Mitchell Grossell

The University of Sudbury brought a motion to set aside a Notice of Disclaimer issued by Laurentian University under section 32 of the CCAA.

Laurentian University sought to disclaim the Federation Agreements with its federated universities as part of its financial restructuring.

The moving party argued the disclaimer was issued in bad faith, would cause significant financial hardship, and would negatively impact French language rights.

The court dismissed the motion, finding no bad faith, insufficient evidence of significant financial hardship to outweigh the restructuring needs, and noting that the moving party had already resolved to become an independent francophone university.

The court concluded the disclaimer was necessary for Laurentian University to present a viable plan to its creditors and avoid bankruptcy.

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.