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.
