James A. Woods

On a motion by a major contingent creditor to set aside an Initial Order under the CCAA, the court held that the applicant corporation, whose only asset was its partnership interest in an insolvent accounting partnership facing massive legacy negligence claims, was insolvent when contingent liabilities and defence costs were properly considered.

The court declined to deny CCAA relief based on allegations about historical litigation misconduct, holding that the relevant good faith inquiry concerns conduct within the CCAA proceeding itself.

The stay was properly extended to the partnership and its insurers because their affairs were inextricably intertwined with the debtor and a global resolution of the Castor litigation would be significantly impaired without that protection.

The court also upheld the creditors’ committee and CLCA’s ability to fund its reasonable legal fees as part of the negotiated restructuring framework.

The appellants obtained judgments in the United States against the Islamic Republic of Iran and its agencies for kidnapping, detention, and torture.

They brought an action in Ontario to enforce those judgments.

The motion judge dismissed the action on the basis that the defendants were immune from jurisdiction under the State Immunity Act.

On appeal, the appellants argued that the acts constituted commercial activity, that a common law exception applied, and that the defendants lost immunity by violating jus cogens norms.

The Court of Appeal dismissed the appeal, finding that the State Immunity Act is a complete code, the acts were not commercial, and customary international law does not recognize a jus cogens exception to state immunity.

The Supreme Court of Canada considered a proposed plan of arrangement for a leveraged buyout of BCE Inc. that would add substantial debt to Bell Canada, reducing the trading value of its debentures.

The debentureholders opposed the arrangement, claiming oppression under s. 241 of the CBCA and arguing the arrangement was not fair and reasonable under s. 192.

The Court held that the directors' fiduciary duty is owed to the corporation, not to specific stakeholders, though directors may consider stakeholder interests.

The debentureholders failed to establish a reasonable expectation that their investment grade rating would be maintained.

The Court affirmed the trial judge's approval of the arrangement, finding it had a valid business purpose and resolved objections in a fair and balanced way.

The appellants, holders of Asset Backed Commercial Paper (ABCP) notes, appealed a decision sanctioning a restructuring plan under the Companies' Creditors Arrangement Act (CCAA).

The plan included comprehensive releases of third-party financial institutions from liability, including certain claims relating to fraud.

The appellants argued the CCAA does not permit third-party releases and that the releases were unconstitutional.

The Court of Appeal dismissed the appeal, holding that the CCAA permits third-party releases that are reasonably connected to the proposed restructuring.

The Court found the application judge did not err in concluding the plan was fair and reasonable, as the releases were necessary for the restructuring to succeed and benefited the creditors as a whole.

The respondent commenced an action in Quebec claiming damages for loss of performance incentives and reputation after a satellite it helped manufacture was damaged during testing.

The appellants, all domiciled in the United States, brought declinatory motions challenging the jurisdiction of the Quebec courts under the Civil Code of Québec.

The Supreme Court of Canada held that the Quebec courts had jurisdiction because the respondent suffered damage to its reputation at its Quebec facility.

The Court further held that the 'real and substantial connection' test is subsumed within the Code's provisions and that the appellants failed to establish that another forum was clearly more appropriate under the doctrine of forum non conveniens.

The respondent brought an action against the appellants and during an examination on discovery, the appellants requested the production of numerous documents.

The respondent sought a confidentiality agreement to prevent the documents from being disclosed to third parties, which the appellants refused.

The Supreme Court of Canada held that there is an implied rule of confidentiality in Quebec civil procedure regarding information obtained at an examination on discovery.

The Court found that an examination on discovery is not a sitting of the court and that the implied rule of confidentiality protects privacy interests recognized in the Quebec Charter and the Civil Code of Québec.