SUPERIOR COURT OF JUSTICE – ONTARIO
(COMMERCIAL LIST)
RE: IN THE MATTER OF AN APPLICATION UNDER SECTION 192 OF THE CANADA BUSINESS CORPORATIONS ACT, R.S.C. 1985, c. C-44, AS AMENDED, AND RULES 14.05(2) and 14.05(3) OF THE RULES OF CIVIL PROCEDURE
CORUS ENTERTAINMENT INC. AND 17311737 CANADA INC. Applicants
BEFORE: Justice J. Dietrich
COUNSEL: Mark Wasserman, Jeremy Dacks, Martino Calvaruso, Marleigh Dick, Sierra Farr, for the Corus Entertainment Inc. et al,
Sean Zweig, Mike Shakra, Jamie Ernst, for the Senior Unsecured Noteholders,
Robert Thornton, Mitch Grossell, Daniel Alievsky, for the Major Noteholder/Lender,
Roger Jaipargas, for GBC 25 Dockside Inc.,
Sebastian Ouellet, Self Represented
HEARD: March 12 and March 24, 2026
ENDORSEMENT
1Corus Entertainment Inc. and 17311737 Canada Inc. (together, the “Applicants”) seek a final order approving a proposed arrangement (the “Arrangement”) under the Canada Business Corporations Act, R.S.C. 1985, c. C-44.
2A group of Class B Shareholders being, Sébastien Ouellet, Christian Thibault, Restock Canada Inc., Jean-Sébastien Trudel, Stéphane Gagnon, 12241561 Canada Inc., 12241595 Canada Inc., Martin Quellet, Radja Chekirou, Pierre-Luc Ravary-Godbout, Julie Leclaire, Roland Quellet, Chantal Ouellet, François Thibault, Élisabeth Lombart, Darquise Lacasse, and Daniel Thibault (the “Opposing Shareholders”) oppose the Applicants’ requested relief.
3The matter was first before me on March 12, 2026. At that time, I released a short endorsement providing that additional evidence was to be delivered by March 17, 2026 and a further hearing was scheduled for today.
4The Applicants filed two additional affidavits: (i) a supplementary affidavit of John Gossling sworn March 17, 2026; and (ii) an affidavit of Jeremy Matican sworn March 17, 2026. The Applicants now also seek a sealing order in respect of Confidential Exhibit A of the March 17, 2026 affidavit of Mr. Gossling and Confidential Exhibits A, B, C and D of Mr. Matican’s affidavit.
5On March 20, 2026, the Opposing Shareholder Sebastien Ouellet of Restock Canada Inc. filed a ‘Supplementary Memorandum of Fact and Law of a Self-Represented Class B Shareholder in response to the Supplementary Application Record of the Applications.’ (the “Memorandum”). Despite referring to himself as self-represented, Weirfoulds LLP has filed a notice of appearance for Mr. Oulett and the other Opposing Shareholders. As counsel was expected today, no court reporter was present. Mr. Ouellet advised at the start of the hearing that he was appearing self-represented and as such the virtual hearing was recorded.
6The Memorandum did not contain an affidavit despite numerous factual allegations. The memorandum also requested not only an adjournment to review additional material, but additional relief including (i) disclosure of the Confidential Exhibits, (ii) production of documents including existing management presentations, virtual data room indices, third party appraisals, management assessments and other indications of value; and (iii) a direction that the Applicants consider amendments to the Recapitalization Transaction and negotiation with Opposing Shareholders. In large part, the memorandum repeated submissions made prior to the March 12, 2026 hearing.
7The relief requested by Mr. Ouellet was not put forward in a timely manner as this application was first returnable on March 12, 2026. Nor is the relief related solely to the additional evidence. The matters raised by Mr. Ouellet were matters that should have been known by review of the original material filed by the Applicants. The additional evidence simply provides more details on matters that were already addressed in the material before the Court on March 12, 2026. Further, none of the Opposing Shareholders including Mr. Ouellet has chosen to cross-examine any of the affidavits put forward by the Applicants, despite the affidavits being sworn by John Gossling on November 2, 2025, December 13, 2025, February 10, 2025 and March 17, 2026 and by Jeremy Matican sworn on March 17, 2026.
8Accordingly, I am not prepared to grant the adjournment requested by Mr. Ouellet or any of the relief raised by him in the memorandum as he has had an opportunity to previously obtain further information through cross-examination and has not chosen to do so.
9For the reasons outlined below, the relief sought by the Applicants is granted.
10Defined terms used but not otherwise defined herein have the meaning provided to them in the factum of the Applicants filed for use at this hearing.
Background
The Company and its Financial Position
11Corus Entertainment and its subsidiaries (collectively, the “Corus Group” or the “Company”) are Canada’s largest independent pure play media and content company and largest independent broadcaster. The Corus Group operates 25 specialty television networks, 15 conventional television stations, and 36 radio stations, along with digital and streaming services, technology and media services, and a content business. As at August 31, 2025, the Corus Group employed approximately 2,261 employees across Canada and had dozens of independent contractors.
12Corus Entertainment is a public company incorporated under the CBCA. It has two classes of shares outstanding, held by the “Existing Shareholders”: (i) 3,364,994 Class A voting participating shares (“Class A Voting Shares”); and (ii) 196,075,164 Class B non-voting participating shares (“Class B Non-Voting Shares”), which are listed on the Toronto Stock Exchange. As at August 31, 2025, 86% of the outstanding Class A Voting Shares were held by entities owned by the Shaw Family Living Trust (the “SFLT”) and its subsidiaries, affiliates, or related parties.
13Although the Corus Group has been a leader in the Canadian television and radio industry for many years, it is currently facing significant financial challenges.
14As at August 31, 2025, the Corus Group had total assets of approximately $1.3 billion, total liabilities of approximately $1.9 billion, and equity totaling negative $668.3 million.
15On January 14, 2026, the Company released its fiscal first quarter 2026 financial results (the “2026 Q1 Financials”) which show:
a. consolidated revenue decreased 18% from the comparable prior year period;
b. consolidated segment profit decreased 32% from the comparable prior year period;
c. consolidated segment profit margin of 21% decreased from 26% in the comparable prior year period;
d. net loss attributable to shareholders of $11.1 million ($0.06 loss per share basic) for the quarter, compared to net income of $11.9 million ($0.06 earnings per share basic) in the comparable prior year period;
e. free cash flow of negative $53.6 million for the quarter, compared to negative $10.1 million in the comparable prior year period; and
f. total accumulated deficit attributable to shareholders of negative $710.2 million and total deficit of negative $671.9 million.
16As at November 30, 2025, the Corus Group owed approximately $90 million under the Company’s Revolving Facility, $301,098,032.83 under the Company’s Term Loan Facility, and $750 million in respect of the Company’s senior unsecured notes (the “Senior Notes”).
17On March 11, 2026, Corus Entertainment requested an additional draw of $20 million under the Revolving Facility. On March 13, 2026, the requested amount was advanced, bringing the total principal amount outstanding under the Revolving Facility to $110 million, such that the Company only has $15 million left that could be advanced under the Revolving Facility, subject to satisfying the applicable draw conditions.
The Process Leading to the Arrangement
18The Corus Group has made a concerted effort to address its financial position over the past 24 months, including by implementing initiatives to reduce its costs and improve its margins, and conducting the Strategic Review under the oversight of a sub-committee of independent directors.
19After launching the Strategic Review, in September 2024, the Corus Group retained Jefferies LLC (“Jefferies”) to act as its financial advisor to assist in conducting a formal process to explore, evaluate, and pursue various potential solutions. The Corus Group, with the assistance of Jefferies, explored three strategic and financial alternatives concurrently: (i) a sale process, commenced in October 2024 (the “Sales Process”); (ii) a formal capital-raising solicitation process, launched in December 2024 (the “Capital Raising Process”); and (iii) an assessment of solutions for the Corus Group’s current stakeholders, a process that ultimately resulted in the Recapitalization Transaction (described below) which forms the basis for the proposed Arrangement.
20Mr. Matican’s affidavit of March 17, 2026 provides additional details about the Strategic Review and its results. In connection with the Sale Process, on December 13, 2024, Jefferies issued a process letter (the “Sale Process Letter”). Pursuant to the Sale Process Letter, prospective purchasers were required to submit a proposal by no later January 16, 2025. Through the Sale Process, Jefferies initiated contact with 38 prospective investors or acquirers, of whom eight executed non-disclosure agreements. The eight prospective purchasers who executed non-disclosure agreements were granted access to a virtual data room (“VDR”) and presentation including confidential information concerning the Corus Group. Jefferies facilitated initial buyer due diligence, and answered questions by prospective purchasers with the assistance of management of the Company. Corus Entertainment received two non-binding proposals. Neither proposal contemplated a purchase price or provided an enterprise value for the Company in an amount that would be sufficient to (i) provide more than minimal recovery for the Senior Notes, or (ii) satisfy the $500 million of Senior Notes’ claims in full that are being compromised in the Recapitalization Transaction. Neither proposal provided for any recovery for the Company's Existing Shareholders. In addition to providing for insufficient recoveries, both proposals were non-binding and subject to, among other things, the satisfactory completion of due diligence and the negotiation of definitive documentation.
21In connection with the Capital Raising Process, on December 20, 2024, Jefferies issued a process letter (the “Capital Raising Process Letter”). Pursuant to the Capital Raising Process Letter, parties who proposed to provide financing to the Company were required to submit a proposal by January 16, 2025. During the Capital Raising Process, 54 prospective investors were contacted, of which 24 executed non-disclosure agreements and obtained access to the VDR. Jefferies facilitated initial due diligence, and answered questions by prospective financiers with the assistance of management of the Company. The Company received three non-binding expressions of interest in the Capital Raising Process. None of these proposals provided financing that would be sufficient to repay the Company's outstanding Credit Facilities and the Senior Notes in full and therefore, did not provide a comprehensive solution to the Company's capital structure.
22Following the unsuccessful Sale Process and Capital Raising Process, On March 4, 2025, a non-binding term sheet was submitted by the Major Noteholder, proposing to (i) acquire all of the secured term indebtedness and obligations of Corus Entertainment under its then current credit agreement at par value; and (ii) modify the terms and conditions of the secured Revolving Facility on closing of the proposed transaction (the “Debt Assignment”). The Debt Assignment was completed on March 21, 2025, at which time the Major Noteholder entered into the Credit Agreement with Corus Entertainment. The modified Credit Agreement (among other things) increased the debt-to-cash-flow ratio required under the financial covenants through to and including December 31, 2025, providing Corus Entertainment with additional liquidity and allowing the Corus Group the breathing room and flexibility necessary to pursue the Arrangement.
23Following the Strategic Review, Corus Entertainment determined that it is in the best interests of the Company and its stakeholders to proceed with the Recapitalization Transaction, as facilitated through the Arrangement.
24On November 2, 2025, following extensive discussions with the Lenders and the Senior Unsecured Noteholders, Corus Entertainment and Senior Unsecured Noteholders representing in excess of 74% in principal amount of the Senior Unsecured Notes executed a support agreement (the “Support Agreement”) in support of the Recapitalization Transaction. As well, Corus Entertainment has also entered into a support agreement with SFLT and other affiliated shareholders, Corus Entertainment’s largest holders of Class A Voting Shares, who agreed to vote their Class A Voting Shares in favour of the Recapitalization Transaction
The Recapitalization Transaction
25The key terms of the Recapitalization Transaction include the following:
a. the Company’s Revolving Facility will be amended and restated into a new first lien secured revolving credit facility with a $125 million commitment;
b. the Company’s Term Loan Facility of $301,098,032.83 will be settled and exchanged for: (i) cash equal to the accrued and unpaid interest in respect of the Term Loan Facility; (ii) cash equal to $1,098,032.83, plus the cash proceeds received by Corus Entertainment pursuant to the Senior Noteholders’ Participation Option in repayment of principal amount outstanding; and (iii) new first lien senior secured notes (the “New First Lien Notes”) in the amount of $300 million;
c. each holder of New First Lien Notes will also receive its share of warrants to be issued by NewCo, and such warrants will represent the right to acquire, on exercise, in aggregate, 10% of the issued and outstanding New Shares on a fully-diluted basis as at the Effective Date;
d. cash equal to the accrued and unpaid interest in respect of the Senior Notes will be paid, and a portion of the Company’s Senior Notes will be settled and exchanged for new senior secured second lien notes in an aggregate principal amount of $250 million (the “New Second Lien Notes”);
e. the remaining portion of the Senior Notes in an aggregate principal amount of $500 million will be acquired by NewCo, in consideration for the issuance of new shares of NewCo (the “New Shares”), and the aggregate of all such New Shares issued to the Senior Noteholders will represent 99% of all issued and outstanding New Shares on a non-diluted basis; and
f. the Class A Voting Shares and Class B Non-Voting Shares held by Existing Shareholders that are not Supporting Shareholders will be exchanged for New Shares on a 1:1 basis, and the aggregate of all such New Shares will represent 1% of all issued and outstanding New Shares on a non-diluted basis. Such exchange will be followed by the Share Consolidation. Each Supporting Shareholder’s Existing Shares will be surrendered for no consideration and cancelled.
26All obligations to the employees of the Corus Group as of the Effective Date and trade debt obligations will be unaffected by the Recapitalization Transaction. Employment arrangements will remain in place under their existing terms.
27The Final Order sought is intended to also constitute the basis for an exemption from the prospectus and registration requirements of provincial securities legislation and the Securities Act of 1933, as amended, of the United States of America with respect to the New First Lien Notes, New Second Lien Notes, New Shares, and New Warrants to be issued in accordance with the CBCA Plan.
The CBCA Process
28On November 3, 2025, at the Applicants’ request Justice Kimmel the Preliminary Interim Order, including a stay of proceedings in favour of the Company (the “Stay”). With the benefit of the breathing space afforded by the Stay, the Company and its legal and financial advisors continued ongoing discussions and negotiations with the Lenders, the Senior Noteholders, and their respective advisors to prepare the proposed CBCA Plan and management information circular (the “Circular”).
29On December 17, 2025, I granted the Interim Order, which: (a) provided for the calling, holding, and conduct of the Senior Noteholders’ Meeting and the Shareholders’ Meeting to consider and, if deemed advisable, vote to approve the Arrangement; and (b) extended the Stay until and including the earlier of the Effective Date and the date these proceedings are terminated.
30The CBCA Plan originally contemplated the assignment and transfer of the Head Office Lease and certain claims from Corus Entertainment to a new wholly-owned single purpose subsidiary of NewCo (“LeaseCo”). Since the Interim Order hearing, Corus Entertainment has engaged in productive discussions with the Landlord, GBC 25 Dockside Inc., which culminated in the parties agreeing to a Term Sheet for an amendment to the Head Office Lease dated February 9, 2026. The LeaseCo structure has accordingly been removed from the CBCA Plan.
31The Company filed an application with the CRTC on February 5, 2026, for approval of the Recapitalization Transaction. The Final Order Milestone Date has been automatically extended in accordance with the terms of the Support Agreement, as the Required Regulatory Approvals (as described therein) have not yet been obtained.
32The Meetings were called, held, and conducted in accordance with the Interim Order. A quorum was present at both Meetings, which were held on January 30, 2026:
a. At the Senior Noteholders’ Meeting, of the 660,059,000 votes cast by Senior Noteholders, representing approximately 88.01% of the principal amount of the Company’s outstanding Senior Notes, 99.98% were cast in favour of the Senior Noteholders’ Arrangement Resolution.
b. At the Shareholders’ Meeting: (a) of the 3,261,978 votes cast by holders of Class A Voting Shares (representing approximately 97.17% of the outstanding Class A Voting Shares), 99.68% were cast in favour of the Shareholders’ Arrangement Resolution; and (b) of the 58,417,111 votes cast by holders of Class B Non-Voting Shares (representing approximately 29.79% of the outstanding Class B Non-Voting Shares), 61.20% were cast in favour of the Shareholders’ Arrangement Resolution.
The Opposing Shareholders’ Position
33The Opposing Shareholders take the position that the Arrangement is not fair and reasonable, in that they argue there is no justification for the Existing Shareholders receiving only 1% of the outstanding New Shares on a non-diluted basis.
34The Opposing Shareholders specifically note that they do not oppose the recapitalization of the Company or the necessity of deleveraging the Company’s balance sheet to preserve it as a going concern. Further, the Opposing Shareholders do not put forward any separate valuation evidence.
35Rather, the Opposing Shareholders argue that (i) the decision-making process leading to the Recapitalization Transaction did not include adequate negotiations with the Opposing Shareholders; and (ii) the evidence put forward by the Applicants, including an Fairness Opinion from FTI Capital Advisors, LLC dated December 23, 2025 (the “Fairness Opinion”) do not justify the level of dilution of Existing Shareholders’ interest contemplated by the Arrangement.
36As such, the Opposing Shareholders proposed certain modifications to the proposed Arrangement including reducing the proposed dilution of Existing Shareholders so that they would receive 10% (rather than 1%) of the New Shares and certain warrants.
Issue
37The issues to be decided are (i) whether the Arrangement should be approved and the Final Order granted; and (ii) whether the requested sealing Order should be granted.
Analysis
38Section 192(3) of the CBCA provides: “Where it is not practicable for a corporation that is not insolvent to effect a fundamental change in the nature of an arrangement under any other provision of this Act, the corporation may apply to a court for an order approving an arrangement proposed by the corporation.”
39Section 192(4) of the CBCA goes on to provide:
In connection with an application under this section, the court may make any interim or final order it thinks fit including, without limiting the generality of the foregoing,
(a) an order determining the notice to be given to any interested person or dispensing with notice to any person other than the Director;
(b) an order appointing counsel, at the expense of the corporation, to represent the interests of the shareholders;
(c) an order requiring a corporation to call, hold and conduct a meeting of holders of securities or options or rights to acquire securities in such manner as the court directs;
(d) an order permitting a shareholder to dissent under section 190; and
(e) an order approving an arrangement as proposed by the corporation or as amended in any manner the court may direct.
40In order to grant final approval of the CBCA Arrangement, the Court must be satisfied that: (1) there has been compliance with all statutory and court-mandated requirements; (2) the application has been put forward in good faith; and (3) the arrangement is fair and reasonable: see: BCE Inc., Re, 2008 SCC 69 (S.C.C.) [BCE] and Concordia International Corp. (Re) 2018 ONSC 4165 [Concordia] at para 22. The Opposing Shareholders only take issue with step 3 of this test.
41In the context of a debt restructuring, the goal of s. 192 of the CBCA is to “provide a broad procedure aimed at facilitating the restructuring of corporations” and as such the provision ought to be broadly and liberally interpreted: see BCE at paras 124-125, Concordia at para 27 and The Cannabist Company Holdings Inc. et al v. Murchinson Ltd., 2025 ONSC 3004 [Cannabist] at para 39, affirmed Cannabist Company Holdings (Canada) Inc. (Re), 2026 ONCA 120.
Step 1: Has there been Compliance with all Statutory and Court-mandated Requirements?
42In order to satisfy part one of the CBCA arrangement final approval test, the Court must be satisfied that: (i) the applicant is a “corporation” under the CBCA; (ii) the proposed transaction is an “arrangement” under s. 192(1) of the CBCA; (iii) the applicant is not insolvent; and (iv) it is not practicable to effect a fundamental change in the nature of an arrangement under any other provision of the CBCA: see para 24 of Concordia and para 41 of Cannabist.
43This portion of the test is not in dispute and was addressed in connection with the granting of the Preliminary Interim Order and the Interim Order.
44Specifically, as noted by Justice Kimmel in her endorsement in support of the Preliminary Interim Order, “Canadian Courts have held that the solvency requirement under s. 192(3) is satisfied where (a) at least one of the applicant companies is solvent, or (b) where the applicant will be solvent after the arrangement is implemented. See Xplore, at para. 34, citing Concordia, at paras. 33-35; Re Essar Steel Canada Inc., 2014 ONSC 4285, at paras. 36-39; Mobilicity, at para. 53. Following completion of the Recapitalization Transaction, it is expected that the realizable value of Corus Entertainment's assets will not be less than the aggregate value of its liabilities and stated capital, and that the Applicants will not be unable to meet their obligations as they become due. In addition, at the time of the Application to approve the Transaction, it is expected that at least one of the Applicant companies will be solvent because ArrangeCo has no liabilities and is solvent.” Nothing has come to my attention which affects this analysis or any other portion of this first step.
45Further, the meetings were held as required by the Interim Order. At the meetings, the proposed Arrangement received approval of overwhelming majority of over 99% of the Senior Noteholders and holders of Class A Voting Shares who were present and voted. However, only 61.20% of the holders of Class B Non-Voting Shares who were present and voted, voted to approve the Shareholders’ Arrangement Resolution. With respect to the Class B Non-Voting Shares, this approval level fell short of the 66⅔% threshold contemplated under the Interim Order. However, paragraph 41 of the Interim Order permitted the Applicants to return to Court to seek approval of the Arrangement even if the 66⅔% voting thresholder was not met. Further, s. 192 of the CBCA does not require a specific approval threshold in respect of an arrangement, and not all plans are required to be voted on under s. 192 of the CBCA see: Xplore Inc. (Re), 2024 ONSC 4593 at para. 90.
46As well, the Director has also now been provided with notice with respect to the Final Order and the Director has indicated that it does not take a position.
47Accordingly, this portion of the test is satisfied.
Step 2: Has the Arrangement been put forward in Good Faith?
48An Arrangement is put forward in good faith where it is proposed by the Applicants to further a valid business purpose: see Concordia at para 40 and Cannabist at para 46.
49In approving the Interim Order, I found that the Arrangement had been put forward in good faith in that the Recapitalization Transaction has been structured to provide a strong financial footing for the Corus Group's fulfillment of its long-term growth strategy and to maintain going-concern operations for the Company and to achieve a sustainable capital structure for the benefit of the Company and its stakeholders. As well, the Opposing Shareholders do not dispute this valid business purpose.
50Accordingly, this portion of the test is satisfied.
Step 3: Is the Arrangement Fair and Reasonable?
51In assessing the fairness and reasonableness of an arrangement, a Court must be satisfied that (a) the arrangement has a valid business purpose, and (b) the objectives of those whose legal rights are being arranged are being resolved in a fair and balanced way: see BCE, at para 138 and Cannabist at para 49.
52As set out in BCE at para 136, “the court must focus on the terms and impact of the arrangement itself, rather than on the process by which it was reached.” Accordingly, the level of negotiations with the Opposing Shareholders is not a primary focus of the Court in this regard.
53It is also important to note that despite the Opposing Shareholders’ request that the Arrangement be modified to provide Existing Shareholders additional recovery, it is not open to the Court to modify the Arrangement. Rather, the Court is to refrain from substituting its view as to what the ‘best’ arrangement may be, rather, the Court is to scrutinize the proposed arrangement and conduct a careful review of the proposed transactions: see BCE at para 155.
54In this context, an arrangement often involves a compromise on the part of all parties for the greater good and the Court must be careful not to cater to the needs of one particular group, but, rather to consider the overall fairness of any arrangement as well as the fairness to individual stakeholders: see BCE at para 148 and Cannabist at para 51. The level of scrutiny by the Court is related to the degree of necessity of the arrangement. If the arrangement is necessary for the corporation’s continued existence, Courts will be more willing to approve it despite its prejudicial effect on some security holders: see BCE at para 146 and Cannabist at para 53.
55Here, the Opposing Shareholders do not take issue with the necessity of the Arrangement. In their original memorandum of fact and law, the Opposing Shareholders at para 70 note: “The Shareholder Group does not oppose the recapitalization of Corus and fully recognizes the necessity of a debt-for-equity conversion to stabilize the Company's capital structure and preserve it as a going concern.” The unchallenged evidence is that if the Arrangement is not approved, the only viable alternative is that the Company will need to seek creditor protection under the Companies’ Creditors Arrangement Act R.S.C., 1985, c. C-36 as amended (the “CCAA”). Accordingly, given that high level of necessity of the Arrangement to the Company, the degree of scrutiny is lessened.
56As noted in para 58 of Cannabist, as set out in paras 149-152 of BCE, Courts may consider various factors in determining whether a plan is fair and reasonable in light of the need to balance the corporation’s ongoing interests with those of its securityholders (which may include shareholders and debtholders). These factors include: (a) whether a majority of securityholders voted to approve the arrangement; (b) the proportionality of the compromise between various securityholders and their position before and after the arrangement; (c) the repute of the directors and advisors who endorse the arrangement; (d) whether the plan has been approved by an independent committee; and (e) the presence of a fairness opinion.
57In terms of the vote, para 150 of BCE provides “An important factor is whether a majority of security holders has voted to approve the arrangement. Where the majority is absent or slim, doubts may arise as to whether the arrangement is fair and reasonable; however, a large majority suggests the converse. Although the outcome of a vote by security holders is not determinative of whether the plan should receive the approval of the court, courts have placed considerable weight on this factor. Voting results offer a key indication of whether those affected by the plan consider it to be fair and reasonable.”
58Here, the vote on the proposed Arrangement showed approval of an overwhelming majority of the Senior Noteholders and holders of Class A Voting Shares who were present and voted. As well, using the words of BCE, a ‘majority’ of Class B Non-Voting Shares who were present and voted also voted to approve the arrangement – being 61.20%. This is not a case where a majority was not received. It may be that the majority was not as large as hoped for or as was obtained by the Senior Noteholders and Class A Voting Shares, however, I would not describe the majority of the Class B Non-Voting Shares as ‘slim’ or absent.
59In the context of a debt restructuring such as this, in considering the proportionality of the compromise between the various securityholders, and the position before and after the arrangement, the hierarchy of interests recognized by insolvency legislation and jurisprudence informs the fairness and reasonableness evaluation: see Cannabist at para 59 and Concordia at para 34.
60The financial position of the Company, as demonstrated by its financial statements and by the results of the Strategic Review is such that the fulcrum creditors are the lenders under the Company’s Revolving Facility, the Term Loan Facility and holders of the Senior Notes. None of the proposals received in the Sales Process or the Capital Raising Process were of sufficient value to repay those creditors in full. Accordingly, if the Company were to restructure under the CCAA, it is expected that the creditors would not be paid in full. If creditors are not paid in full, a plan under a CCAA cannot provide recovery to equity claims: see s. 8 of the CCAA. As such, when considering the proportionality of compromise of the Existing Shareholders, it is necessary to consider that under the CCAA, which is, according to the evidence, the only viable alternative, Existing Shareholders would receive no recovery.
61In considering the other indicia of fairness, the evidence is that the Recapitalization Transaction is the culmination of an extensive process, overseen by the board of directors of Corus Entertainment (the “Board”) and an independent committee of the Board formed in April 2024 to address the Company’s financial challenges. There is nothing before me which calls into question the repute of the Board or the special committee. As well, the Fairness Opinion obtained also supports the Recapitalization Transaction.
62As noted in BCE at para 155, no arrangement is perfect. However, in considering the circumstances and the indicia of fairness outlined above, I am of the view that the Arrangement is fair and reasonable in the specific circumstances of this case.
63The CBCA Plan and the proposed Final Order include Releases, on the Effective Date, of
a. all Released Claims in respect of the Corus Released Parties (being the Corus Group and each of their respective current and former directors, officers, employees, auditors, financial and other advisors, legal counsel, and agents) and the Debtholder Released Parties (being the Supporting Noteholders, the Indenture Trustees, the Lenders, the Agent, NewCo, and each of their respective principals, members, managed accounts or funds, fund advisors, and current and former directors, officers, employees, auditors, financial and other advisors, legal counsel, and agents) consisting principally of all present and future actions, causes of action, damages, judgments, executions, obligations, liabilities and Claims of any kind or nature whatsoever arising on or prior to the Effective Date in connection with the Support Agreement, the Senior Notes, the Senior Notes Documents, the Credit Documents, the Arrangement, the CBCA Plan, and the CBCA proceedings;
b. all Released Claims in respect of the Shareholder Released Parties consisting principally of all present and future actions, causes of action, damages, judgments, executions, obligations, liabilities and Claims of any kind or nature whatsoever arising on or prior to the Effective Date in connection with the Shareholder Support Agreement, the Arrangement, the CBCA Plan, and the CBCA proceedings, the Corus Entities and their respective businesses and property.
64The CBCA Plan releases do not release any liabilities or claims attributable to any Released Party’s gross negligence, fraud or wilful misconduct.
65In considering whether such releases should be approved in an CBCA proceeding, Courts consider: (a) whether the parties to be released were necessary and essential to the restructuring of the company and have contributed in a tangible and realistic way to the plan; (b) whether the claims to be released were rationally connected to the purpose of the plan and necessary for it; (c) whether the plan could succeed without the releases; (d) whether the release benefitted the company as well as the securityholders generally; and (e) whether those voting on the plan knew of the nature and effect of the releases: See Cannabist at para 77.
66Here, the evidence is that the Released Parties were essential to and extensively involved in the development of the Arrangement and the CBCA Plan and have actively facilitated and materially contributed to advancing the Arrangement. The Debtholder Released Parties agreed to compromise hundreds of millions of dollars of debt, made significant incremental operational funding commitments, and agreed to extend debt maturities, which will place the Company on stronger financial footing. The Initial Supporting Noteholders provided the stability and certainty needed to allow the Company to pursue the Recapitalization Transaction, signal to the market that it had a viable path forward to continue as a going concern, and pursue its ordinary course business activities, including procuring crucial programming content, which has benefitted all stakeholders. As well, the evidence is that the support the Shareholder Released Parties provided at the commencement of these CBCA proceedings has also been crucial to the development of the Arrangement and the stability of the business. Representatives of the Shareholder Released Parties have provided oversight and stewardship to the Corus Group during these CBCA proceedings as members of the Board. Further, as described above, the Shareholder Released Parties agreed to surrender and cancel their Existing Shares for no consideration.
67As well, the Releases provide certainty to the Company and the other Released Parties that there are no residual or surviving claims with respect to obligations that are intended to be addressed pursuant to the CBCA Plan. Further, the Applicants provided notice of the Releases ahead of the Meetings, including through the Circular and no person has appeared to oppose the Releases. In the circumstances, I am satisfied the Releases are appropriate.
68I am also satisfied that waiver of defaults proposed is appropriate in the circumstances as the purpose of such waiver provision is to prevent a collateral attack that would undermine the purpose of the Arrangement through the exercise of rights or remedies relating to matters that are comprehensively addressed under the Arrangement. As noted in para 83 of Cannabist, Courts have exercised their discretion to approve CBCA plans that include waiver provisions.
69The sealing Order requested relates to 5 confidential exhibits being: Confidential Exhibit “A” to the Supplementary Gossling Affidavit which is an unsolicited non-binding preliminary indication of interest received by Corus Entertainment to purchase the business of the Corus Group; Confidential Exhibit “A” to the Matican Affidavit which is a summary and comparison of the two non-binding proposals received by Corus Entertainment in the Sale Process, prepared by Jefferies; Confidential Exhibit “B” to the Matican Affidavit being copies of the proposals themselves; Confidential Exhibit “C” to the Matican Affidavit which is a comparison of the two non-binding proposals received in the Capital Raising Process, prepared by Jefferies; and Confidential Exhibit “D” to the Matican Affidavit being copies of the proposals themselves, as well as a third proposal received for an accounts receivable securitization facility.
70Subsection 137(2) of the Courts of Justice Act provides for the Court’s authority to grant a sealing order. It provides that the Court may order that any document filed in a civil proceeding be treated as confidential, sealed and not part of the public record.
71The Supreme Court of Canada in Sherman Estate v Donovan, 2021 SCC 25, at para. 38 [Sherman Estate], recast the test from Sierra Club of Canada v. Canada (Minister of Finance) 2002 SCC 41:
The test for discretionary limits on presumptive court openness has been expressed as a two-step inquiry involving the necessity and proportionality of the proposed order (Sierra Club, at para. 53). Upon examination, however, this test rests upon three core principles that a person seeking such a limit must show. Recasting the test around these three prerequisites, without altering its essence, helps to clarify the burden on an applicant seeking an exception to the open court principle. In order to succeed, the person asking the court to exercise discretion in a way that limits the open court presumption must establish that:
a. court openness poses a serious risk to an important public interest;
b. the order sought is necessary to prevent this serious risk to the identified interest because reasonably alternative measures will not prevent this risk; and
c. as a matter of proportionality, the benefits of the order outweigh its negative effects.
Only where all of these prerequisites have been met can a discretionary limit on openness - for example, a sealing order, a publication ban, an order excluding the public from the hearing, or a redaction order - properly be ordered. This test applies to all discretionary limits on court openness, subject only to valid legislative enactments (Toronto Star Newspapers Ltd. v. Ontario, 2005 SCC 41, [2005] 2 S.C.R. 188 at paras. 7 and 22).
72It is common that this Court would seal bid information until the closing of a transaction so as not to prejudice value if the proposed transaction does not close and a further marketing process is required. Here, the Applicants request that sealing not be time limited in relation to the closing of the Recapitalization Transaction, however, as the bids were received outside of any insolvency related court process and the bidders submitted their bids on the strength on the Company’s commitment that such information would remain confidential.
73In this respect, as noted by Osborne J. (as he then was) in Hudson’s Bay Company, Re, 2025 ONSC 1897 at para 100: “Further, in Sierra Club (at paras. 59-60), the Supreme Court recognized that the preservation of confidential information constitutes a sufficiently important commercial interest to pass the first branch of the test, provided however that certain criteria were met. The applicant must demonstrate that the information in question has been treated at all relevant times as confidential and that on a balance of probabilities its proprietary, commercial and scientific interest could reasonably be harmed by the disclosure of the information. The information must be of a “confidential nature” in that it has been “accumulated with a reasonable expectation of it being kept confidential” as opposed to “facts which a litigant would like to keep confidential by having the court room doors closed”.
74As such, I am satisfied that the requested sealing order for the confidential exhibits meets the first portion of test in Sherman Estate in that this information was accumulated with a reasonable expectation of it being kept confidential and disclosure of this information would pose a risk to the public interest in that the information in each of the Confidential Exhibits represents confidential, commercially sensitive business information, the disclosure of which would materially prejudice the Company's current business operations as it seeks to implement the Recapitalization Transaction and the go-forward business of the Company following the Recapitalization Transaction.
75In the circumstances, there are no reasonable alternative measures to address the risk as time-limited sealing would not protect the expectation of confidentiality of third parties referenced above.
76With respect to the third branch of the Sherman Estate test, the Opposing Shareholders are the only stakeholder to challenge the sealing order. However, the unchallenged evidence in the public record is that none of the information contained in the Confidential Exhibits shows value for the Company that flows to Existing Shareholders. The Opposing Shareholders had the opportunity to cross examine on the public record and chose not do so. Accordingly, I am satisfied that the benefits of the order outweigh it negative effects.
Disposition
77Order to go in the form signed by me this day with immediate effect.
Justice J. Dietrich
Date: March 24, 2026