Fasken’s Insolvency and Restructuring Group represented the purchaser of SM Group in successfully opposing the appeal to the Supreme Court.
This recent Supreme Court decision explicitly clarifies once and for all the issue of “pre-post compensation” in the context of a restructuring under the CCAA. Although the Supreme Court opens the door for a supervising judge to exercise discretion in authorizing “pre-post compensation,” it is expected that this opening will be very narrow and limited to highly exceptional situations.
This case also gave the Supreme Court the opportunity to analyze the provisions of Bill 26 and its regulations for the first time. It allowed the nation’s highest court to clarify the burden of proof on public bodies when they attempt to establish the fraudulent nature of a claim arising from an agreement under the VRP. Individuals or companies that have entered into a VRP settlement will therefore be relieved to know that their mere participation in the VRP will not create a presumption of admission that they have committed a fraudulent act. Public bodies will need to effectively prove that VRP participants knowingly made false representations that led to VRP claims.
The Fasken team was composed of Luc Béliveau, Marc-André Morin, Nicolas Mancini, Éliane Dupéré-Tremblay.