



COURT OF APPEAL FOR ONTARIO

CITATION: Nortel Networks Corporation (Re), 2017 ONCA 210

DATE: 20170313

DOCKET: M47511

Hoy A.C.J.O., Pepall and Brown JJ.A.

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 Nortel Networks Corporation, Nortel
    Networks Limited, Nortel Networks Global Corporation, Nortel Networks
    International Corporation, Nortel Networks Technology Corporation, Nortel Communications
    Inc., Architel Systems Corporation and Northern Telecom Canada Limited

Application under the
Companies' Creditors
    Arrangement Act
, R.S.C. 1985, c. C-36, as amended

Jennifer Holley and Joseph Greg McAvoy, the moving
    parties, acting in person

Benjamin Zarnett, Jessica A. Kimmel and Peter B. Kolla, for
    the responding party, the Monitor, Ernst & Young Inc.

Derrick C. A. Tay and Jennifer Stam, for the responding
    parties, the Canadian Debtors

Mark Zigler, Susan L. Philpott and Barbara A. Walancik, for
    the responding parties, the Canadian Former Employees and Disabled Employees
    through their court appointed Representatives

Janice B. Payne and Thomas J. McRae, for the responding
    party, the Nortel Canadian Continuing Employees

Paul Mitchell, for the responding party, the EMEA
    Debtors (other than Nortel Networks S.A.)

Sheila R. Block, Scott A. Bomhof, Andrew D. Gray, Adam
    M. Slavens and Jeremy R. Opolsky, for the responding parties, Nortel Networks
    Inc. and the other U.S. Debtors

R. Shayne Kukulowicz, Michael J. Wunder, Ryan C. Jacobs
    and Geoff B. Shaw, for the responding party, the Official Committee of
    Unsecured Creditors of Nortel Networks Inc., et al

S. Richard Orzy, Gavin H. Finlayson and Richard B. Swan,
    for the responding parties, the Ad Hoc Group of Bondholders

Heard: In Writing

Motion for leave to appeal from the order of Justice Frank
    J. C. Newbould of the Superior Court of Justice, dated January 24, 2017.

ENDORSEMENT

[1]

The self-represented moving parties, Joseph McAvoy and Jennifer Holley
    (the Leave Applicants), seek leave to appeal the Sanction Order of Newbould
    J. dated January 24, 2017. The Monitor, the Canadian and US Debtors, Nortel
    Networks Inc., the Official Committee of Unsecured Creditors, the Ad Hoc
    Committee of Bondholders, the Nortel Continuing Employees, and the
    Court-Appointed Representatives of the Former and Disabled Employees of Nortel
    all oppose the motion.

[2]

Leave to appeal is granted sparingly in
Companies Creditors
    Arrangement Act
,
R.S.C. 1985, c. C-36

(
CCAA
)
proceedings and only where there are
    serious and arguable grounds that are of real and significant interest to the
    parties. In addressing whether leave should be granted, the court will consider
    whether:

a)

the proposed appeal is
prima facie
meritorious or frivolous;

b)

the points on the proposed appeal
    are of significance to the practice;

c)

the points on the proposed appeal
    are of significance to the action; and

d)

whether the
    proposed appeal will unduly hinder the progress of the action.

See,
Nortel Networks Corporation (Re)
, 2016 ONCA
    332, 130 O.R. (3d) 481, at para. 34.

[3]

We are satisfied that the stringent test for leave is not met in this
    case. The proposed appeal is not meritorious. As the supervising judge explained
    in his reasons, the Leave Applicants did not opt-out of the 2009 Representation
    Order for Disabled Employees (LTD Rep Order) and they are bound by the 2010
    Employee Settlement Agreement. The supervising judge correctly concluded the
    Leave Applicants have no right to opt out of the LTD Rep Order at this late stage:
    at para. 16.

[4]

The Leave Applicants are the only long-term disability beneficiaries to
    oppose the Plan, which has the support of over 99% of Nortels unsecured
    creditors based both on value and on number. This belies the importance of the
    proposed appeal to the practice or to the action. And, as this court has
    already emphasized, further delays in this very protracted litigation are to be
    avoided:
Nortel Networks Corporation (Re)
, 2016 ONCA 332, 130 O.R.
    (3d) 481, at paras. 102-103;
Nortel Networks Corporation (Re)
, 2016
    ONCA 749, 41 C.B.R. (6th) 174, at para. 11.

[5]

Finally, by order dated February 17, 2017, MacPherson J.A. required all
    materials on this leave motion to be filed by February 24, 2017, on which date
    the motion would be submitted to the panel for consideration. On February 27,
    2017, the Leave Applicants filed a notice of constitutional question
    challenging the constitutionality of ss. 6(1) and 11 of the
CCAA
.
    Counsel for the Monitor submits the notice should not be considered. We agree.
    The notice was filed far too late in these proceedings and, as noted, the Leave
    Applicants are bound by the 2010 Employee Settlement Agreement.

[6]

The motion for leave to appeal is dismissed.

"Alexandra Hoy
    A.C.J.O."

"S.E. Pepall J.A."

"David Brown J.A."


