In CCAA restructuring proceedings, shareholder class action plaintiffs sought to limit the scope of a stay of proceedings so that certification, leave, and amendment motions in related Ontario and Quebec securities class actions could proceed against auditors, underwriters, and former directors.
The court applied the established test for lifting a CCAA stay, considering relative prejudice, balance of convenience, and the merits.
Given the pending appeal concerning whether shareholder claims constituted “equity claims” under the Companies’ Creditors Arrangement Act and the imminent creditor meeting regarding a proposed plan of arrangement, the court found that maintaining the stay temporarily would avoid prejudice and promote orderly proceedings.
The court held that the balance of convenience favoured maintaining the stay so that the auditors and underwriters could focus on the appeal and restructuring process.
The motion to limit the stay was dismissed without prejudice to renewal after the creditor meeting.
