Court File No. CV-13-10181-00CL SUPERIOR COURT OF JUSTICE (COMMERCIAL LIST)

Court File No. CV-13-10181-00CL
ONTARIO
SUPERIOR COURT OF JUSTICE
(COMMERCIAL LIST)
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 COMSTOCK CANADA LTD., CCL
EQUITIES INC., AND CCL REALTY INC.
MOTION RECORD
(Returnable October 15, 2013)
GOWLING LAFLEUR HENDERSON LLP
Barristers and Solicitors
1 First Canadian Place
100 King Street West, Suite 1600
TORONTO, Ontario
M5X 1G5
Alex MacFarlane / Frank Lamie
LSUC No.: 28133Q / 54035S
Telephone: (416) 369-4631 / (416) 862-3609
Facsimile: (416) 862-7661
Lawyers for Comstock Canada Ltd., CCL
Realty Inc., and CCL Equities Inc.
TO:
THE ATTACHED SERVICE LIST
SERVICE LIST
Court File No. CV-13-10181-00CL
ONTARIO
SUPERIOR COURT OF JUSTICE
(COMMERCIAL LIST)
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
COMSTOCK CANADA LTD., CCL EQUITIES INC., AND CCL REALTY INC.
TO:
GOWLING LAFLEUR HENDERSON LLP
1 First Canadian Place
Suite 1600, 100 King Street West
Toronto, Ontario, Canada, M5X 1G5
Attention: Alex MacFarlane
Tel: (416) 369-4631
Fax: (416) 862-7661
E-Mail: [email protected]
Attention: Frank Lamie
Tel: (416) 862-3609
Fax: (416) 862-7661
E-Mail: [email protected]
Solicitors for Comstock Canada Ltd, CCL Equities Inc., and CCL Realty Inc.
AND TO:
CHAITONS LLP
5000 Yonge Street, 10th Floor
Toronto, Ontario, Canada
M2N 7E9
Attention: Harvey Chaiton
Tel: (416) 218-1129
Fax: (416) 218-1849
Cell: (416) 918-0608
E-mail: [email protected]
Attention: George Benchetrit
Tel: (416) 218-1141
Fax: (416) 218-1841
E-mail: [email protected]
Solicitors for Bank of Montreal
TOR_LAW\ 8273628\1
AND TO:
DAVIES WARD PHILLIPS & VINEBERG LLP
155 Wellington Street West
Toronto, Ontario M5V 3J7
Attention: Robin B. Schwill
Tel: (416) 863-5502
Fax: (416) 863-0871
E-Mail: [email protected]
Attention: Natalie Renner
Tel: (416) 367-7489
Fax: (416) 863-0871
E-Mail: [email protected]
Attention: Jay A. Swartz
Tel: (416) 863.5520
Fax: (416) 863-0871
E-Mail: [email protected]
Attention: I. Berl Nadler
Tel: (416) 863-5512
Fax: (416) 863-0871
E-Mail: [email protected]
Solicitors for PricewaterhouseCoopers Inc. in its capacity as
Monitor of Comstock Canada Ltd., CCL Equities Inc. and CCL Realty Inc.
AND TO:
MCMILLAN LLP
Brookfield Place
181 Bay Street, Suite 4400
Toronto, Ontario
Canada M5J 2T3
Attention: Andrew J.F. Kent
Tel: (416) 865-7160
Fax: (647)722-6756
E-Mail: [email protected]
Attention: Brett Harrison
Tel: (416) 865-7932
Fax: (647)722-6715
E-Mail: [email protected]
Solicitors for the Board of Directors of Comstock Canada Ltd.,
CCL Equities Inc. and CCL Realty Inc.
TOR_LAW\ 8273628\1
AND TO:
MCMILLAN LLP
TD Canada Trust Tower,
421 7th Avenue S.W.
Suite 1700
Calgary, Alberta T2P 4K9
Attention: Adam C. Maerov
Tel: (403) 215-2752
Fax: (403) 531-4720
Email: [email protected]
Solicitors for The Williams Group
AND TO:
WHALER INDUSTRIAL CONTRACTING
Suite#111, 1100 - 8 Avenue SW
Calgary, Alberta T2P 3T9
Canada
Tel: (403) 294-9117
Fax: (403) 294-9137
Email: [email protected]
AND TO:
TROTTER & MORTON LIMITED
5711 - 1st Street S.E.
Calgary, Alberta T2H 1H9
Canada
Tel: (403) 255-7535
Fax: (403) 640-0767
Email: [email protected]
AND TO:
WES HILDEBRAND
c/o Comstock Canada Ltd.
3455 Landmark Road
Burlington, Ontario L7M 1T4
Tel: (905) 335-3333
Fax: (905) 335-0304
Email: [email protected]
TOR_LAW\ 8273628\1
INDEX
INDEX
1
Notice of Motion
A
Draft Order
2
Affidavit of Robert J. Kilmartin, sworn October 9, 2013
A
Exhibit “A”: Initial Order of Justice Morawetz dated July 9, 2013
B
Exhibit “B”: Reasons of Justice Morawetz dated July 16, 2013
C
Exhibit “C”: Amended & Restated Initial Order of Justice Morawetz dated July 26,
2013
D
Exhibit “D”: Endorsement of Justice Morawetz dated July 26, 2013
E
Exhibit “E”: Order (Stay Extension & SISP Approval) of Justice Morawetz dated
August 7, 2013
F
Exhibit “F”: Endorsement of Justice Morawetz dated August 7, 2013
G
Exhibit “G”: Order of Justice Newbould dated October 4, 2013
H
Exhibit “H”: Endorsement of Justice Newbould dated October 4, 2013
I
Exhibit “I”: Corporate Profile Report of TML Group
J
Exhibit “J”: TML Group’s Website which lists affiliated companies
K
Exhibit “K”: Corporate Profile Report of Whaler Industrial Contracting
L
Exhibit “L”: NDA dated August 15, 2013
M
Exhibit “M”: Mr. Hilderbrand’s Notice Letter to Comstock dated October 8, 2013
N
Exhibit “N”: Email exchange between Mr. Hilderbrand and Comstock dated October
8, 2013
TAB 1
Court File No. CV-13-10181-00CL
ONTARIO
SUPERIOR COURT OF JUSTICE
(COMMERCIAL LIST)
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 COMSTOCK CANADA LTD., CCL
EQUITIES INC., AND CCL REALTY INC.
Applicants
NOTICE OF MOTION
(Returnable October 15, 2013)
COMSTOCK CANADA LTD. (“Comstock”), CCL REALTY INC. (“CCL Realty”), and
CCL EQUITIES INC. (“CCL Equities”, and together with Comstock and CCL Realty, the “Comstock
Group”) will make a motion to the Honourable Mr. Justice Morawetz, the Presiding Judge of the
Commercial List on Tuesday, October 15, 2013 at 10:00 a.m., or as soon thereafter as the motion can be
heard, at the Courthouse located at 330 University Avenue, Toronto, Ontario, Canada.
PROPOSED METHOD OF HEARING: The motion is to be heard orally.
1.
THE MOTION IS FOR an Order substantially in the form of the draft Order attached hereto
as Schedule “A” (the “Restraining Order”), inter alia,
(a)
Abridging the time for service of the Notice of Motion and Motion Record, if
necessary, and declaring that this motion is properly returnable on Tuesday, October
15, 2013, and dispensing with further service thereof;
(b)
A permanent, mandatory, or interlocutory injunction restraining Trotter and Morton
Limited, or any of its affiliates, including Whaler industrial Contracting, from
employing Mr. Wes Hildebrand and that any employment agreement already entered
2
-2-
into between Mr. Wes Hildebrand and Trotter Morton Ltd., or any of its affiliates, is
void and of no force or effect;
2.
(c)
Comstock’s costs of this motion on a substantial indemnity basis; and
(d)
such further and other relief as this Court deems just and/or equitable.
THE GROUNDS FOR THE MOTION ARE:
(a)
Trotter and Morton Limited (“TML”), together with its group of affiliated companies
being Trotter & Morton Electrical, Trotter and Morton Mechanical, Trotter & Morton
Power Control and Integration, Whaler Industrial Contracting, Bluebird Contracting
Services, Bow River Paving, Trotter & Morton Facility Services, Rambler Fabrication,
and Trotter and Morton Precision Metal (collectively with TML, the “TML Group”),
is a multi-service commercial and industrial construction company;
(b)
Whaler Industrial Contracting (“Whaler”) is an affiliated company of TML and part of
the TML Group;
(c)
As part of the Comstock Group's Sale and Investor Solicitation Process (the “SISP”),
TML signed a Confidentiality Agreement on August 15, 2013 (the "NDA");
(d)
Section 10 of the NDA provides, in part, that the TML Group shall not solicit for hire
for employment, directly or indirectly, any officer or employee of Comstock and shall
not agree to employ any officer or employee so solicited;
(e)
In breach of the NDA and its obligations owing to Comstock, TML solicited the
employment of Mr. Wes Hildebrand with the intent of opening up an operation in
Winnipeg, Manitoba.
Currently, TML does not have any ongoing operations in
Winnipeg;
(f)
Mr. Hildebrand has been employed with Comstock for sixteen (16) years, being the
Winnipeg Office Manager. Mr. Hildebrand is the cornerstone of Comstock's Winnipeg
3
-3-
operations and the key person who represents Comstock vis-à-vis Comstock's
Winnipeg clients and personnel;
(g)
On October 8, 2013, Mr. Hildebrand provided Comstock with written notice of his
resignation from Comstock, to be effective two (2) weeks hence, being October 22,
2013;
(h)
On October 8, 2013, Mr. Hildebrand advised Comstock via telephone that Whaler had
directly solicited his employment and that he had accepted an offer of employment with
Whaler with a view, among other things, to initiating and carrying on the TML Group’s
operations in Winnipeg, Manitoba. During this telephone call, Mr. Hildebrand also
confirmed that neither the TML Group nor Whaler have operations in the province of
Manitoba;
(i)
TML has no current ongoing operations in Winnipeg, Manitoba;
(j)
As a result of TML’s engagement of Mr. Hildebrand, coupled with TML’s knowledge
obtained pursuant to its access under the SISP, TML has set the conditions to
wrongfully exploit Comstock’s business, including its employees, to its benefit and to
great detriment to Comstock and its creditors;
(k)
Comstock's Winnipeg operations represent a material component of the assets which
are currently the subject of sale negotiations with The Williams Companies, being the
only party to submit a proposal in connection with Comstock's Sale and Investor
Solicitation Process;
(l)
Mr. Hildebrand's departure jeopardizes Comstock's ability to successfully negotiate and
close a sale transaction with The Williams Companies as it poses a threat to Comstock's
ongoing operations in Winnipeg. Comstock personnel working in Winnipeg are a
tightly knit group. As a result, the TML Group’s employment of Mr. Hildebrand sets
the conditions for, and concomitant risk of, a possible mass exit from Comstock to the
TML Group;
4
-4-
(m)
To the extent that TML or Mr. Hildebrand, or both, solicit the employment of any other
employees of Comstock, this will serve to only increase the risk of Comstock's inability
to successfully negotiate and close a sale transaction with The Williams Companies and
will further eviscerate Comstock’s ongoing operations in Winnipeg, Manitoba;
(n)
If the sale transaction with The Williams Companies fails to close as a result of the
foregoing, Comstock’s ongoing operations in Winnipeg will cease, resulting in the
termination of eighty (80) employees, comprising seventy five (75) tradespersons and
five (5) staff, and the abandonment of work on ten (10) industrial projects currently in
process;
(o)
The TML Group’s actions threaten to imperil Comstock’s restructuring and the welfare
of The Williams Group’s anticipated Winnipeg operations going forward;
(p)
TML is in clear breach of a contractual covenant pursuant to the NDA, and there is a
strong prima facie case vis-à-vis TML and its conduct in respect of the foregoing;
(q)
The balance of convenience overwhelmingly favours Comstock as the harm to the
TML Group of restraining its employment of Mr. Hildebrand is greatly outweighed by
the harm to Comstock which will otherwise arise;
(r)
In the overall context of these CCAA proceedings, and given the current circumstances
where the finalization of a transaction in respect of Comstock (subject to Court
approval) is imminent, irreparable harm will result to Comstock, its stakeholders, and
The Williams Group if the TML Group is not compelled to abide by its agreement not
to solicit employees of Comstock or employ such solicited employees;
(s)
The relief sought is necessary and urgently required in order to maintain the status quo
and permit Comstock to pursue its restructuring;
(t)
the provisions of the CCAA and this Court's equitable and statutory jurisdiction
thereunder;
5
-5-
(u)
Rules 1.04, 2.03, 3.02, 16, 37 and 40 of the Ontario Rules of Civil Procedure, R.R.O.
1990, Reg. 194, as amended;
(v)
Section 101 of the Courts of Justice Act; and
(w)
such further and other grounds as set out in the Affidavit of Robert J. Kilmartin, sworn
October 9, 2013; and
(x)
3.
such further and other grounds as counsel may advise and this Court may permit.
THE FOLLOWING DOCUMENTARY EVIDENCE will be used at the hearing of the
Motion: x
(a)
the Affidavit of Robert J. Kilmartin, sworn October 9, 2013; and
(b)
Such further material as counsel may advise and this Court may permit.
Date: October 11, 2013
GOWLING LAFLEUR HENDERSON LLP
Barrister and Solicitors
Suite 1600, First Canadian Place
100 King Street West
Toronto, ON M5X 1G5
Alex MacFarlane / Frank Lamie
LSUC No.: 28133Q / 54035S
Tel: (416) 369-4631/ (416) 862-3609
Fax: (416) 862-7661
Lawyers for the Comstock Group, Comstock Canada
Ltd., CCL Realty Inc., and CCL Equities Inc.
TAB A
6
Court File No. CV-13-10181-00CL
ONTARIO
SUPERIOR COURT OF JUSTICE
(COMMERCIAL LIST)
THE HONOURABLE MR.
JUSTICE MORAWETZ
)
)
)
TUESDAY, THE 15th
DAY OF OCTOBER, 2013
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 COMSTOCK CANADA LTD., CCL
EQUITIES INC., AND CCL REALTY INC.
Applicants
ORDER
(Restraining the TML Group)
THIS MOTION, made by Comstock Canada Ltd. (“Comstock”), CCL Equities Inc.,
and CCL Realty Inc. (“CCL Realty”) (collectively, the "Comstock Group") pursuant to the
Companies' Creditors Arrangement Act, R.S.C. 1985, c. C-36, as amended (the "CCAA") was
heard this day at 330 University Avenue, Toronto, Ontario.
ON READING the Affidavit of Robert J. Milmartin, sworn October 9, 2013, and the
Exhibits thereto, and on hearing the submissions of counsel for the Comstock Group, counsel for
the Monitor, and counsel for those other parties listed on the Counsel Slip, no one appearing for
any other person on the Service List, although properly served as appears from the Affidavit of
Service of Fiorella Sasso, sworn October 10, 2013, filed,
7
SERVICE
1.
THIS COURT ORDERS that the time for service of the Notice of Motion and the
Motion Record is hereby abridged and validated so that this Motion is properly returnable today
and hereby dispenses with further service thereof.
RESTRAINT OF THE TML GROUP
2.
THIS COURT ORDERS AND DECLARES that Trotter and Morton Limited, and
any of its affiliates, including but not limited to Whaler Industrial Contracting, Trotter & Morton
Electrical, Trotter and Morton Mechanical, Trotter & Morton Power Control and Integration,
Bluebird Contracting Services, Bow River Paving, Trotter & Morton Facility Services, Rambler
Fabrication, and Trotter and Morton Precision Metal (collectively, the “TML Group”), be and
are hereby permanently restrained and enjoined from employing Mr. Wes Hildebrand and that
any employment agreement already entered into between Mr. Wes Hildebrand and any member
of the TML Group, is hereby void and of no force or effect.
TML GROUP PAYMENT OF COMSTOCK COSTS
3.
THIS COURT ORDERS that Trotter and Morton Limited shall forthwith pay to
Comstock its costs of this motion in the amount of $[AMOUNT].
____________________________________
Lawyers for the Applicants, Comstock Canada
Ltd., CCL Realty Inc., and CCL Equities Inc.
Facsimile: (416) 862-7661
Telephone: (416) 369-4631 / (416) 862-3609
Frank Lamie (LSUC No.: 54035S)
Alex MacFarlane (LSUC No.: 28133Q)
Barristers and Solicitors
1 First Canadian Place
100 King Street West, Suite 1600
TORONTO, Ontario, Canada
M5X 1G5
GOWLING LAFLEUR HENDERSON LLP
(Restraining the TML Group)
ORDER
ONTARIO
SUPERIOR COURT OF JUSTICE
(COMMERCIAL LIST)
AND IN THE MATTER OF A PLAN OF COMPROMISE OR ARRANGEMENT OF COMSTOCK CANADA LTD., CCL
EQUITIES INC., AND CCL REALTY INC.
IN THE MATTER OF THE COMPANIES' CREDITORS ARRANGEMENT ACT, R.S.C. 1985, c. C-36, AS AMENDED
Court File No. CV-13-10181-00CL
8
Lawyers for Comstock Canada Ltd.,
CCL Realty Inc., and CCL Equities Inc.
Telephone: (416) 369-4631 / (416) 862-3609
Facsimile: (416) 862-7661
(LSUC No.: 28133Q / 54035S)
Alex MacFarlane / Frank Lamie
GOWLING LAFLEUR HENDERSON LLP
Barristers and Solicitors
1 First Canadian Place
100 King Street West, Suite 1600
TORONTO, Ontario, M5X 1G5
(Returnable October 15, 2013)
NOTICE OF MOTION
(PROCEEDING COMMENCED AT TORONTO)
ONTARIO
SUPERIOR COURT OF JUSTICE
(COMMERCIAL LIST)
AND IN THE MATTER OF A PLAN OF COMPROMISE OR ARRANGEMENT OF COMSTOCK CANADA LTD.,
CCL EQUITIES INC., AND COMSTOCK REALTY INC.
IN THE MATTER OF THE COMPANIES' CREDITORS ARRANGEMENT ACT, R.S.C. 1985, c. C-36, AS AMENDED
Court File No. CV-13-10181-00CL
9
TAB 2
10
Court File No. CV-13-10181-00CL
ONTARIO
SUPERIOR COURT OF JUSTICE
(COMMERCIAL LIST)
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 COMSTOCK CANADA LTD., CCL
EQUITIES INC., AND CCL REALTY INC.
Applicants
AFFIDAVIT OF ROBERT J. KILMARTIN
(Sworn October 9, 2013)
I, ROBERT J. KILMARTIN, of the City of Burlington, in the Province of
Ontario, MAKE OATH AND SAY:
1.
I am the Vice President, Shared Services, of Comstock Canada Ltd. (“Comstock”), CCL
Realty Inc. (“CCL Realty”), and CCL Equities Inc. (“CCL Equities” and together with
Comstock and CCL Realty, the “Comstock Group”). As such, I have personal knowledge of
the matters to which I depose in this Affidavit, save and except where I refer to matters based on
information and belief, in which case I have stated the source of my information and, in all such
cases, I verily believe that information to be true. In preparing this Affidavit, I have consulted
with the members of the Comstock Group’s senior management team.
I.
PURPOSE
2.
I am swearing this Affidavit in support of a motion by Comstock for an Order, inter alia,
(a) abridging the time for service of the Notice of Motion and Motion Record, if necessary, and
declaring that this motion is properly returnable on Thursday, October 10, 2013, and dispensing
with further service thereof; and (b) declaring that Trotter and Morton Ltd., or any of its
affiliates, is restrained from employing Mr. Wes Hildebrand and that any employment agreement
11
-2-
already entered into between Mr. Wes Hilderbrand and Trotter and Morton Ltd., or any of its
affiliates, is void and of no force or effect; and (c) such further and other relief as this Court
deems just and/or equitable.
II.
BACKGROUND
A.
The Comstock Group
3.
Comstock is a privately-held corporation incorporated pursuant to Ontario’s Business
Corporations Act with its headquarters located in Burlington, Ontario, Canada and with a
western office located in Edmonton, Alberta. Comstock maintains additional regional facilities
in Winnipeg, Edmonton, and Kitimat British Columbia and is also active in Ontario and Fort
McMurray, Alberta.
4.
Established in 1904, Comstock is one of Canada’s largest multi-disciplined contractors,
currently contracting the services of over 1,000 unionized and non-unionized trades people and
80 salaried employees across Canada.
B.
Filing of Notices of Intention to Make a Proposal
5.
On June 27, 2013, Chrysler Canada locked out Comstock from the performance of its
contract at facilities in Ontario. In response to Chrysler Canada’s lockout, and as a result of
unsuccessful negotiations with a potential bridge financier, Comstock’s Board of Directors
determined that the Comstock Group, in the exercise of their business judgment, had no other
readily available options but to file Notices of Intention to Make a Proposal (the “NOIs”)
pursuant to s. 50.4(1) of the Bankruptcy and Insolvency Act, R.S.C. 1985, c. B-3 (the “BIA”) on
Friday, June 28, 2013 (the “NOI Proceedings) in order to preserve the status quo and prepare
for a restructuring under the Companies’ Creditors Arrangement Act, R.S.C., 1985, c. C-36 (the
“CCAA”).
C.
Continuance under CCAA and Granting of CCAA Initial Order
6.
On July 9, 2013, Justice Morawetz granted the Initial Order, inter alia,
12
-3-
(a)
continuing the Comstock Group’s restructuring proceedings under the CCAA,
effective as at July 9, 2013;
(b)
extending the stay of proceedings to August 8, 2013;
(c)
appointing PwC as Monitor of the Comstock Group; and
(d)
approving the DIP Loan Commitment Letter made between Comstock and the
Bank of Montreal (or DIP Lender) and the granting of a DIP Lender’s Charge (as
defined in the Initial Order).
Copies of the Initial Order and the corresponding Reasons dated July 16, 2013, are attached
hereto as Exhibits “A” and “B”.
D.
Issuance of Amended & Restated Initial Order
7.
On July 26, 2013, Justice Morawetz issued an Amended & Restated Initial Order, which
specifically provided, inter alia,
(a)
for the stay and suspension of all rights and remedies of any individual, firm,
corporation, governmental body or agency, or any other entities against or in
respect of the Comstock Group, or affecting the Business or Property except with
written consent of the Comstock Group, the Monitor, or leave of the Court; and
(b)
that no Person shall discontinue, fail to honour, alter, interfere with, repudiate,
terminate or cease to perform any right, renewal right, contract, agreement,
licence or permit in favour of or held by the Comstock Group except with written
consent of the Comstock Group, the Monitor, or leave of the Court.
Copies of the Amended & Restated Initial Order and the corresponding Endorsement are
attached hereto as Exhibits “C” and “D”.
13
-4-
E.
Approval of Sale and Investor Solicitation Process & Extension of Stay Period
8.
On August 7, 2013, Justice Morawetz issued an Order (the “Stay Extension & SISP
Approval Order”), inter alia,
(a)
approving the Sale and Investor Solicitation Process (the “SISP”) wherein the
Monitor, in consultation with Comstock, is authorized to seek to (i) market the
assets, property, and business of the Comstock Group for sale, and/or (ii) attract
new investors for the Comstock Group; and
(b)
granting an extension of the stay of proceedings in respect of the Comstock Group
to and including December 17, 2013.
In support of the Comstock Group’s motion seeking the SISP and stay extension, the Monitor
filed the Third Report to Court dated August 6, 2013. Copies of the Stay Extension & SISP
Approval Order, together with the corresponding Endorsement, are attached hereto as Exhibits
“E” and “F”.
F.
Enhancement of Monitor’s Powers
9.
On October 4, 2013, Justice Newbould issued an Order, inter alia, (a) granting the
Monitor certain further powers in the CCAA proceedings, and (b) approving the Amended Cost
Reimbursement Agreement made between Comstock and Rio Tinto Alcan Inc. dated October 3,
2013. A copy of the Order of Justice Newbould dated October 4, 2013, together with the
corresponding Endorsement, is attached hereto as Exhibits “G” and “H”.
III.
TROTTER MORTON
A.
Trotter and Morton Ltd. & Affiliated Company Whaler Industrial
10.
Trotter and Morton Ltd. (“TML”), together with its group of affiliated companies being
Trotter & Morton Electrical, Trotter and Morton Mechanical, Trotter & Morton Power Control
and Integration, Whaler Industrial Contracting, Bluebird Contracting Services, Bow River
Paving, Trotter & Morton Facility Services, Rambler Fabrication, and Trotter and Morton
14
-5-
Precision Metal (collectively with TML, the “TML Group”), is a multi-service commercial and
industrial construction company. A copy of a Corporate Profile Report in respect of TML is
attached hereto as Exhibit “I”. A copy of the TML Group’s Website which lists its affiliated
companies is attached hereto as Exhibit “J”.
11.
As noted above, Whaler Industrial Contracting (“Whaler”) is an affiliated company of
TML and part of the TML Group. A copy of a Corporate profile Report in respect of Whaler
Industrial Contracting is attached hereto as Exhibit “K”.
B.
TML & Whaler Breach of Non-Disclosure Agreement
12.
As part of the Comstock Group's SISP, TML signed a confidentiality agreement on
August 15, 2013 (the "NDA") which granted TML access to all the information in relation to
Comstock’s business pursuant to the SISP. A copy of the NDA executed by TML is attached
hereto as Exhibit “L”.
13.
As a result of TML’s access to the information available to prospective purchasers
conducting due diligence pursuant to the SISP, TML now has obtained knowledge of
Comstock’s client base and business operations.
14.
Section 10 of the NDA provides, in part, that TML and the TML Group shall not solicit
for hire for employment, directly or indirectly, any officer or employee of Comstock and shall
not agree to employ any officer or employee so solicited.
15.
In breach of the NDA and its obligations owing to Comstock, TML solicited the
employment of Mr. Wes Hilderbrand with the intent of opening up an operation in Winnipeg,
Manitoba. Currently, TML does not have any ongoing operations in Winnipeg.
16.
Mr. Hilderbrand has been employed with Comstock for sixteen (16) years, being the
Winnipeg Office Manager. Mr. Hildebrand is the cornerstone of Comstock's Winnipeg
operations and the key person who represents Comstock vis-à-vis Comstock's Winnipeg clients
and personnel.
15
-6-
17.
On October 8, 2013, Mr. Hilderbrand provided Comstock with written notice of his
resignation from Comstock, to be effective two (2) weeks hence, being October 22, 2013. A
copy of Mr. Hilderbrand’s Letter to Comstock dated October 8, 2013, is attached hereto as
Exhibit “M”.
18.
On October 8, 2013, Mr. Hilderbrand advised me via telephone that Whaler had directly
solicited his employment and that he had accepted an offer of employment with Whaler with a
view, among other things, to initiating and carrying on the TML Group’s operations in
Winnipeg, Manitoba. During this telephone call, Mr. Hilderbrand also confirmed that neither the
TML Group nor Whaler have operations in the province of Manitoba.
19.
During our call on October 8, 2013, I asked Mr. Hilderbrand if he was moving to
Calgary, Alberta (where the TML Group and Whaler are based). In response, Mr. Hildebrand
replied: “No, they want me to start something here” - in Winnipeg, Manitoba.
20.
On October 8, 2013, Mr. Hilderbrand and Comstock’s former CEO, Geoffrey Birkbeck,
corresponded via email. In the email exchange, Mr. Hilderbrand states as follows:
“I can honestly say that the group in Winnipeg is a strong group who can
move forward with the operations as planned. This was not an easy
decision for me to make. With that being said, I was presented with an
opportunity I could not pass up given the circumstances.”
A copy of the email exchange dated October 8, 2013, is attached hereto as Exhibit “N”.
C.
Effect of Breach of the NDA on Comstock’s Restructuring
21.
As a result of TML’s engagement of Mr. Hildebrand, coupled with TML’s knowledge
obtained pursuant to its access under the SISP, TML has set the conditions to wrongfully exploit
Comstock’s business, including its employees, to its benefit and to great detriment to Comstock
and its creditors.
16
-7-
22.
Comstock's Winnipeg operations represent a material component of the assets which are
currently the subject of sale negotiations with The Williams Companies, being the only party to
submit a proposal in connection with Comstock's Sale and Investor Solicitation Process.
23.
Mr. Hilderbrand's departure jeopardizes Comstock's ability to successfully negotiate and
close a sale transaction with The Williams Companies as it poses a threat to Comstock's ongoing
operations in Winnipeg. Comstock personnel working in Winnipeg are a tightly knit group. As
a result, the TML Group’s employment of Mr. Hildebrand sets the conditions for, and
concomitant risk of, a possible mass exit from Comstock to the TML Group.
24.
To the extent that TML or Mr. Hilderbrand, or both, solicit the employment of any other
employees of Comstock, this will serve to only increase the risk of Comstock's inability to
successfully negotiate and close a sale transaction with The Williams Companies and will further
eviscerate Comstock’s ongoing operations in Winnipeg, Manitoba.
25.
If the sale transaction with The Williams Companies fails to close as a result of the
foregoing, Comstock’s ongoing operations in Winnipeg will cease, resulting in the termination of
eighty (80) employees, comprising seventy five (75) tradespersons and five (5) staff, and the
abandonment of work on ten (10) industrial projects currently in process.
26.
The TML Group’s actions threaten to imperil Comstock’s restructuring and the welfare
of The Williams Group’s anticipated Winnipeg operations going forward.
27.
If the TML Group is not compelled to comply with the terms of the NDA, this would
result in a continued and further disruption to Comstock’s business and the SISP. Comstock’s
ability to continue with its restructuring as planned and to finalize a sale with The Williams
Group would be imperiled. Accordingly, it is imperative that the TML Group be enjoined from
employing Mr. Hilderbrand in order to allow Comstock to proceed with its restructuring as
approved by this Court and the sale of a significant portion of its assets to The Williams Group.
28.
The balance of convenience overwhelmingly favours Comstock as the harm to the TML
Group of restraining its employment of Mr. Hilderbrand is greatly outweighed by the harm to
Comstock which will otherwise arise.
17
-8-
29.
In the overall context of these CCAA proceedings, and given the current circumstances
where the finalization of a transaction in respect of Comstock (subject to Court approval) is
imminent, irreparable harm will result to Comstock, its stakeholders, and The Williams Group if
the TML Group is not compelled to abide by its agreement not to solicit employees of Comstock
or employ such solicited employees.
30.
The balance of prejudice militates in favour of enjoining Whaler and the TML Group
from employing, contracting with, and / or otherwise engaging Mr. Hilderbrand.
31.
The Monitor has indicated that it supports the relief sought by the Comstock Group.
32.
I believe that the magnitude of prejudice which will be suffered by Comstock, its
stakeholders, and to Comstock’s restructuring far outweighs any potential prejudice to Whaler,
the TML Group, and Mr. Hilderbrand. Accordingly, the balance of prejudice militates in favour
of the relief sought by Comstock.
33.
The relief sought is necessary and urgently required in order to maintain the status quo
and permit Comstock to pursue its contemplated sale transaction with The Williams Group.
IV.
CONCLUSION & RELIEF SOUGHT
34.
Absent TML being compelled to comply with the terms of the NDA, this would result in
a continued and further disruption to Comstock’s business and the SISP. Comstock’s ability to
continue with its restructuring as planned and to finalize a sale with The Williams Group would
be imperiled. Accordingly, it is imperative that the TML Group be enjoined from employing Mr.
Hilderbrand.
35.
For the reasons set out above, I believe that it is just and equitable and in the interests of
the Comstock Group and its stakeholders that the Order sought be granted.
36.
I am swearing this affidavit in support of a motion by the Comstock Group for an Order,
inter alia, (a) abridging the time for service of the Notice of Motion and Motion Record, if
necessary, and declaring that this motion is properly returnable on Thursday, October 10, 2013,
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
53
54
55
56
57
58
59
60
61
62
63
64
65
66
67
68
69
70
71
72
73
74
75
76
77
78
79
80
81
82
83
84
85
86
87
88
89
90
91
92
93
94
95
96
97
98
99
100
101
102
103
104
105
106
107
108
109
110
111
Corporation/Non-Profit Search
Corporate Registration System
Date of Search:
Time of Search:
Search provided by:
2013/10/09
12:10 PM
GOWLING LAFLEUR HENDERSON LLP
Service Request Number:
20388059
Customer Reference Number: T998163/H. CHANCEY
Corporate Access Number: 200073864
Legal Entity Name:
TROTTER AND MORTON LIMITED
Legal Entity Status:
Active
Alberta Corporation Type: Named Alberta Corporation
Registration Date:
1927/08/05 YYYY/MM/DD
Registered Office:
Street:
5711 1 STREET S.E.
City:
CALGARY
Province:
ALBERTA
Postal Code:
T2H 1H9
Records Address:
Street:
5711 1 STREET S.E.
City:
CALGARY
Province:
ALBERTA
Postal Code:
T2H 1H9
Directors:
Last Name:
RYAN
First Name:
J
Middle Name:
PAUL
Street/Box Number: 5711 - 1 STREET SE
City:
CALGARY
Province:
ALBERTA
4
f
o
1
e
g
a
P
3
1
0
2
/
0
1
/
9
0
112
Postal Code:
T2H 1H9
Last Name:
RYAN
First Name:
JANE
Street/Box Number: 5711 - 1ST STREET S.E.
City:
CALGARY
Province:
ALBERTA
Postal Code:
T2H 1H9
Last Name:
RYAN
First Name:
DAVID
Street/Box Number: 5711 - 1ST STREET S.E.
City:
CALGARY
Province:
ALBERTA
Postal Code:
T2H 1H9
Last Name:
WATSON
First Name:
MICHAEL
Street/Box Number: 5711 1 STREET S.E.
City:
CALGARY
Province:
ALBERTA
Postal Code:
T2H 1H9
Voting Shareholders:
Legal Entity Name:
STEELHEAD INVESTMENTS INC.
Corporate Access Number: 208354001
Street:
5711 - 1 STREET SE
City:
CALGARY
Province:
ALBERTA
Postal Code:
T2H 1H9
Percent Of Voting Shares: 100
Details From Current Articles:
The information in this legal entity table supersedes equivalent electronic attachments
Share Structure: SEE SHARE CAPITAL ELECTRONIC ATTACHMENT.
NO SHARES IN THE CAPITAL OF THE CORPORATION SHALL BE
Share Transfers TRANSFERRED WITHOUT THE EXPRESS CONSENT OF A MAJORITY
Restrictions:
OF THE DIRECTORS TO BE SIGNIFIED BY A RESOLUTION OF THE
BOARD OF DIRECTORS.
4
f
o
2
e
g
a
P
3
1
0
2
/
0
1
/
9
0
113
Min Number Of
Directors:
Max Number Of
Directors:
Business
Restricted To:
Business
Restricted From:
Other
Provisions:
1
7
NONE.
NONE.
AS SET OUT IN PARAGRAPH 9 OF THE RESTATED ARTICLES OF
INCORPORATION.
Holding Shares In:
Legal Entity Name
HUTCHISON ELECTRICAL LTD.
TROTTER & MORTON PRECISION METAL INC.
TROTTER AND MORTON BUILDING TECHNOLOGIES INC.
TROTTER & MORTON CONSTRUCTORS LTD.
RAMBLER FABRICATION INC.
BLUEBIRD CONTRACTING SERVICES LTD.
WHALER INDUSTRIAL CONTRACTING INC.
BOW RIVER ROADWORK CONTRACTING LTD.
TROTTER & MORTON POWER CONTROL INTEGRATION LTD.
Associated Registrations under the Partnership Act:
Trade Partner Name
Registration Number
PAN WEST CANADA CONSTRUCTORS TN9090531
Other Information:
Last Annual Return Filed:
File Year Date Filed (YYYY/MM/DD)
2013 2013/07/26
Continued Under the Business Corporations Act on: 1983/10/21 YYYY/MM/DD
Filing History:
4
f
o
3
e
g
a
P
3
1
0
2
/
0
1
/
9
0
114
List Date (YYYY/MM/DD)
2006/12/11
2013/06/10
2013/07/26
Type of Filing
Name/Structure Change Alberta Corporation
Change Director / Shareholder
Enter Annual Returns for Alberta and Extra-Provincial Corp.
Attachments:
Attachment Type
Share Structure
Other Rules or Provisions
Share Structure
Share Structure
Microfilm Bar Code
ELECTRONIC
ELECTRONIC
ELECTRONIC
ELECTRONIC
Date Recorded (YYYY/MM/DD)
2002/08/08
2002/08/08
2002/12/23
2006/12/11
This is to certify that, as of this date, the above information is an accurate reproduction of
data contained within the official records of the Corporate Registry.
4
f
o
4
e
g
a
P
3
1
0
2
/
0
1
/
9
0
115
116
117
118
Corporation/Non-Profit Search
Corporate Registration System
Date of Search:
Time of Search:
Search provided by:
2013/10/09
11:55 AM
GOWLING LAFLEUR HENDERSON LLP
Service Request Number:
20387883
Customer Reference Number: T998163/H. CHANCEY
Corporate Access Number: 2012740904
Legal Entity Name:
WHALER INDUSTRIAL CONTRACTING INC.
Legal Entity Status:
Active
Alberta Corporation Type: Named Alberta Corporation
Registration Date:
2006/10/11 YYYY/MM/DD
Registered Office:
Street:
850, 1015 - 4 STREET SW
City:
CALGARY
Province:
ALBERTA
Postal Code:
T2R 1J4
Directors:
Last Name:
RYAN
First Name:
MICHAEL
Street/Box Number: 3624 - 7A STREET SW
City:
CALGARY
Province:
ALBERTA
Postal Code:
T2T 2Y5
Last Name:
WATSON
First Name:
MICHAEL
Street/Box Number: 5711 - 1 STREET SE
City:
CALGARY
Province:
ALBERTA
3
f
o
1
e
g
a
P
3
1
0
2
/
0
1
/
9
0
119
Postal Code:
T2H 1H9
Last Name:
WRIGHTSON
First Name:
MARK
Street/Box Number: 77 HILLCREST ESTATES
City:
CALGARY
Province:
ALBERTA
Postal Code:
T3Z 2B9
Voting Shareholders:
Legal Entity Name:
TROTTER AND MORTON LTD.
Corporate Access Number: 200073864
Street:
5711 1 STREET SE
City:
CALGARY
Province:
ALBERTA
Postal Code:
T2H 1H9
Percent Of Voting Shares: 100
Details From Current Articles:
The information in this legal entity table supersedes equivalent electronic attachments
Share Structure:
Share Transfers
Restrictions:
Min Number Of
Directors:
Max Number Of
Directors:
Business
Restricted To:
Business
Restricted From:
Other Provisions:
SEE ATTACHED SCHEDULE A
THE TRANSFER OF THE SHARES IS RESTRICTED; NO SHARES OF
THE CORPORATION MAY BE TRANSFERRED WIHOUT THE
APPROVAL OF THE BOARD OF DIRECTORS
1
7
NONE
NONE
SEE ATTACHED SCHEDULE B
Other Information:
Last Annual Return Filed:
3
f
o
2
e
g
a
P
3
1
0
2
/
0
1
/
9
0
120
File Year Date Filed (YYYY/MM/DD)
2012 2012/10/03
Filing History:
List Date (YYYY/MM/DD)
2006/10/11
2006/12/13
2008/03/11
2012/10/03
2012/10/03
Type of Filing
Incorporate Alberta Corporation
Capture Microfilm/Electronic Attachments
Change Director / Shareholder
Change Address
Enter Annual Returns for Alberta and Extra-Provincial Corp.
Attachments:
Attachment Type
Share Structure
Other Rules or Provisions
Statutory Declaration
Microfilm Bar Code
ELECTRONIC
ELECTRONIC
10000902000448928
Date Recorded (YYYY/MM/DD)
2006/10/11
2006/10/11
2006/12/13
This is to certify that, as of this date, the above information is an accurate reproduction of
data contained within the official records of the Corporate Registry.
3
f
o
3
e
g
a
P
3
1
0
2
/
0
1
/
9
0
121
122
123
124
125
126
127
128
129
130
131
132
133
134
135
Lawyers for Comstock Canada Ltd.,
CCL Realty Inc., and CCL Equities Inc.
Telephone: (416) 369-4631 / (416) 862-3609
Facsimile: (416) 862-7661
Alex MacFarlane / Frank Lamie
LSUC No.: 28133Q / 54035S
Barristers and Solicitors
1 First Canadian Place
100 King Street West, Suite 1600
TORONTO, Ontario, M5X 1G5
GOWLING LAFLEUR HENDERSON LLP
AFFIDAVIT OF ROBERT J. KILMARTIN
(Sworn October 9, 2013)
(PROCEEDING COMMENCED AT TORONTO)
ONTARIO
SUPERIOR COURT OF JUSTICE
(COMMERCIAL LIST)
AND IN THE MATTER OF A PLAN OF COMPROMISE OR ARRANGEMENT OF COMSTOCK CANADA LTD., CCL EQUITIES
INC., AND CCL REALTY INC.
IN THE MATTER OF THE COMPANIES' CREDITORS ARRANGEMENT ACT, R.S.C. 1985, c. C-36, AS AMENDED
Court File No. CV-13-10181-00CL
136
Lawyers for Comstock Canada Ltd.,
CCL Realty Inc., and CCL Equities Inc.
Telephone: (416) 369-4631 / (416) 862-3609
Facsimile: (416) 862-7661
Alex MacFarlane / Frank Lamie
(LSUC No.: 28133Q / 54035S)
Barristers and Solicitors
1 First Canadian Place
100 King Street West, Suite 1600
TORONTO, Ontario, M5X 1G5
GOWLING LAFLEUR HENDERSON LLP
(Returnable October 15, 2013)
MOTION RECORD
(PROCEEDING COMMENCED AT TORONTO)
ONTARIO
SUPERIOR COURT OF JUSTICE
(COMMERCIAL LIST)
AND IN THE MATTER OF A PLAN OF COMPROMISE OR ARRANGEMENT OF COMSTOCK CANADA LTD., CCL
EQUITIES INC., AND CCL REALTY INC.
IN THE MATTER OF THE COMPANIES' CREDITORS ARRANGEMENT ACT, R.S.C. 1985, c. C-36, AS AMENDED
Court File No. CV-13-10181-00CL