In a CCAA restructuring of Stelco Inc., the appellants, representing subordinated debenture holders, sought to be classified as a separate class of creditors for voting purposes on the proposed plan.
They argued their interests conflicted with senior debt holders due to a turnover payment provision requiring them to remit distributions to senior debt holders until the senior debt was paid in full.
The supervising judge dismissed the motion, finding no material distinction in their legal rights vis-à-vis the debtor company.
The Court of Appeal granted leave but dismissed the appeal, affirming that creditor classification under the CCAA is determined by the creditors' legal rights in relation to the debtor company, not their rights as creditors in relation to each other.
