1800 Halifax, NS B3J 2X6

Fax: 902-429-8215

Carl Holm Tel: 902-429-7001 Email: [email protected]

Lawyers for HSBC

AND TO: McCARTHY TÉTRAULT LLP 1000 De La Gauchetière Street West, Suite 2500 Montreal, QC H3B 0A2

Fax: 514-875-6246

Alain N. Tardif Tel: 514-397-4274 Email: [email protected]

Anne-Marie Naud Tel: 418-521-3044 Email: [email protected]

Lawyers for La Coop Fédérée

AND TO: ATLANTIC POULTRY INCORPORATED 791 Belcher Street, RR1 Port Williams, NS B0P 1T0

Ian Blenkharn Tel: 902-670-0616 Email: [email protected]

AND TO: PATTERSON LAW 10 Church Street Truro, NS B2N 3Z6

George L. White Tel: 902-896-6163 Email: [email protected]

Jennifer Hamilton Upham Tel: 902-896-6192 Email: [email protected]

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AND TO: TEVA CANADA LTD. 30 Novopharm Court Toronto, ON M1B 2K9

Terry Reid Legal Counsel Tel: 416-940-6798 Email: [email protected]

AND TO: FORBES ROTH BASQUE 814 Main Street, Suite 300 P.O. Box 480 Moncton, NB E1C 8L9

Robert Basque Tel: 506-857-4880 Email: [email protected]

Lawyers for Certain Residential Property Corporations

AND TO: COX & PALMER LLP Brunswick Square, Suite 1500 1 Germain Street St. John, NB E2L 4V1

Fax: 506-632-8809

Peter R. Forestell, QC Tel: 506-633-2715 Email: [email protected]

Jane E. MacEachern Tel: 506-633-2777 Email: [email protected]

Lawyers for CST Canada Co.

AND TO: CONCENTRA FINANCIAL 333 3rd Ave N Saskatoon, SK S7K 2M2

Fax: 306-956-3003

Val Lucyshyn Tel: 306-956-1914 Email: [email protected]

Debenture Trustee

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AND TO: CONCENTRA FINANCIAL 333 3rd Ave N Saskatoon, SK S7K 2M2

Fax: 306-956-3003

Kezia Sonntag Tel: 306-956-5170 Email: [email protected]

Wayne Pederson Email: [email protected]

Lawyers for Concentra Financial

AND TO: TRIPP BUSINESS LAW Place de l’Assomption 770 Main Street, 10th Floor Box 6011 Moncton, NB E1C 1E7

Fax: 888-316-4697

Kevin Moreau Student-at-Law Tel: 506-830-8747, ext. 203 Email: [email protected]

Lawyers for Peak Foods LLC

AND TO: LAWSON CREAMER 133 Prince William Street, Suite 801 Saint John, NB E2L 2B5

Fax: 506-633-0465

Kelly VanBuskirk Tel: 506-633-3535 Email: [email protected]

Lawyers for Co-op General and Co-op Life

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AND TO: AIRD & BERLIS LLP Brookfield Place, 181 Bay Street Suite 1800, Box 754 Toronto, ON M5J 2T9

Fax: 416-863-1515

Timothy M. Lowman Tel: 416-865-7715 Email: [email protected]

Ian Aversa Tel: 416-865-3082 Email: [email protected]

Lawyers for Kraft Canada Inc.

AND TO: BINGHAM LAW 95 Foundry Street, Suite 300 Moncton, NB 31C 5H7

Fax: 506-857-2017

Michiel J. Vandenberg Tel: 506-383-6390 Email: [email protected]

Lawyers for Waycar Holdings Ltd.

AND TO: DELEHANTY RINZLER DRUCKMAN 720 Main Street Moncton, NB E1C 1E4

Fax: 506-857-3592

M. Morley Rinzler Tel: 506-858-1800 Email: [email protected]

Lawyers for 684318 NB Ltd.

AND TO: MRS. AVIS E. CHAPMAN 19 Lawrence Street Amherst, NS B4H 3G5

Fax: 902-667-2754

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AND TO: MACPHERSON LESLIE & TYERMAN LLP 1500 – 410 22nd Street East Saskatoon, SK S7K 5T6

Jeffrey M. Lee, Q.C. Tel: 306.975.7136 Email: [email protected]

Paul Olfert Tel: 306.956.6970 Email: [email protected]

Lawyers for Interprovincial Cooperative Limited

AND TO: NATHAN SEAMAN WATTS 24 Webster Court Kentville, NS B4N 1H2

Fax: 902.678.1615

Peter D. Nathanson Tel: 902.678.1616 Email: [email protected]

Lawyers for Scotian Gold Co-operative Limited

AND TO: PRIMESHARES WORLD MARKETS 261 Fifth Avenue, 22nd Floor New York, NY 10016

Fax: 212.889.2232

Neil Desai Tel: 212.889.3088 Email: [email protected]

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SCHEDULE B – SUPPLEMENTARY NOTICE LIST





AND IN THE MATTER OF A PLAN OF COMPROMISE AND ARRANGEMENT OF CO-OP ATLANTIC, CO-OP ENERGY LTD. AND C A REALTY LTD.

Applicants

SUPPLEMENTARY NOTICE LIST (As at April 21, 2016)

GOVERNMENT ENTITIES

TO: DEPARTMENT OF JUSTICE (CANADA) The Exchange Tower P.O. Box 36 130 King Street West, Suite 3400 Toronto, ON M5X 1K6

Fax: 416-973-0810

Diane Winters Tel: 416-973-3172 Email: [email protected]

AND TO: DEPARTMENT OF FINANCE (NEW BRUNSWICK) Chancery Place 675 King Street Fredericton, NB E3B 1E9

AND TO: ENVIRONMENT AND LOCAL GOVERNMENT (NEW BRUNSWICK) 20 McGloin Street Fredericton, NB E3A 5T8

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AND TO: NOVA SCOTIA DEPARTMENT OF FINANCE P.O. Box 187 1723 Hollis Street Halifax, NS B3J 2N3

Doug Moodie

AND TO: MINISTRY OF THE ENVIRONMENT (NOVA SCOTIA) Compliance Division, Colchester County 36 Inglis Place Truro, NS B2N 4B4

Brad Skinner

AND TO: DEPARTMENT OF FINANCE (NEWFOUNDLAND AND LABRADOR) Taxation and Fiscal Policy Branch P.O. Box 8700 East Block Confederation Building, Main Floor St. John’s, NL A1B 4J6

Deputy Minister

AND TO: ATTORNEY GENERAL OF NEWFOUNDLAND AND LABRADOR 4th Floor, East Block, Confederation Building P.O. Box 8700 St. John’s, NL A1M 4J6

AND TO: THE MINISTER OF FOREST RESOURCES AND AGRIFOODS (NEWFOUNDLAND AND LABRADOR) Natural Resources Building 50 Elizabeth Avenue P.O. Box 8700 St. John’s, NL A1B 4J6

Deputy Minister

AND TO: DEPARTMENT OF FINANCE AND ENERGY (PRINCE EDWARD ISLAND) Tax Administration and Compliance Services Section Shaw Building, 1st Floor 95 Rochford Street P.O. Box 2000 Charlottetown, PE C1A 7N8

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AND TO: MINISTRY OF THE ENVIRONMENT (PRINCE EDWARD ISLAND) Jones Building, 4th Floor 11 Kent Street P.O. Box 2000 Charlottetown, PE C1A 7N8

FORMER SALARIED EMPLOYEES

AND TO: THE FORMER SALARIED EMPLOYEES ON RECORD OF THE APPLICANTS (PENSION AND NON-PENSION)

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IN THE MATTER OF THE COMPANIES’ CREDITORS ARRANGEMENT ACT, R.S.C. 1985, c. C-36, AS AMENDED AND IN THE MATTER OF A PLAN OF COMPROMISE OR ARRANGEMENT OF CO-OP ATLANTIC, CO-OP ENERGY LTD. AND C A REALTY LTD.

Applicants

Court File No: SJM-98-15

COURT OF QUEEN’S BENCH OF NEW BRUNSWICK

Proceeding filed in Saint John

NOTICE OF MOTION (Returnable April 28, 2016)


Chris Keirstead / Michael Costello Tel: (506) 857-8970 Fax: (506) 857-4095


Robert J. Chadwick / Logan Willis Tel: (416) 979-2211 Fax: (416) 979-1234


29




THE HONOURABLE

JUSTICE STEPHENSON

) ) )

, THE

DAY OF APRIL, 2016

IN THE MATTER OF THE COMPANIES' CREDITORS ARRANGEMENT ACT, R.S.C. 1985, c. C-36, AS AMENDED

AND IN THE MATTER OF A PLAN OF COMPROMISE OR ARRANGEMENT OF CO-OP ATLANTIC, CO-OP ENERGY LTD.

AND C A REALTY LTD.

SETTLEMENT AND DISTRIBUTION ORDER

THIS MOTION, made by Co-op Atlantic, Co-op Energy Ltd. and C A Realty Ltd.

(collectively, the “Applicants”), pursuant to the Companies’ Creditors Arrangement Act, R.S.C.

1985, c. C-36, as amended (the “CCAA”) was heard this day at 10 Peel Plaza, Saint John, New

Brunswick.

ON READING the affidavit of Bryan Inglis sworn April , 2016 and the exhibits thereto

(the “Inglis Affidavit”) and the Eighth Report of KPMG Inc. in its capacity as CCAA monitor of

the Applicants (the “Monitor”), and on hearing the submissions of counsel for the Applicants,

the Monitor and such other counsel as were present and wished to be heard, and on reading the

affidavit of service of sworn April , 2016,

SERVICE AND DEFINITIONS

1. THIS COURT ORDERS that the service and notice of this Motion are hereby abridged

and validated and this Motion is properly returnable today without further service or notice

thereof.

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2. THIS COURT ORDERS that, unless otherwise indicated or defined herein, capitalized

terms used in this Order shall have the meanings given to them in Schedule A hereto.

SETTLEMENT AGREEMENT

3. THIS COURT ORDERS that the Settlement Agreement dated April 21, 2016 among

the Applicants, National Bank of Canada (“National Bank”), Farm Credit Canada (“FCC”),

Concentra Trust (“Concentra”), Provincial Holdings Ltd. (“PHL”) and Eckler Ltd., in its

capacity as administrator (the “Pension Administrator”) of the Co-op Employees’ Pension Plan

(the “Pension Plan”), attached as Exhibit “B” to the Inglis Affidavit (the “Settlement

Agreement”) is hereby approved. The Applicants and Monitor are hereby authorized to take

such additional steps and execute such additional documents as may be necessary or desirable for

the implementation of the Settlement Agreement.

4. THIS COURT ORDERS that the obligations of the Applicants in the Settlement

Agreement shall be treated as unaffected in any plan of compromise or arrangement filed by the

Applicants under the CCAA.

DISTRIBUTIONS TO SECURED CREDITORS

5. THIS COURT ORDERS that the Applicants are hereby authorized to irrevocably pay

the following distributions to the secured creditors of the Applicants:

(a) a distribution to National Bank equal to $13,443,000 plus the amount of all

reasonable professional costs and interest accruing on the amounts owed by the

Applicants to National Bank from April 1, 2016 until the date on which National

Bank receives its distribution;

(b) a distribution to FCC equal to $6,989,899 plus the amount of all reasonable

professional costs and interest accruing on the amounts owed by the Applicants to

FCC from April 1, 2016 until the date on which FCC receives its distribution;

(c) a distribution of $2,500,000 to Concentra, in its capacity as trustee of the secured

debentures issued by the Applicants (the “Debentures”); and

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(d) a distribution equal to the lesser of (i) $218,457 and (ii) the allowed amount of the

secured claim of Interprovincial Co-operative Limited (“IPCO”), if any, as

determined upon the agreement of the Applicants, the Monitor and IPCO or

further Order of this Court.

6. THIS COURT ORDERS that PHL shall promptly upon the granting of this Order

irrevocably pay to National Bank $600,000 on account of the Agreement Regarding PHL

Guarantees dated March 20, 2015 among Co-op Atlantic, National Bank and PHL (the “PHL

Guarantee”), and upon the Effective Date, PHL shall be fully, finally and irrevocably released

from any further obligation under the PHL Guarantee and the Applicants shall have no further

liabilities or obligations whatsoever in respect of the payment by PHL set forth in this paragraph

or the PHL Guarantee.

7. THIS COURT ORDERS that upon the Effective Date, any and all Claims of National

Bank (but excluding the Continuing NBC Claims), FCC, Concentra, the Debentureholders (in

their capacity as such) and IPCO, as applicable, shall be fully, finally and irrevocably satisfied,

settled and discharged, and thereafter the Applicants shall have no further liabilities or

obligations whatsoever to any of National Bank (other than with respect to the Continuing NBC

Claims), Concentra, the Debentureholders (in their capacity as such) or IPCO. Notwithstanding

the foregoing, this paragraph 7 shall not apply to IPCO until IPCO has received the distribution

to which it is entitled, if any, in accordance with paragraph 5(d) hereof.

8. THIS COURT ORDERS that upon the Effective Date, all Encumbrances and

registrations relating to the secured Claims of National Bank (other than the Continuing NBC

Claims), FCC, Concentra and IPCO, as applicable, shall be irrevocably expunged and

discharged. Notwithstanding the foregoing, this paragraph 8 shall not apply to IPCO until IPCO

has received the distribution to which it is entitled, if any, in accordance with paragraph 5(d)

hereof. After the Effective Date, the Applicants are hereby authorized to register this Order in

such public registries as they deem necessary to document the discharge of the secured claims of

National Bank (other than the Continuing NBC Claims), FCC and Concentra as provided in this

paragraph 8. In the case of any registrations related to the secured claims of IPCO, the

Applicants are hereby authorized to make any such registrations of this Order after IPCO has

received the distribution to which it is entitled, if any, in accordance with paragraph 5(d) hereof.

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DISTRIBUTIONS TO THE PENSION PLAN

9. THIS COURT ORDERS that the Claims of the Pension Administrator shall be allowed,

for the purposes of paragraph 19(a) of the Claims Procedure Order of this Court granted October

1, 2015 (the “Claims Procedure Order”), for voting and distribution purposes, in the aggregate

amount of $82,383,600 (the “Allowed Pension Claims”). The Claim filed by the Pension

Administrator for a constructive trust in the amount of $250,000 shall be deemed to be

irrevocably withdrawn.

10. THIS COURT ORDERS that the Applicants are hereby authorized to irrevocably pay

the following distributions to the Pension Plan:

(a) $200,000 on account of the professional fees and disbursements of the Pension

Administrator and the Pension Administrator’s counsel incurred from and after

the commencement of the CCAA proceedings; and

(b) $5,350,000 to the Pension Plan on account of a corresponding amount of the

Allowed Pension Claims.

11. THIS COURT ORDERS that the receipt by the Pension Plan of the amounts described

in paragraph 10(a) hereof shall result in:

(a) the full, final and irrevocable satisfaction, settlement and discharge of any and all

claims against the Applicants for professional fees and disbursements of the

Pension Administrator and the Pension Administrator’s counsel; and

(b) the full, final and irrevocable discharge and termination of the Pension

Administrator’s Charge (as defined in the Stay Extension and Priority Order dated

July 20, 2015).

12. THIS COURT ORDERS that the receipt by the Pension Plan of the amounts described

in paragraph 10(b) hereof shall result in the full, final and irrevocable satisfaction, settlement and

discharge of a corresponding amount of the Allowed Pension Claims (the “Satisfied Pension

Claims”), and thereafter the Applicants shall have no further liabilities or obligations whatsoever

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to the Pension Administrator, the Pension Plan or any beneficiary of the Pension Plan in respect

of the Satisfied Pension Claims.

13. THIS COURT ORDERS that all Residual Pension Claims shall be treated as allowed

unsecured Claims against Co-op Atlantic, with no secured, priority or deemed trust status.

RELEASES

14. THIS COURT ORDERS that the terms, conditions and releases in Sections 3.1, 3.2 and

3.3 of the Settlement Agreement are hereby confirmed and deemed to be binding and effective.

15. THIS COURT ORDERS that subject to and effective upon the occurrence of the

Effective Date, any and all Released Claims of any Person that received notice of the within

motion against any of National Bank, FCC, Concentra (for itself and on behalf of the

Debentureholders), PHL or the Pension Administrator (for itself and on behalf of the Pension

Plan) (the “Settlement Parties”) are hereby irrevocably and forever released and discharged (the

“Settlement Party Released Claims”). Subject to and effective upon the occurrence of the

Effective Date, all Settlement Party Released Claims are hereby fully, finally, irrevocably and

forever waived, discharged, released, cancelled and barred as against the Settlement Parties, all

to the fullest extent permitted by applicable law; provided that nothing herein shall waive,

discharge, release, cancel or bar (i) the rights of the Settlement Parties and the Applicants to

enforce the Settlement Parties’ obligations under the Settlement Agreement, or (ii) the rights of

the Debentureholders to receive the applicable amounts distributable by Concentra in accordance

with the deed of trust governing the secured debentures issued by Co-op Atlantic, and nothing in

this paragraph shall affect the terms of the releases of the Settlement Parties as amongst each

other as set forth in the Settlement Agreement and paragraph 14 of this Order.

16. THIS COURT ORDERS that the litigation in these proceedings concerning the validity,

priority and quantum of certain claims filed on behalf of the Pension Plan (the “Pension

Litigation”) is hereby terminated, and the Applicants’ motion for advice and direction in respect

thereof is hereby deemed to be withdrawn. No action or other litigation or proceeding shall be

commenced in respect of the validity, priority or quantum of the claims filed on behalf of the

Pension Plan, except with the consent of the Applicants and the Monitor or prior leave of this

Court.

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GENERAL

17. THIS COURT ORDERS that, notwithstanding:

(a) the pendency of the CCAA proceedings or the termination of the CCAA

proceedings;

(b) any application for a bankruptcy order or bankruptcy Order now or hereafter

issued pursuant to the Bankruptcy and Insolvency Act (the "BIA") in respect of

the Applicants; or

(c) any assignment in bankruptcy made in respect of the Applicants,

the obligations of the parties to the Settlement Agreement and the distributions and payments

made or to be made pursuant to the terms of this Order are final and irreversible and shall be

binding upon any trustee in bankruptcy that may be appointed in respect of the Applicants and

shall not be void or voidable by creditors of the Applicants, nor shall any such obligations,

payments or distributions constitute or be deemed to be fraudulent preferences, assignments,

fraudulent conveyances, or other reviewable transactions under the BIA or any other applicable

federal or provincial law, nor shall they constitute conduct which is oppressive, unfairly

prejudicial to or which unfairly disregards the interests of any person.

18. THIS COURT HEREBY REQUESTS the aid and recognition of any court, tribunal,

regulatory or administrative body having jurisdiction in Canada or outside Canada to give effect

to this Order and to assist the Applicants, the Monitor and their respective agents in carrying out

the terms of this Order. All courts, tribunals, regulatory and administrative bodies are hereby

respectfully requested to make such orders and to provide such assistance to the Applicants and

to the Monitor, as an officer of this Court, as may be necessary or desirable to give effect to this

Order, to grant representative status to the Monitor in any foreign proceeding, or to assist the

Applicants and the Monitor and their respective agents in carrying out the terms of this Order.

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19. THIS COURT ORDERS that this Order and all of its provisions are effective as of

12:01 a.m. Atlantic Standard/Daylight Time on the date of this Order.

Dated at Saint John, New Brunswick this

_____ day of_________, 2016.

____________________________________

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SCHEDULE A

“Claims” shall have the meaning given to such term in the Claims Procedure Order.

“Continuing NBC Claims” means: (i) the obligations of the Applicants pursuant to the operation of account and similar agreements in respect of the accounts maintained by each the Applicants with National Bank (collectively, the “Accounts”); and (ii) any losses or liabilities which National Bank may incur at any time as a result of any deposits, cheques or similar instruments for the payment of money which have been credited to any of the Accounts both before and after the date of this Order which are returned to National Bank as dishonoured, discredited, reversed or returned, together with all reasonable legal fees and disbursements incurred by National Bank in connection with the foregoing.

“Debentureholders” means the holders of the Debentures.

“Effective Date” means the date upon which all of the following events have occurred: (i) each of the Pension Plan, National Bank, FCC and Concentra has received the Fixed Distributions; (ii) all applicable appeal periods related to this Order have expired, been waived or been otherwise dealt with to the satisfaction of the Parties, and any appeal or motion for leave to appeal in respect of this Order has finally been disposed of with no further right of appeal or leave to appeal existing; and (iii) the conditions in section 4.1 of the Settlement Agreement have been satisfied or waived in accordance with that provision.

“Encumbrance” means any charge, mortgage, lien, pledge, claim, restriction, hypothec, adverse interest, security interest or other encumbrance whether created or arising by agreement, statute or otherwise at law, attaching to property, interests or rights and shall be construed in the widest possible terms and principles known under the law applicable to such property, interests or rights and whether or not they constitute specific or floating charges as those terms are understood under the laws of the Province of New Brunswick.

“Fixed Distributions” means the distributions described in paragraphs 2(a), (b) and (c), 3 and 7(a) and (b) of the Restructuring Outline attached as Schedule B to the Settlement Agreement (the “Restructuring Outline”).

“Person” shall have the meaning given to such term in the Claims Procedure Order.

“Released Claims” means any and all demands, claims, actions, causes of action, counterclaims, suits, debts, sums of money, accounts, covenants, damages, judgments, orders, including for injunctive relief or specific performance and compliance orders, expenses, executions, Encumbrances and other recoveries on account of any liability, obligation, demand or cause of action of whatever nature, including claims for contribution or indemnity, whether known or unknown, matured or unmatured, direct, indirect or derivative, foreseen or unforeseen, existing or hereafter arising, based in whole or in part on any act, omission, transaction, duty, responsibility, indebtedness, liability, obligation, dealing or other occurrence existing or taking place on or prior to the Effective Date arising in connection with the Applicants, the Applicants’ restructuring, the Applicants’ pension plans, the claims asserted by the Pension Administrator and the Pension Litigation.

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“Residual Pension Claims” means all Pension Claims against the Applicants that remain following the settlement, satisfaction and/or discharge of the Pension Claims referred to in paragraph 7 of the Restructuring Outline.

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ORDER






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Applicants

Court File No: SJM-98-15


Trial Division


MOTION RECORD (Returnable April 28, 2016)






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