Applicants sought a preliminary order under s. 192 of the Canada Business Corporations Act to implement a proposed corporate arrangement restructuring significant unsecured note debt.
The restructuring contemplated an amalgamation followed by an exchange of unsecured notes for a combination of cash and new secured notes, forming part of a broader recapitalization of the applicants’ financing structure.
The court considered whether the proposed arrangement met the statutory requirements under the CBCA, including solvency, impracticability of implementing the restructuring through other statutory mechanisms, and good faith.
The court also considered whether it had authority to grant interim relief including a stay of enforcement rights pending negotiation and implementation of the arrangement.
Finding the statutory requirements met and the application brought in good faith, the court granted the requested preliminary order and authorized a temporary stay to maintain the status quo while stakeholders negotiated the restructuring.