Executive Summary: Key Legal and Evidentiary Issues

• Application sought recognition of two letters of request from the U.S. Bankruptcy Court for the District of Delaware to compel document production from Canadian engineering firms ISL and Aspect.

• Cross-border insolvency proceedings under the Companies' Creditors Arrangement Act involve debtors operating in both Canada and the U.S., with ongoing Chapter 11 adversary proceedings against Walmart.

• ISL raised concerns regarding the overly broad temporal scope of the document requests, which the Trustee's counsel resolved by undertaking to narrow the period.

• Compensation for reasonable costs of compliance was ordered under the BC Supreme Court Civil Rules third-party production rule (SCCR 7-1(18)), with administration costs capped at $1,000 for ISL.

• Potential deposition attendance costs raised the issue of "buying evidence," which the Court directed to be resolved under applicable U.S. procedural rules.

• Aspect Structural Engineers did not respond to or appear at the application, leaving their position unknown.

Background of the cross-border insolvency proceedings

This case arises from a cross-border insolvency proceeding under the Companies' Creditors Arrangement Act (CCAA) involving SLP Holdings Ltd., Structurlam Mass Timber Corporation, Structurlam Mass Timber U.S., Inc. ("SMTU"), and Natural Outcomes, LLC. The debtors' businesses operated in both Canada and the United States, and the Supreme Court of British Columbia, under the supervision of Madam Justice S.C. Fitzpatrick since 2023, has overseen the Canadian side of the proceedings. In the U.S., Chapter 11 proceedings continue, principally relating to an adversary proceeding advanced against Walmart over the termination of a lease with SMTU.

The application for recognition of letters of request

The applicant, Heather L. Barlow, in her capacity as the Liquidating Trustee of the Structurlam Liquidating Trust, brought an application before the Court to recognize and give full force and effect to two letters of request issued by the U.S. Bankruptcy Court for the District of Delaware on December 31, 2025. These letters directed the production of documents from two Canadian engineering firms: ISL Engineering and Land Services Ltd. ("ISL"), based in Alberta, and Aspect Structural Engineers ("Aspect"), based in British Columbia. Both firms had been retained by the Trustee on behalf of SMTU in connection with the Walmart claim, and their engineering work and reports were deemed directly relevant to the issues in the adversary proceeding with Walmart in the U.S.

ISL's concerns regarding scope and costs

ISL responded to the application and was represented by counsel at the hearing. ISL's primary concern was the broad scope of the document requests, which on their face referred to a wider period of time than what was arguably required. To address this, Mr. Latham, counsel for the Trustee, gave an undertaking before the Court that the subject period of the request would be narrowed and that he would confirm that in writing to ISL's counsel at the conclusion of the hearing. The Court found this resolution satisfactory. ISL also raised concerns about the costs of compliance with the document production requests. The Court noted that the BC Supreme Court Civil Rules include a third-party production rule under SCCR 7-1(18), which regularly entitles any person compelled to produce documents to compensation for reasonable costs.

Costs and the concern of "buying evidence"

On the question of deposition costs, the Court acknowledged Mr. Latham's comments that there is some concern about "buying evidence," which is obviously a concern that should be avoided if at all possible. The Court directed that if there is a request for payment in respect of the costs of attendance — both preparation and actual attendance — at a deposition by an ISL representative, that should be considered in light of whatever relevant U.S. procedural rule applies, with the issue to be discussed further by counsel for ISL and the Trustee. The Court also clarified that its comments on the costs issues would be applied to both ISL and Aspect. Additionally, ISL was ordered to be entitled to its costs for its counsel's preparation and attendance fees at the hearing in accordance with the SCCR, given that she was attending in BC.

Ruling and outcome

The Court was satisfied that the relief should be granted for reasons advanced by the Trustee's counsel, finding the procedure necessary to obtain the documentation and evidence that would hopefully advance the proceedings in the U.S. Justice Fitzpatrick signed the order as sought on the bench, granting recognition and full force and effect to the two letters of request. Administration costs payable by the Trustee to ISL were capped at $1,000, based on ISL's counsel's rough estimate of $125 an hour for approximately six hours of work. The order as signed on the bench did not include the additional terms clarifying the scope of the requests and the costs issues, but the Court did not think it necessary to have a separate order for those matters since it was on the record and everyone was quite clear as to what was ordered. The Trustee was the successful party in obtaining the order; however, no specific monetary award or damages were determined in this decision, as it dealt solely with the procedural matter of compelling document production from third-party engineering firms.