Background:

• In 2020, mdf hired Echelon to assist in securing financing for its growth strategy. The agreement specified that Echelon would receive a success fee for completed financing transactions.
• In October 2020, Echelon arranged financing for mdf through the Bank of Nova Scotia (BNS) and Roynat Capital, totaling $50 million.
• During the term of the agreement, mdf pursued a new transaction to acquire Periscope Intermediate Corporation, needing additional financing from BNS but without involving Echelon.

Key Legal Issues:

1. Entitlement to Success Fee: Echelon claimed entitlement to a success fee on financing sourced for the Periscope acquisition.
2. Definition of “Related Transaction”: Whether the new 2021 financing with BNS was a “related transaction” under the agreement, obliging mdf to pay Echelon.
3. Protected Fees Post-Agreement: If mdf’s 2021 financing was covered under a “protected fee” clause due to the timing of the financing.

Decision:

• The court ruled the 2021 BNS financing a “related transaction” as it built upon the terms of the original 2020 credit facilities arranged by Echelon.
• Echelon was entitled to a success fee under the agreement’s protected fee clause, which applied to financing secured within 12 months of the agreement’s expiration.

Outcome:

• Summary judgment granted to Echelon for a success fee of $658,800 plus taxes, with mdf responsible for additional agreed costs of $73,843.95.

Total Monetary Award

• Success Fee: Echelon was awarded a success fee of $658,800.
• Taxes on Success Fee: An additional $98,655.30 in taxes.
• Agreed Costs: The parties had agreed on costs of $73,843.95.