Law Times

Page 12 March 20, 2017 • Law TiMes www.lawtimesnews.com things much more efficient and the legal fees would have been more constrained," he says. Despite the huge amounts spent, Rosenberg says most par- ties were happy to swallow the cost because of their satisfaction with the overall result. "The fees had a context," he says, noting that his clients, for example, ended up with a share of the proceeds almost six times larger than what they were orig- inally offered thanks to the trial decision, which settled on a pro rata distribution of assets. Zarnett says he wished the monitor's work could have been done "without as much com- plexity and cost," but he says that, in that case, it could not have fulfilled its role as an officer of the court. "Those fees were unfortu- nately necessary," he says. "We always have the interests of the stakeholders in mind." But Urquhart, who is sup- porting a group of former Nortel employees on long-term disabil- ity in their attempt to reopen the settlement, says she would have liked to see Ontario Superior Court Justice Frank Newbould send a message to the legal pro- fession by refusing to sanction the full fees charged by Ernst and Young, the court-appoint- ed monitor and its counsel at Goodmans, since they were the only professional fees subject to court approval in the matter. "I think they should have been subject to a claw-back. It's too much money," she says. However, in his Jan. 27 deci- sion approving EY's $123-mil- lion bill as well as a further $100 million for Goodmans, New- bould said it would be "unjust" to lay the blame for the file's over-lawyering at their door. In fact, Newbould found the unique circumstances of the case forced the monitor to take on a larger than normal role, that it resisted attempts to broaden the scope of the litigation at ev- ery turn and that it achieved "commendable" results. "These amounts are enor- mous by any measure, even tak- ing into account that they cover eight years of work. "However, when one under- stands the enormity of the work that had to be done by the Mon- itor and its counsel to regularize the insolvency proceedings, to gather in the assets and to pro- tect the interests of the Canadi- an creditors against the relent- less attacks made by the other estates, these amounts become more understandable. "It is unquestionable that the work of the Monitor added value to the assets," Newbould wrote. Still, Newbould had harsh words for the other parties in- volved for bringing too many pre-trial motions and attending court in Toronto with "far too many" lawyers, "some of whom (not the Monitor's counsel) spent much time on their black- berries." "That situation breeds dis- respect for the legal system in general and particularly so in a case in which thousands of pen- sioners and disability claimants have had to wait far too long for this proceeding to end," the judge wrote. "Everyone should be mindful of these concerns," Zarnett says. "We worked all the time knowing that our fees would be subject to court approval, but all insolvency professionals should bear that in mind." LT ture," he says. If the Supreme Court of Can- ada declines to rule again on the doctrine, Opolsky says equitable subordination may live on in Canada under the Bankruptcy and Insolvency Act. It was under that act in which the only Canadian case to ex- plicitly apply the doctrine pro- ceeded in 2009, coming in the Newfoundland and Labrador Supreme Court case of Oppen- heim v. J.J. Lacey Insurance Limited. The appeal court also leaves open that possibility in its Stelco decision, noting that s. 183 of the BIA "invests the bankruptcy court with 'such jurisdiction at law and in equity' as will enable it to exercise its bankruptcy ju- risdiction." "If equitable subordination is to become a part of Canadian law, it would appear that the BIA gives the bankruptcy court ex- plicit jurisdiction as a court of equity to ground such a remedy and a legislative purpose that is more relevant to the potential reordering of priorities," Strathy added. Beyond that, Opolsky says, federal politicians could include an amendment to finally add the doctrine to the CCAA dur- ing its next review of the act. "It's always possible, although I haven't sensed any appetite from Parliament that this is anywhere near the top of their priority list," he says. In the meantime, he says much depends on whether the Supreme Court finally rules on the doctrine. "If they don't, then it might fade into nothingness," Opol- sky says. LT Continued from page 10 Court refuses to apply doctrine in Stelco case Fees 'unfortunately necessary' Continued from page 11 Andrew Hatnay says equitable subordina- tion is 'more formally recognized in the U.S.' Celebrating Women In Law Bronze Sponsor Hosted in partnership with THE 2017 LEXPERT ZENITH AWARDS Celebrating the advancement of women in the legal profession. lexpert.ca/zenith Date: June 22, 2017 Location: Arcadian Court, Toronto 6 p.m. Cocktail Reception 7 p.m. Gala Dinner and Awards Presentation Business attire To book your attendance or to inquire about sponsorship, contact us at 416-649-8841 or MediaSolution.Sales@thomsonreuters.com Untitled-4 1 2017-03-15 8:39 AM FOCUS

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