The applicant, Sherritt International Corporation, sought final approval of a plan of arrangement under section 192 of the Canada Business Corporations Act to restructure its debt.
The application was opposed by two term lenders, who argued that their term loan was not a 'security' capable of arrangement, that they were unfairly grouped in the same voting class as unsecured noteholders, and that the plan was substantively unfair.
The Superior Court of Justice rejected these arguments, finding that the term loan fell within the statutory definition of a debt obligation, that the voting classification was appropriate given the shared unsecured nature of the claims, and that the plan was fair and reasonable.
The court approved the plan of arrangement, while also providing a detailed critique of the limitations and lack of independence of the fairness opinion submitted by the applicant.
