Marble, columns and stairs
Feb 18, 2021

McMillan acted as counsel to PricewaterhouseCoopers Inc. (“PwC”) in its capacity as monitor in the Companies’ Creditors Arrangement Act (“CCAA”) proceedings of Quest University Canada and, subsequently, as trustee in the related bankruptcy proceedings of Quest Guardian Properties Ltd. (“Guardian”).

Quest University is a private secular university, established by statute with the power to grant degrees.

After a lengthy sale process (complicated by measures imposed in response to the COVID-19 pandemic), Quest University entered into a sale transaction with Primacorp Ventures Inc., which was to be completed in conjunction with a plan of arrangement with Quest University’s creditors. In light of opposition by a number of creditors, Primacorp transaction ultimately was approved and implemented by way of a reverse vesting order, which preserved Quest University’s degree granting power. The reverse vesting order was the first in British Columbia, granted following a highly contested hearing. The monitor supported Quest University’s application for the reverse vesting order.

The reverse vesting order contemplated that the liabilities of Quest University would be transferred to its subsidiary, Guardian, to be dealt with by way of a plan of arrangement put forward by Guardian.  However, the plan was not approved by Guardian’s creditors (including the largest unsecured creditor, which previously had opposed the reverse vesting order), and the monitor was authorized to assign Guardian into bankruptcy. The monitor was subsequently appointed trustee in bankruptcy under the provisions of the Bankruptcy and Insolvency Act (“BIA”).

During the course of the CCAA proceedings, PwC, in its capacity as monitor, had assisted Quest University with the implementation of a claims process. A large number of creditors who had submitted claims in the CCAA claims process were students who had relatively small claims.  In order to avoid creditors who previously had submitted claims having to submit those claims again, the trustee applied for and was granted an order that allowing creditors that had filed claims in the CCAA claims process to rely upon those claims in the bankruptcy as well.  The application was granted, notwithstanding opposition by the same large unsecured creditor that had opposed approval of Guardian’s plan.

The McMillan team was led by Vicki Tickle and included Kourtney Rylands and Daniel Shouldice.

McMillan’s Restructuring & Insolvency Group is one of Canada’s leading business insolvency groups. Our highly skilled team includes top-ranked lawyers known for their expertise and creative problem-solving, allowing McMillan to deliver the highest standards of transactional and structuring leadership, and commercial advocacy. We have advised on the restructuring, purchase and sale of businesses in a variety of industries. We regularly work with financially challenged companies, boards of directors, Canadian and US financial institutions, lending syndicates, bondholders, investors, ad hoc and official creditors’ committees, court-appointed officers and major customers and suppliers of insolvent companies. We provide our clients with successful outcomes and comprehensive solutions to the most challenging problems.