In Canacol Energy Ltd. (Re) (“Canacol”), the Court of King’s Bench of Alberta (the “Court”) considered the proper scope of an order approving a monitor’s report and activities where the report addressed allegations that remained disputed and could be advanced in related Colombian proceedings.[1] The Court confirmed that interim approvals serve important purposes in insolvency proceedings, but cautioned that approval should not inadvertently determine—or appear to determine—issues that have not been adjudicated.
The decision is a practical reminder that approval of a court officer’s conduct is not the same as judicial acceptance of every factual statement, opinion, or characterization in the officer’s report. Where a report touches a live dispute—particularly one being pursued in another jurisdiction—the approval language should protect the court officer while expressly preserving the parties’ substantive positions.
Background Facts
The Canacol Group, a Calgary-based natural gas producer with significant operations in Colombia, obtained protection under the Companies’ Creditors Arrangement Act (Canada) on November 18, 2025.[2] KPMG Inc. was appointed Monitor and authorized to act as Foreign Representative in recognition proceedings in the United States and Colombia.
Following the June 24, 2026 decision permitting the Canacol Group to disclaim certain natural gas supply contracts, a dispute arose in Colombia involving Cerro Matoso S.A. (“Cerro Matoso”), a major gas customer, and CoreX Energy SAS ESP (“CoreX”), an intermediary that purchased gas from the Canacol Group for resale to Cerro Matoso.[3] Cerro Matoso alleged that the Canacol Group had discriminatorily reduced gas deliveries and sought regulatory intervention from Colombia's Superintendency of Public Utilities, including a potential administrative takeover of the Canacol Group's Colombian operations. CoreX supported Cerro Matoso's position.[4]
Acting as Foreign Representative, the Monitor responded to the Colombian regulator, provided the Disclaimer Decision, and stated its view that the allegations of undue or discriminatory restrictions or reductions in gas supply were not supported by the facts. The Monitor summarized that correspondence and its related activities in its Ninth Report. When the Canacol Group sought approval of the Ninth Report and the Monitor’s activities, CoreX objected—not on the basis that the Monitor had acted improperly, but because an unqualified approval order might later be presented in Colombia as judicial endorsement of disputed allegations that the Alberta Court had not adjudicated.
The issue was therefore not whether the Monitor’s activities should be approved in the ordinary course, but how the approval order should be framed so that it did not prejudice the parties’ positions on matters that remained unresolved.
The Decision
The Court applied the principles in Target Canada Co. (Re), recognizing that approval orders promote transparency and accountability, permit stakeholders to raise concerns, and provide court officers with protection in carrying out their mandates.[5] At the same time, a generalized approval is not intended to adjudicate substantive rights or convert every statement in a report into a judicial finding.
The Court also relied on the Alberta Court of Appeal’s reasoning in AutoCanada Capital Motors GP Inc. v 2016543 Alberta Ltd.: a court officer should not obtain, through approval of a report, the practical equivalent of a determination of a disputed issue without a proper adjudicative process. The concern is not limited to formal issue estoppel.[6] Even if an approval order is not legally dispositive, it may still be deployed for persuasive or strategic effect in another proceeding.
The Court approved the Ninth Report and the Monitor’s conduct, noting that no party alleged misconduct by the Monitor. However, it supplemented the standard Target Canada qualification with language confirming that the approval did not determine the truth of the disputed allegations or prejudice the parties’ positions in relation to them. That tailored qualification was especially important because the report and approval order could be placed before Colombian courts, regulators, or administrative authorities.
Implications and Key Takeaways
Approval protects conduct; it does not prove the report. An order approving a monitor’s activities should not be read as adopting every factual assertion, opinion, or characterization in the underlying report.
Live disputes should be identified expressly. Monitors and applicants should flag portions of a report that address contested matters and propose language preserving the affected parties’ positions. Objecting stakeholders should identify the specific prejudice said to arise from an unqualified order.
Substantive determinations require a substantive process. If a party seeks a binding determination of an issue discussed in a monitor’s report, the application materials should say so clearly and provide affected parties with a fair opportunity to respond. Routine activity-approval relief is not a substitute for that process.
Cross-border use matters. Courts should consider not only the intended domestic effect of an approval order, but also how the order may be characterized, translated, or relied upon before a foreign court, regulator, or administrative body. Tailored reservation language can preserve comity while reducing the risk of unintended collateral consequences.
Fasken’s Robyn Gurofsky acted as representative counsel for Petromil Gas S.A.S. E.S.P. in this matter.
The views and opinions expressed in this article belong to the authors and should not be relied upon as a substitute for independent legal advice. Should you wish to discuss the particular circumstances of a case further, any one of the members of Fasken’s Insolvency and Restructuring Team would be happy to do so with you.
