2019 QCCA 766, 2019 QCCA 766

Arrangement relatif à 9354-9186 Québec inc. (Bluberi Gaming Technologies Inc.) 2019 QCCA 766 COURT OF APPEAL CANADA PROVINCE OF QUEBEC REGISTRY OF MONTREAL No: 500-09-027421-189 (500-11-049737-154) MINUTES OF THE HEARING DATE: May 1st, 2019 THE HONOURABLE GENEVIÈVE MARCOTTE, J.A. APPLICANTS COUNSEL 9354-9186 QUÉBEC INC. (FORMERLY BLUBERI GAMING TECHNOLOGIES INC.) 65-9178 QUÉBEC INC. FORMERLY BLUBERI GROUP INC.) Mtre CHRISTIAN LACHANCE ( Davies Ward Phillips & Vineberg s.e.n.c.r.l, s.r.

l) RESPONDENT COUNSEL CALLIDUS CAPITAL CORPORATION Mtre PATRICE BENOIT (Gowling WLG) RESPONDENTS COUNSEL

INTERNATIONAL GAME TECHNOLOGY DELOITTE S.E.N.C.R.L. LUC CARIGNAN FRANÇOIS VIGNEAULT PHILIPPE MILLETTE FRANCIS PROULX FRANÇOIS PELLETIER Mtre JOCELYN PERREAULT (McCarthy Thétrault) IMPLEADED PARTY COUNSEL ERNST & YOUNG LLP Mtre JOSEPH REYNAUD (Stikeman Elliott) IMPLEADED PARTIES COUNSEL IMF BENTHAM LIMITED BENTHAM CAPITAL LIMITED SMT HAUTES TECHNOLOGIES Mtre Neil a. peden (Woods LLP) DESCRIPTION: Application for a stay of execution Clerk: Mélanie Camiré Courtroom: RC-18 HEARING 9 h 30 Commencement of the hearing. Counsel are excused from attending the hearing. BY THE JUDGE: Judgment – see page 3. Conclusion of the hearing. (

s) Mélanie Camiré Clerk BY THE JUDGE

JUDGMENT [ 1 ] I am tasked with the adjudication of an application for a stay of execution of a judgment rendered by the Court of Appeal on February 4, 2019 [1] , which: 1) set aside a Superior Court judgment rendered in a matter under the Companies' Creditors Arrangement Act [2] and 2) issued a number of orders relating to the approval of:

a) a plan of arrangement submitted by the Applicants’ principal secured creditor (Respondent Callidus) and,

b) the Applicants’ litigation financing agreement, all to be carried out in the context of the meeting of creditors to be convened by the Superior Court. [ 2 ] The applicants have since filed an application for leave to appeal of this judgment before the Supreme Court of Canada and seek a stay of execution of said judgment pending the outcome of their application and/or appeal, pursuant to the second paragraph of

article 390 C.p.c .: 390. L’arrêt est exécutoire immédiatement et il porte intérêt à compter de sa date, sauf mention contraire. Il est mis à exécution, tant pour le principal que pour, le cas échéant, les frais de justice, par le tribunal de première instance. Cependant, la Cour d’appel ou l’un de ses juges peut, sur demande, ordonner, aux conditions appropriées, d’en suspendre l’exécution, si la

partie démontre son intention de présenter une demande d’autorisation d’appel à la Cour suprême du Canada. 390. A decision of the Court of Appeal is enforceable immediately and bears interest from the date it is rendered unless it specifies otherwise. Its execution, as regards both the principal and any legal costs, is carried out by the court of first instance. However, the Court of Appeal or one of its judges, on an application, may order execution stayed, on appropriate conditions, if the party shows that it intends to bring an application for leave to appeal to the Supreme Court of Canada. [ 3 ] The test previously developed under

section 552.1 a. C.p.c. [3] continues to apply under

section 390 C.p.c . [4] In order to obtain a stay of execution of the Court of Appeal judgment, the applicant must demonstrate that 1) the appeal intended before the Supreme Court raises one or more serious issues, 2) the applicant would suffer irreparable harm if no stay were granted, and 3) the respondent would suffer little, if any prejudice at all, and such prejudice would be clearly outweighed by the prejudice otherwise suffered by the applicant. [5] [ 4 ] The issues raised in the application for leave to appeal to the Supreme Court are the following: 1. Can a creditor vote on the CCAA plan it sponsors? 2.

Can a creditor who sponsors a CCAA plan vote in the same class as the other creditors? 3. Does a CCAA court have jurisdiction to prevent a creditor from voting on a plan, and if so in what circumstances? 4.

Does a CCAA court have jurisdiction to authorize litigation funding without a vote to the creditors? [ 5 ] The Applicants argue that Respondent Callidus admitted that at least three of these issues are “of the utmost importance” to the practice of law throughout the country, at the time of seeking leave to appeal from the Superior Court judgment. [ 6 ] They also claim that the immediate execution of the Court of Appeal judgment is likely to cause them irreparable harm, while little prejudice will be suffered by the Respondents if the stay of execution is granted. [ 7 ] The undersigned is satisfied that the conditions for granting a full stay of execution are met. [ 8 ] For one, the issues raised before the Supreme Court of Canada are serious and novel, as also previously recognized by my colleague Schrager J., at the time of granting leave to appeal of the Superior Court judgment. [6] [ 9 ] Moreover, without the stay of execution, a meeting of creditors will be convened by the Superior Court, as ordered by the Court of Appeal, for the purpose of considering Respondent Callidus’ plan of arrangement and the Applicants’ litigation financing agreement.

It is undeniable that in the event that the Callidus plan of arrangement is approved and implemented, it will become difficult if not impossible to restore the parties to the situation that prevailed before the meetings, thus rendering the appeal somewhat theoretical. [ 10 ] The Respondents suggested at the hearing that I consider granting a partial stay of execution that would stay the potential implementation of the plan of arrangement pending the outcome of the Application for leave to appeal of the Supreme Court, while allowing the parties to go forward with the meeting of creditors and their vote on the plan of arrangement. [ 11 ] The Applicants argued that this partial stay of execution would still cause them serious and irreparable harm, given their inability to obtain the necessary funding for an alternative plan at this stage because of the uncertainty surrounding the fate of their appeal.

They add that to hold a vote under the conditions set out by this Court (which recognize Respondent Callidus’ right to vote on the arrangement it proposes) could prove useless in the event that the Applicants are successful before the Supreme Court and would only serve to drain unnecessarily the parties’ resources and that of the judiciary, should more directions be required for the purpose of the meetings and the vote.

[ 12 ] Under the circumstances, the undersigned agrees that the Applicants are likely to suffer serious and irreparable harm if a full stay of execution is not granted and that the delay that may be suffered by the Respondents regarding the voting and/or implementation of Callidus’ plan of arrangement is outweighed by the prejudice otherwise suffered by the Applicants if the stay of execution is not granted.

FOR THESE REASONS, THE UNDERSIGNED: [ 13 ] GRANTS the Application for a stay of execution; [ 14 ] STAYS the execution of the Court of Appeal judgment rendered on February 4, 2019, pending a decision of the Supreme Court of Canada on the Applicants’ Application for leave to appeal and, if such leave to appeal is granted, until the decision of the Supreme Court of Canada; [ 15 ] WITHOUT LEGAL COSTS . GENEVIÈVE MARCOTTE , J.A.