The CCAA and Chapter 11: Oversight of Insolvency Professionals
The proceedings concerning the SID companies were conducted under the Companies' Creditors Arrangement Act. This page sets out, from public sources, how oversight of insolvency professionals under that statute differs from Chapter 11 of the United States Bankruptcy Code, and how those features operated in this case.
Oversight: Canada and the United States
| Subject | CCAA (Canada) | Chapter 11 (United States) |
|---|---|---|
| Independent government watchdog | "The CCAA does not have a direct equivalent to the U.S. Trustee." The Superintendent of Bankruptcy licenses the trustees who act as monitors, keeps a public record, records complaints and may investigate a monitor's conduct. | The U.S. Trustee, a division of the Department of Justice, acts as the "watchdog" of the bankruptcy system. |
| Review of professional fees | Fees are approved by the supervising court. Sections 26 to 31 of the Act give the Superintendent no role in reviewing or approving them. | The U.S. Trustee reviews professionals' applications to be retained and paid, and may object to them. |
| Official committee of unsecured creditors | "The CCAA does not provide for unsecured creditors' committees, although they have been formed on an ad hoc basis." | "The Bankruptcy Code permits the creation of an official committee of unsecured creditors", whose costs are paid by the estate. |
| Security for professional costs | A court-ordered priority charge on the debtor's property secures payment of the professionals, ranking ahead of unsecured creditors. | Professional fees are administrative claims; a carve-out from the DIP lender's lien is usually negotiated. |
| Financial reporting | The Monitor reports periodically to the court and stakeholders. | The U.S. Trustee requires the debtor to report its monthly income and operating expenses. |
| Disclosure of a professional's connections | Without the court's permission, a firm may not be appointed monitor if within the previous two years it was a director, officer or employee of the company, or its auditor, accountant or legal counsel. The Act requires no sworn statement of other connections. | Every professional to be retained must file a verified statement of "all the person's connections with" the debtor, the creditors, any other party in interest and their attorneys and accountants. |
| Detail required to support fees in larger cases | Fee affidavits attaching invoices, approved by the court. | In cases with "$50 million or more in assets and $50 million or more in liabilities", attorneys are asked to file budgets, staffing plans and disclosures of customary and comparable rates with their fee applications. |
| Who chooses the creditors' counsel | A court may appoint representative counsel paid by the debtor. In this proceeding the lenders' representative counsel was appointed at the first hearing, before the lenders had chosen counsel of their own, and counsel for the unsecured lenders was first proposed on March 28, 2024, two months after the filing. | An official committee, where one is appointed, selects its own counsel and advisors, whose fees are paid by the estate. |
Sources: Blake, Cassels & Graydon LLP, Chapter 11 and CCAA: A Cross-Border Comparison (May 2026); Companies' Creditors Arrangement Act, ss. 25 to 31; Companies' Creditors Arrangement Act, s. 11.7; U.S. Department of Justice, The U.S. Trustee's Role in Chapter 11 Bankruptcy Cases; Federal Rule of Bankruptcy Procedure 2014; U.S. Department of Justice, U.S. Trustee Program, Fee Guidelines; Endorsement of Justice Kimmel (Feb 2, 2024), para 6(a); Endorsement of Justice Kimmel (Mar 28, 2024)
A small number of firms
A law firm's published count records 71 CCAA filings in Canada in 2025, 23 of them in Ontario. Nine firms acted as monitor in 57 of the 71. KSV was the most active, with 9. Among law firms acting for monitors, Cassels Brock & Blackwell LLP was tied for second with 5 mandates, and Bennett Jones LLP had 5 mandates as monitor's counsel and 4 as counsel to the applicant.
The count is the firm's own and it does not warrant its accuracy.
A Canadian restructuring lawyer writing in 2010 observed that only about ten firms act as monitor in material restructurings, that the restructuring bar is small, and that a firm may act for the monitor in one case and for a creditor in the next, an arrangement the author says would not be accepted in Chapter 11. The article describes the monitor as "an officer of the court with a duty to be neutral" and reports a concern among American clients that the monitor is "not a font but, rather, a filter of information".
What a Senate committee recommended in 2003
The Standing Senate Committee on Banking, Trade and Commerce recommended that "a trustee/monitor should disclose, to the Court, any business and legal relationships it has or has had with the debtor", that "the auditor or recent former auditor of the debtor should not be permitted to be the monitor", and that the government "adopt guidelines for insolvency practitioners regarding professional conduct and conflicts of interest". Section 11.7 of the Act, in its current form since 2009, bars a recent auditor from acting as monitor without the court's permission.
In October 2026 the federal government published a proposed regulation that "would prescribe a $25,000 levy payable by the monitor to the OSB at the time of the filing of the initial application", to help fund "a more proactive role for the OSB" in CCAA proceedings. The proposal states: "The amount paid would be coming out of the amounts of money available in the estate."
How a court is to assess a court officer's fees
In 2014 the Court of Appeal for Ontario, in a receivership case, set out how the fees of a court officer and its counsel are to be assessed. The officer "bears the burden of proving that its fees are fair and reasonable". The court wrote: "In a court-supervised insolvency, stakeholders with little or no influence on the fees may ultimately bear the burden of the largesse of legal expenditures." It held that "value provided should pre-dominate over the mathematical calculation reflected in the hours times hourly rate equation", and that "The focus of the fair and reasonable assessment should be on what was accomplished, not on how much time it took."
The same decision observed: "In Canada, very little has been written on professional fees in insolvency proceedings".
What the U.S. Trustee's guidelines provide
The guidelines for larger Chapter 11 cases state their purpose: "To increase disclosure and transparency in the billing practices of professionals seeking compensation from the estate." They provide that "The United States Trustee will ordinarily object to fees that are above the market rate for comparable services", that it "ordinarily will seek the use of fee and expense budgets and staffing plans", and that in larger cases it "ordinarily will seek the court's appointment of a special fee review entity", which may be "a single person to serve as an Independent Fee Examiner for the case".
The sequence in this proceeding
The Monitor's affiliate "was engaged by the Applicants and has been working with the Applicants' management team, financial advisor and legal counsel since that time to assist them to prepare for this filing". Pre-Filing Report of the Proposed Monitor (Jan 2024)
Its related firm, KSV Restructuring Inc., is appointed Monitor. The lenders' representative counsel is appointed at the same hearing, before the lenders have chosen counsel of their own. Endorsement of Justice Kimmel (Feb 2, 2024), para 6(a)
The Monitor is given "investigatory powers regarding the use of lender advances prior to these proceedings", "requested by the Secured Lenders and supported by all other parties". The companies' sworn evidence is that they consented "in a good-faith effort to address the concerns raised by the Objecting Lenders with the impression that their value-accretive renovation efforts could proceed as intended under the Monitor's oversight", and that they "were subsequently advised that the Secured Lenders would not support the retention of estate funded, independent counsel" for the individuals "in respect of the Investigation". Under the same order, every payment by the companies required "the prior written consent of the Monitor". Endorsement of Justice Kimmel (Feb 15, 2024), para 10; Motion Record of the Applicants (Jun 20, 2024), including the affidavit of Robert Clark, Clark affidavit paras 18(d)(i) and 24(a)
The Monitor reports that "the Applicants are acting in good faith and with due diligence". Third Report of the Monitor (Apr 2024), s.7.0 para 2(a)
The Monitor reports "a pattern of unjustifiable defalcation", in a report it states it "has not audited, or otherwise attempted to verify". Two weeks later it holds the powers of the board. Fourth Report of the Monitor, redacted (Jun 11, 2024), s.2.1 para 2 and s.3.0 para 3; Endorsement of Justice Osborne (Jun 25, 2024), paras 2 to 4
$10.09 million of professional fees is paid from the Monitor's account. $0.75 million had been provided for renovations by June 2024. The Monitor estimates about $800,000 for unsecured creditors. Fifteenth Report of the Monitor (Jul 21, 2026), s.9.0 and Appendix F, note 8; Motion Record of the Applicants (Jun 20, 2024), including the affidavit of Robert Clark, Clark affidavit para 33
This page draws no conclusion from that sequence. It is set out so that a reader can compare it with the two columns of the table above.
How those features operated in this case
KSV delivered a report to the court as proposed Monitor at the outset of the proceeding and was then appointed Monitor.
In February 2024 the Monitor was empowered to investigate the companies. In June 2024 its powers were expanded so that it would "effectively have the powers which may be properly exercised by a Board of Directors or the officers of the Applicants".
Thereafter the Monitor controlled the companies' bank accounts, carried out the sale process, arranged the transfer of property management to a replacement manager, and negotiated the terms of the replacement DIP loan.
The fees of the Monitor and its counsel were approved by the court on the basis of fee affidavits sworn by a representative of the Monitor and a member of its counsel's firm. On December 6, 2024 the motion that included the fee approval "was unopposed". The professionals' costs were secured by an Administration Charge on the companies' property of $750,000, later $1.5 million.
The Monitor's cash table shows $10.09 million of professional fees and $1.99 million of DIP lender interest and fees paid to July 2, 2026, and a projected $800,000 for creditors outside the proceeds of mortgaged properties.
Cost of the CCAA · Numbers that have not been reported
The professional firms in this proceeding
| Role | Firm |
|---|---|
| Monitor | KSV Restructuring Inc. (acquired by AlixPartners in 2026) |
| Counsel to the Monitor | Cassels Brock & Blackwell LLP |
| Counsel to the companies | Bennett Jones LLP |
| Representative counsel, secured lenders | Chaitons LLP |
| Representative counsel, unsecured lenders | Goldman Sloan Nash & Haber LLP |
| First DIP lender and its counsel | Harbour Mortgage Corp.; Torkin Manes LLP |
| Replacement DIP lender | Viscount |
| Sale process advisors | Howards Capital Corp. and CBRE |
| Replacement property manager | Richmond Advisory Services Inc. |
| Receiver of The Lion's Share Group and its counsel | The Fuller Landau Group Inc.; Norton Rose Fulbright Canada LLP |
| Representative counsel, Lion's Share noteholders | Aird & Berlis LLP |
Compiled from the endorsements, the service list and the Monitor's reports. The Monitor's $10.09 million fee line covers the Monitor, its counsel, the companies' counsel, the DIP lenders' counsel, both representative counsel and the sale process advisors. Eleventh Report of the Monitor (Feb 20, 2025), s.7
KSV describes itself as "regularly appointed as Court Officers under Canadian restructuring legislation". Its acquisition by AlixPartners was completed on June 1, 2026. Terms were not disclosed.
Public criticism of the cost and transparency of the CCAA
The cost of large Canadian insolvencies has drawn public criticism before. Coverage of the Nortel Networks insolvency ran under headlines such as "Billion-dollar Nortel tab boosts pressure over runaway legal costs" and "Nortel workers decry fees paid to lawyers". Those proceedings are unrelated to this one.
In November 2022 the Auditor General of Ontario reported on a university's use of the CCAA. The report describes the statute as "a legal process designed for private sector entities", states that the university paid "more than $30 million and counting" to external legal and financial advisors, and says the process allowed it to operate with "even less transparency". That proceeding is unrelated to this one.
- A monitor is an officer of the court. The Act requires a monitor to act honestly and in good faith. Companies' Creditors Arrangement Act, ss. 25 to 31
- On December 6, 2024 the court stated that the Monitor "has been acting, and continues to act, in good faith and with due diligence", that its work was "accretive to the outcome for stakeholders", and that its fees were "fair and reasonable and consistent with market rates". Endorsement of Justice Osborne (Dec 6, 2024), paras 37 and 40
- The Monitor was appointed on the companies' own application, which its affiliate had helped prepare, and the June 2024 order expanding its powers was made on consent. Pre-Filing Report of the Proposed Monitor (Jan 2024); Endorsement of Justice Osborne (Jun 25, 2024), paras 2 to 4