QM Group: the distribution waits for Phantom Disposal's cross-motion

On October 28, 2026, Justice W.D. Black of the Ontario Superior Court of Justice (Commercial List) extended the stay in the QM Group's CCAA proceedings to April 30, 2027, and put the other half of the monitor's motion, approval of its proposed cost allocation and distribution methodology, over to November 25. No opposition to the extension was "expressed or evident", the amended endorsement says; the judge found it "appropriate and reasonable" and signed an order that the monitor, Alvarez & Marsal Canada Inc., provided for it. The method waits because one of the lien claimants, 2386843 Ontario Inc. o/a Phantom Disposal, had told the monitor (the judge believed the day before) that it wanted the distribution relief adjourned so that it could bring a cross-motion. The endorsement records the agreement that the relief will be heard on November 25, 2026 at 10:00 a.m., for two hours, per the Endorsement of Justice Black, Oct. 28, 2026, paras. 1–3, 7.

The cross-motion, as the endorsement describes it, "is multi-faceted but fundamentally asserts that the lien claimants are not being fairly treated in the proposed Distribution," per the Endorsement, para. 4. Phantom's aide memoire for the hearing puts figures to the complaint. On its count, the method would give Intact Insurance Company about $1.51 million of the $2.85 million remaining for creditors, while the other holders of proven lien claims, which it calls the trade lien claimants, "with $12.9 million in admitted claims, would share $1.34 million, or 10.4 cents on the dollar." By the same count, Phantom itself, on about $457,000 of accepted lien claims, would receive less than $50,000, per the Phantom Disposal Aide Memoire, Oct. 28, 2026, paras. 1, 9. The method itself was reported here on October 27.

Two accounts of the timetable

The first disagreement was over how long to wait. The endorsement records that the monitor's aide memoire "indicated that counsel for Phantom was suggesting a timetable that would not result in the Distribution Relief issues being addressed on the merits until sometime in 2027." In the endorsement's account of its position, the monitor was prepared to agree to a brief adjournment but not to the one Phantom requested, "which would delay distributions and drive up costs," per the Endorsement, paras. 5–6. The monitor's aide memoire for this hearing is not in the record.

Phantom's own aide memoire, dated October 28, says that it does not oppose extending the stay and that it "agrees to adjourn the Methodology to the third week of November 2026, with its cross-motion heard at the same time and no distribution in the meantime," per the Phantom Disposal Aide Memoire, para. 2. "In the result," the endorsement says, "it was agreed that the matter will be heard on November 25, 2026," with the parties to work out a timetable for the procedural steps before then. Counsel for Intact, for Ontario Trucking and Disposal Ltd., for Cooper Equipment Rentals and for the lien claimant ML Group Corp also appeared, per the Endorsement, p. 1 & para. 7.

What Phantom says has never been decided

Phantom's argument starts with what the lien claimants held before the sales. The lien regularization order gave each claimant who delivered a lien notice a charge, the Lien Charge, against the company's property in the project concerned, "equivalent to, and only to the extent of, any security granted under Provincial Lien Legislation," per the Lien Regularization Order, para. 11. Before the transactions, Phantom says, the Lien Charge "ranked ahead of BNS and Intact over project property, including receivables and holdback," per the Phantom Disposal Aide Memoire, para. 4. Under WeShall Investments Inc.'s reverse vesting transaction, the assets the QM vendors were to keep included, the monitor's Second Report said, "an estimated $7 million to $10 million of holdback amounts, comprised of existing amounts due as well as amounts relating to future work to be performed on a free and clear basis," per the Second Report of the Monitor, Oct. 22, 2025, para. 6.3.

Justice Cavanagh's reasons for approving that transaction said the pre-filing lien claims "will be vested out to ResidualCo and can be advanced as a claim against the Lien Charge against the proceeds of the Transactions," per the Endorsement of Justice Cavanagh, reasons released Nov. 4, 2025, para. 17. The approval and reverse vesting order provides that the claims and encumbrances it transfers or discharges attach to the excluded assets "with the same priority as they had with respect to the Vendors' Property immediately prior to the Transactions as if the Transactions had not occurred," per the Approval and Reverse Vesting Order, Oct. 24, 2025, para. 10. "Yet the trades' priority over those proceeds, including the purchase price, has never been determined," Phantom says. "The Methodology does not explain how that priority is preserved," per the Phantom Disposal Aide Memoire, para. 4.

Phantom points to Justice Kimmel's endorsement of January 29, 2026, which said a stay extension was required to support, among other things, "ongoing consideration of a proposed allocation of the proceeds from the two Court-approved transactions, a means of addressing remaining secured creditor claims and relevant priorities," per the Phantom Disposal Aide Memoire, para. 4 n. 9 and the Endorsement of Justice Kimmel, Jan. 29, 2026, para. 11. The monitor's view of priority is in its Sixth Report: it believes proven lien claims "rank in priority to all creditor claims in respect of the LRO Cash Pool," because lien claimants have potential statutory deemed trust claims to that pool, and it calls a pari passu, pro rata distribution of it a fair and reasonable approach that "reflects the potential priority entitlement Lien Claimants have to the LRO Cash Pool," per the Sixth Report of the Monitor, Oct. 25, 2026, paras. 5.27(iii)(b), 5.31.

Intact, and the agreements Phantom wants produced

Intact bonded certain of the group's projects. If the method is approved, the Sixth Report says, Intact will receive the whole of the Hamilton transfer station's pool, estimated at about $947,000, on its secured indemnity claim, and its subrogated lien claim, for amounts it paid lien claimants under its bonds, will share pro rata in the lien claimants' pool, per the Sixth Report, paras. 4.12, 4.19–4.21. The monitor says it has discussed the method with Intact "and understands Intact is supportive of it," per the Sixth Report, para. 5.28.