The applicant, Green Relief Inc., sought approval of a transaction for the sale of its assets to 2650064 Ontario Inc. in the course of a CCAA proceeding.
The transaction included a condition precedent releasing claims against current directors, legal counsel, the Monitor, and its counsel.
Certain founding shareholders opposed the release, arguing the court lacked jurisdiction to grant it prior to a plan of arrangement and that they wished to pursue claims for loss of chance.
The court approved the transaction and the release, finding the sale process was reasonable and the release was rationally connected to the restructuring, benefiting creditors by preventing the depletion of the estate through indemnity claims.
The court temporarily lifted the stay of proceedings to allow claims covered by tail insurance to be filed.
