In Case you Missed it: Decisions on our Radar

Rebuilding Success Magazine Features - Spring/Summer 2026 > In Case you Missed it: Decisions on our Radar

In Case you Missed it: Decisions on our Radar

March 6, 2026

The financial restructuring and litigation groups at Davies Ward Phillips & Vineberg LLP are tracking the following cases. We have briefly described issues and updates for each case relevant to the CAIRP membership. Unless otherwise noted, the information in the chart is current to January 22, 2026—more recent developments in each case are not reflected.

By Natasha MacParland, Partner; Rui Gao, Partner; and Sean Monahan, Associate, Davies Ward Phillips & Vineberg LLP¹

The blue shading of cells denotes new cases we have been tracking since the last issue of Rebuilding Success; the blue font denotes updates to cases described in a previous issue.

Case	Issue	Update
Autorité des marchés financiers v. Valeo Pharma inc. (Québec) 2024 QCCS 3636 2024 QCCA 1741 (granting leave to appeal) 2025 QCCA 103 (granting the Ontario Securities Commission leave to intervene)	Does a CCAA Court have jurisdiction to exempt a reporting issuer from continuous disclosure obligations and other requirements under provincial securities law?	Yes (subject to appeal). Valeo Pharma Inc. (“Valeo”) was a reporting issuer in Ontario and filed for CCAA protection. In issuing the Initial Order, and subsequently, the Amended and Restated Initial Order, the Québec Superior Court granted exemptions from continuous disclosure obligations and audit committee requirements to Valeo and its affiliates. The Autorité des marchés financiers (“AMF”), the Québec securities regulator, was granted leave to appeal to the Québec Court of Appeal. The AMF challenges the validity of the exemptions, arguing that they: infringe on its exclusive jurisdiction and authority to regulate reporting issuers and protect investors; and are contrary to the public interest and the objectives of the CCAA. The AMF contends that the Québec Superior Court erred in applying the doctrine of federal paramountcy to override provincial securities laws. The Ontario Securities Commission and Insolvency Institute of Canada were granted leave to intervene in the appeal, which was heard on October 29, 2025. As of January 22, 2026 a decision has not been released by the Québec Court of Appeal.
Attorney General of Canada c. Valeo Pharma inc. (Québec) 2025 QCCS 580 2025 QCCA 483 (granting the Attorney General of Canada leave to appeal) 2025 QCCA 969 (granting leave to intervene to the Insolvency Institute of Canada)	Does transferring non-retained employees to a shell company for the purpose of terminating their employment and enabling them to claim WEPPA benefits constitute an abuse or circumvention of the WEPPA regime?	No (subject to appeal). In a separate action regarding the Valeo restructuring, through a court-supervised restructuring transaction, Valeo sought to retain 36 of its 60 employees, while the remaining 24 would have their salary and vacation benefits paid before being transferred to a shell company (“ResidualCo”), which would then terminate their employment. Applications would then be made for these terminated employees to receive benefits under the federal Wage Earner Protection Program Act (“WEPPA”). The Attorney General of Canada objected, arguing that the transfer to ResidualCo was a legal fiction to allow employees to claim WEPPA benefits in a manner inconsistent with the program’s intent. The Québec Superior Court rejected these arguments and approved the transaction. The Attorney General then sought, and was granted, leave to appeal to the Québec Court of Appeal, arguing that the lower court’s interpretation of WEPPA was contrary to the statute’s wording and objectives. The Insolvency Institute of Canada was granted leave to intervene in the appeal, which was heard September 30, 2025. As of January 22, 2026 a decision has not been released by the Québec Court of Appeal.
Invico Diversified Income Limited Partnership v. NewGrange Energy Inc. (Alberta) 2024 ABKB 214 2024 ABCA 244 (granting leave to appeal) 2025 ABCA 392	Are gross overriding royalties (“GORs”) interests in land that cannot be “vested out”, (i.e., removed from title) in a Reverse Vesting Order (an “RVO”)?	In this case, no, although the analysis is fact-specific. GORs can constitute an interest which “runs with the land” or they can simply be a contractual interest. In this case, the Court of King’s Bench of Alberta found that the GORs were not interests in land and therefore could be vested out in an RVO. The Court declined to consider whether, if the GORs were interests in land, they could still be vested out in an RVO. In determining the royalty interests did not “run with the land”, the Court examined the intentions of the parties. Despite language in the royalty agreement purporting to create an interest in the land, the language in the royalty assignment clause and the surrounding factual circumstances indicated otherwise. NewGrange Energy Inc. (the holder of the GORs) sought and was granted leave to appeal. On November 25, 2025, the Alberta Court of Appeal dismissed the appeal and made several findings, including: The assignment clause was inconsistent with an interest in land since the clause contemplated situations in which the original royalty payor would remain liable to pay the royalty even if it no longer held an interest in the land. This case is distinguishable from other cases in which a similar assignment clause did not defeat a finding of an interest in land since the factual context is different. Even if the parties had intended to create an interest in land, the gross overriding royalty was created before the royalty grantor acquired an interest in the land and a grantor cannot convey what it does not have. As of January 22, 2026, leave to appeal to the Supreme Court of Canada has not been sought.
Cleo Energy Corp. (Re) (Alberta) 2025 ABKB 621	Is purchaser preference enough to justify the necessity of an RVO?	In this case, no. The Receiver’s assertions about material risk, delay, and cost of licence transfers were unsubstantiated by specific, cogent evidence. Further, the Receiver’s application did not prove why the sale could not be completed through a plan of arrangement and what corporate attributes could only be preserved through an RVO. A purchaser’s preference for an RVO is not enough to justify its necessity. As a result, the Court rejected the Receiver’s application for an RVO. The Court also considered if an RVO can be used to retain Crown mineral leases while shedding pre-filing cure costs, and whether Court approval of the RVO would risk clawbacks under the Wage Earner Protection Program (“WEPP”). On pre-filing cure costs, the Court held that, if a Receiver retains an executory contract (in this case, Crown mineral leases), monetary defaults must also be cured. In other words, if a Receiver decides to keep a contract, it must keep both the benefits and burdens of that contract. On potential WEPP clawbacks, Employment Canada had argued that, since the restructured company would emerge from receivership via the proposed RVO, this might subject employees to potential WEPP payment clawbacks. The Court rejected the notion that RVO approval should trigger any WEPP clawbacks, since WEPP entitlement is assessed at employment termination and is not altered by later transaction structuring. As a result, clawbacks in such circumstances would be inappropriate. As of January 22, 2026, leave to appeal to the Alberta Court of Appeal has not been sought.
Arrangement relatif à 7037163 Canada inc. (and Varennes Cellulosic Ethanol LP) (Québec) 2025 QCCS 4498 2025 QCCA 1560 (granting leave to appeal)	What are the limits of judicial discretion in granting third-party releases in the context of a proposed RVO?	The CCAA parties sought approval of an RVO and a separate Release Order that included broad third-party releases. Unsecured creditors objected to both the RVO and the scope of the proposed releases. The RVO was opposed on the basis that the structure risked inadequate protection of a creditor’s intellectual property embedded in retained equipment. The Québec Superior Court resolved this by requiring the purchaser to provide an undertaking recorded in the court minutes as a condition of the RVO’s approval. In evaluating the Release Order, the Court emphasized that broad releases should not be automatic, nor third-party releases commonplace, and the evaluating court must consider the contribution of the benefitting parties to the restructuring process. The Court found that the proposed releasees were “instrumental” in the restructuring - remaining engaged in preserving the project and carrying it through the SISP - even though many did not benefit from the KERP. Importantly, the releases were not a condition precedent in the purchase agreement and the Release Order was segregated so that the Court would retain discretion to modify it in light of creditor concerns. In providing its approval, the Court amended the proposed release order to add a carve out for claims that (a) relate to contractual rights of one or more creditors; or (b) are based on allegations of misrepresentations made by directors to creditors or of wrongful or oppressive conduct by directors. However, the Court declined to comment on whether the claims of the contesting creditors would fall within this exception. Leave to appeal to the Québec Court of Appeal was granted on December 1, 2025.
HealthHub Patient Engagement Solutions Inc. (Re) (Nova Scotia) Monitor’s Website	Whether a ResidualCo can be “deemed” by the Court to be the former employer of certain employees for the purpose of enabling WEPP claims?	Yes (subject to appeal). On December 19, 2025, the Supreme Court of Nova Scotia approved an RVO that “deemed” the ResidualCo to be the former employer of certain employees for the purposes of termination pay and severance pay pursuant to WEPPA. This order would permit such employees to apply for WEPP immediately following the closing of the RVO. On December 29, 2025, the Attorney General of Canada, on behalf of Service Canada (who administers WEPP) filed a notice of appeal to the Nova Scotia Court of Appeal arguing that the judge exceeded the Court’s jurisdiction by creating alternate facts by “deeming” the ResidualCo to be the former employer of the terminated employees and then treating it as meeting WEPP criteria, which is contrary to the statute and its purpose.
Cameron Stephens Mortgage Capital Ltd. v. Conacher Kingston Holdings Inc. (Ontario) 2025 ONCA 732 Endorsement 1 Endorsement 2	Can the Court re-open a bidding process to consider a late, but substantially higher offer, instead of approving the Receiver’s accepted agreement with the appellant?	Yes. A Receiver was appointed over a Toronto property, and after an extensive marketing process, the Receiver accepted the appellant’s offer, subject only to court approval. The day before the Sale Approval hearing, a related party of the Debtor tabled offers 6.7% and 14% higher than the appellant’s offer. The motion judge adjourned the matter because of this late activity. Before the adjourned return, the related party submitted a third offer, 37% higher than the appellant’s offer. At the Sale Approval hearing, the Receiver continued to support the appellant’s offer but recognized that, given the percentage increase of the third offer, which it disclosed to the Court, the Court could order a further auction process. The motion judge declined to approve the sale and ordered a six‑day re‑opened auction among the bidders, with a condition that the related party reimburse the appellant’s reasonable legal costs if the appellant did not prevail. The original bidder appealed the decision to the Ontario Court of Appeal. On appeal, the Court upheld the lower court’s decision to re-open the bidding process. It noted that the magnitude of the late offer (37% higher) justified re-opening the auction to ensure creditors received the best value. As a result, the Court extended the auction process by 48-hours to allow the bidders additional time to submit offers. The Court also held that the Receiver did not breach confidentiality by disclosing the percentage differences between the bids to the Court. The Receivership Order explicitly provided that the Receiver had discretion to disclose information regarding the property and the receivership, and disclosing the percentage differences between the offers to the Court was reasonable to allow the Court to determine whether to re-open the bidding process. As of January 22, 2026, leave to appeal to the Supreme Court of Canada has not been filed.
Creative Wealth Media Finance Corp. et al. (Ontario) 2025 ONSC 4326 Order Appointing Receiver	May a Trustee use estate funds to pay its fees and disbursements, even though such funds may constitute trust funds or otherwise be funds that are subject to the claims of secured creditors?	Yes. The Ontario Superior Court of Justice exercised its inherent jurisdiction under the BIA to order that the Trustee’s fees and disbursements relating to the administration, preservation, and recovery efforts both incurred to date and on a go-forward basis may be paid from the estate funds held by the Trustee, notwithstanding that the estate funds are subject to unresolved trust claims and claims of secured creditors. Prior to its bankruptcy, the Debtor had raised money through investor participation agreements and secured loan arrangements, which led to a complex creditor matrix with both trust and secured claims. The Trustee had received 200 proofs of claim totalling about $264.7 million and needed clarity from the Court on whether it could draw on estate funds to administer and resolve these claims. The Court noted that, the BIA does not exhaustively resolve situations where funds are arguably trust property or subject to secured claims before those claims are adjudicated. Additionally, given the number and complexity of potential trust and secured claims in this instance, the Trustee was uniquely situated to maximize recoveries for all claimants and paying the Trustee’s reasonable fees and disbursements was necessary for it to carry out that work. In making its decision, the Court noted that the Trustee’s motion material were widely served, including on all persons who had filed a proof of claim, and the various creditors of the Debtor. This comprehensive service, combined with the fact that the Trustee’s motion was unopposed, further supported the Court’s decision. On August 8, 2025, the Trustee was appointed as the Receiver of the Debtor.
ATB Financial v. Mayfield Investments Ltd. (Alberta) 2025 ABKB 61	Can a forced share sale provision in a unanimous shareholders agreement be voided under the anti-deprivation rule?	Yes. The Court of King’s Bench of Alberta found that a forced share sale provision in a unanimous shareholders agreement was void and unenforceable under the anti-deprivation rule as the provision allowed the other shareholders to purchase the shares of a shareholder who entered receivership at a 25% discount. The anti-deprivation rule invalidates contractual provisions that, upon insolvency, remove value from the insolvent person’s estate that would otherwise be available to creditors. The Court emphasized that the purpose of the forced sale provision and the parties’ intentions were irrelevant because the anti-deprivation rule is effects-based and only requires: that the forced share sale provision was triggered by an insolvency event (in this instance, the receivership of the debtor); and that the effect of the provision removes value from the estate (here, the provision would allow the other shareholders to purchase the shares at a significant discount). The shareholders tried to tie the triggering event to an enforcement letter rather than the receivership. While the Court agreed that if the trigger was not an insolvency event, it might not engage the anti-deprivation rule, it found that on the facts the receivership was the triggering event. As a result, the Court granted the Receiver’s application for a declaration that the provision was void and unenforceable. It authorized the Receiver to market and sell the shares as part of the SISP and dismissed the shareholders’ application to compel the sale and lift the stay. A notice of appeal was filed with the Alberta Court of Appeal on February 7, 2025 but the application was subsequently discontinued.
Angus A2A GP Inc. v. Alvarez & Marsal Canada Inc. (Alberta) 2024 ABKB 769 2025 ABKB 51 2025 ABCA 147 (granting leave to appeal in part)	Can equity investors initiate CCAA proceedings against a group of affiliated cross-border entities?	Yes (subject to appeal). A group of Canadian investors in real estate projects in Ontario and Texas discovered the Ontario project was being sold without their consent so they commenced CCAA proceedings in Alberta to stop the sale and have a Monitor appointed. The Court granted a temporary order halting the sale and appointed a Monitor, with the order later recognized in the US. The project entities, including Texas LLCs, challenged the orders, arguing improper process and lack of jurisdiction. The Alberta Court of Appeal granted leave to appeal on the following two questions: 1. Was the CCAA properly used by the investors? 2. Are the Texas-based entities subject to the CCAA? This appeal was heard on September 8, 2025. As of January 22, 2026, a decision has not been released.
RPG Receivables Purchase Group Inc. v. American Pacific Corporation (Ontario) 2025 ONCA 371 SCC Case No. 41937	Were payments made by an insolvent company to its major supplier void as preferences when the Debtor claims they were justified by the intention to stay in business?	Yes (subject to leave to appeal). Specialty Chemical Industries Inc. (“Specialty”) paid USD $400,000 to one of its major suppliers, American Pacific Corporation (“AmPac”), one month before assigning itself into bankruptcy. Specialty’s trustee in bankruptcy was unsuccessful in its claim to recover the amounts from AmPac and assigned its right of action to a creditor under section 38 of the BIA. The lower court found that Specialty made the payments to keep its only customer and stay in business, which rebutted the presumption of a preference. The Ontario Court of Appeal disagreed, finding no objective evidence that the payments would actually save Specialty’s business, and noted that the quantum of the payments was much greater than any benefit Specialty might have received. It therefore found the payments were void as preferences and must be repaid by AmPac. AmPac filed an application for leave to appeal to the Supreme Court of Canada on August 14, 2025.
Spartan Delta Corp. v. Alberta (Energy and Minerals) (Alberta) 2025 ABCA 181 (granting leave to appeal)	Does a court-approved CCAA Approval and Vesting Order prevent a creditor from claiming pre-filing royalty arrears from solvent co-lessee third parties?	Yes (subject to appeal). The chambers judge found that the creditor’s claims for pre-filing royalty arrears against the co-lessees were barred for three reasons: the clear terms of the Vesting Order prevented such claims; allowing the creditor to pursue these claims would undermine the integrity and finality of the insolvency process, which is designed to centralize and resolve all claims against the debtor; and the relevant statute (the Mines and Minerals Act) did not provide a basis for the creditor to pursue these claims after the Vesting Order. The Alberta Court of Appeal granted leave to appeal, recognizing that the issue is significant for both insolvency and energy law practice. As of January 22, 2026, a decision from the Alberta Court of Appeal has not been released.
Laliberté v. Québec Revenue Agency (British Columbia) 2025 BCCA 406 SCC Case No. 42181	Did the CCAA stay of proceedings bar Québec penal proceedings against the operating mind of the Debtor such that his conviction should be set aside?	No (subject to leave to appeal). Laliberté sought leave to appeal an order dismissing an application to set aside a penal conviction under the Québec Tax Administration Act. He argued that the penal conviction was contrary to a stay order issued by the Supreme Court of British Columbia in the context of a CCAA proceeding. The British Columbia Court of Appeal dismissed the application for leave to appeal for several reasons. Among other things, the Court of Appeal held that a CCAA stay does not extend to penal or criminal proceedings and only applied to civil actions. Section 11.1 of the CCAA expressly preserves the ability of public prosecutors to continue criminal/penal enforcement. Moreover, different entities were involved in the Québec penal case and the CCAA proceeding. The ARIO stayed proceedings against the CCAA petitioners and their directors only in respect of obligations of the CCAA petitioners – it did not provide a blanket shield from penal liability tied to different companies. Laliberté filed an application for leave to appeal to the Supreme Court of Canada on January 12, 2026.
Dematic Limited c. Atallah Group Inc. (Québec) 2025 QCCS 4430 2025 QCCA 1649 (granting leave to appeal)	Does a debtor have an obligation to disclose its impending insolvency in negotiations to settle a contractual dispute?	No (subject to appeal). On these facts, the duty of good faith under the Civil Code of Québec did not require the Debtor to disclose its impending insolvency during settlement negotiations. The Debtor got into a dispute with a key supplier and settlement discussions took place over several months. Several hours after a settlement was allegedly agreed to, a CCAA application was filed by the debtor’s creditors. When the Debtor applied to the CCAA Court to have the settlement approved, the supplier opposed, arguing that no binding settlement existed, or alternatively, that its consent was vitiated by the debtor’s fraudulent concealment of its insolvency and bad faith. The Court granted the application and found that approval was appropriate relief under the circumstances but that neither execution of the transaction - which would have required, among other things, the immediate payment of $10 million - nor provisional execution of the judgment was necessary. In its reasons, the Court recognized that under the Civil Code of Québec there is a contractual duty of good faith “exists at all stages of a contractual relationship” and can give rise to a duty to inform in certain circumstances. The Court held that there is no general duty for contractual counterparties to disclose their financial difficulties and recognized that such disclosure could make it very difficult for an insolvent party to enter contracts or settle contractual disputes. Leave to appeal to the Québec Court of Appeal was granted on December 19, 2025.
YG Limited Partnership and YSL Residences Inc. (Re) (Ontario) 2024 ONSC 1617 2025 ONCA 591 SCC Case No. 42039	Is a claim made under a profit sharing agreement a provable claim under the BIA as it sounds in equity rather than debt?	No (subject to leave to appeal). A former employee of the debtor appealed the decision of the Trustee that disallowed her profit-sharing claim on the basis that: (i) it was a claim in the nature of equity rather than debt, and (ii) that was too contingent and remote. The lower court allowed the employee’s appeal, finding that the profit-sharing claim was not a claim in equity, but is instead a claim for unliquidated damages for breach of her employment contract, and that her claim was not contingent or too remote. The Trustee appealed the lower court’s decisions to the Ontario Court of Appeal. In dismissing the appeal, the Ontario Court of Appeal stated that: the definition of “equity claim” under the BIA is meant to be exhaustive and identifies the types of claims that may arise from an equity interest; and the origin of an equity claim is to be limited to an ownership interest in a corporation. Applying this framework, the Court rejected the Trustee’s submission that a profit‑sharing entitlement tied to project performance is “in substance” a claim in the nature of equity, not debt. The Court found that the employee held no shares or partnership units and her claim arose from a contractual term of employment, not from any ownership interest. Tying the quantum to employer performance (profits net of certain expenses, including LP repayments) does not convert a contractual obligation into an equity claim. The Court cautioned that characterization of a claim under the BIA should not be results‑driven and that concerns about perceived unfairness in insolvency priority cannot override the statutory definitions. An application for leave to appeal to the Supreme Court of Canada was filed on October 14, 2025.
Mohawk Council of Kanesatake v. Sylvestre (Québec) 2022 QCCS 3332 2023 QCCA 1603 2025 SCC 30	Is filing and serving a notice of execution sufficient to interrupt the 10-year prescription period for the enforcement of judgments?	Yes. After the Mohawk Council of Kanesatake failed to pay the respondents for their professional services, the respondents obtained default judgments against them. The respondents filed and served a notice of execution to seize movable property, but the bailiff determined the property was exempt from seizure under s. 89 of the Indian Act and no seizure was carried out. Under Québec law, a prescription period limits a creditors’ right to payment for the enforcement of a judgment – if the creditor takes action to exercise its right within the prescription period, prescription is interrupted and the prescription period restarts. On this basis the Council sought a declaration that the respondents’ rights under the judgments had prescribed because the unsuccessful seizure attempt did not interrupt the prescription period. All three levels of the court involved in this dispute disagreed. The Supreme Court of Canada held that the filing and service of a notice of execution interrupts prescription even if the subsequent seizure is unsuccessful because: Interpretations of the rules on interruption of prescription must be understood as a “seamless web” that recognizes that a purpose of the modern law of limitation is that of creditor diligence. The notice of execution is a procedural act that is “part and parcel” of the seizure as a judicial application and indicates that the creditor intends to make good on their claim. This action is representative of the creditor’s diligence and service of the notice on the debtor interrupts the prescription period. The fact a seizure was unsuccessful does not retroactively strip the notice of this interruptive effect. Exemptions from seizure may limit enforcement prospects but do not compromise the existence of the debt itself.
Milot Law v. Sittler (Alberta) 2025 ABCA 72 SCC Case No. 41784	Did the Debtor’s former lawyer (and now creditor) breach solicitor-client privilege or confidentiality by disclosing to the Bankruptcy Trustee information and records obtained during pre-bankruptcy tax litigation?	No. The Debtors hired Milot Law to represent them in a tax litigation matter. Later, when the Debtors assigned themselves into bankruptcy, Milot Law became one of their creditors for its unpaid legal fees. After reviewing the Statement of Affairs prepared by the Trustee, based on information obtained while representing the Debtors, Milot Law became aware that the Debtors had not disclosed all their assets to the Trustee. After requesting that the Debtors voluntarily disclose the missing information, and consulting with a practice advisor, Milot Law provided the Trustee with the previously undisclosed records, in redacted form. The lower court found that Milot Law’s actions did not breach privilege. The Debtors appealed the decision and sought a declaration that no party in the bankruptcy proceeding may rely on the information disclosed to the Trustee by Milot Law. On February 28, 2025, the Alberta Court of Appeal dismissed the debtors’ appeal. The Court stated that the financial records and business documentation provided to Milot Law were not privileged since they were not created for the specific purpose of seeking legal advice. Therefore, Milot Law did not breach its duties of privilege and/or confidentiality. On April 28, 2025, the Debtors filed an application for leave to appeal to the Supreme Court of Canada. On October 9, 2025, the application for leave to appeal was dismissed.
Easy Legal Finance Inc. v. Law Society of Alberta (Alberta) 2024 ABKB 410 2025 ABCA 112	Should the “interest stops rule” stop interest from accruing on a secured creditor’s claim during a receivership?	No. The Alberta Court of Appeal held that the rule should not be extended in this manner. The “interest stops rule” is a well-established principle in insolvency law that says that interest on debts stops accruing from the date of bankruptcy or insolvency proceedings. This rule is meant to ensure fairness among unsecured creditors, so that those with interest-bearing debts do not receive a greater portion of the estate than those with non-interest-bearing debts. In this case, the Law Society of Alberta and others wanted the interest stops rule to apply to a secured creditor, Easy Legal Finance Inc., who was owed over $1.4 million with interest at 18% per year. They argued that it was inequitable for the secured creditor to receive an ever-increasing portion of the estate. The Alberta Court of Appeal disagreed and held that the interest stops rule has never applied to secured creditors in a receivership and there is no legal basis to expand it. The rule remains limited to unsecured creditors. Secured creditors can continue to accrue interest on their claims during a receivership. The time period for seeking leave to appeal to the Supreme Court of Canada has lapsed. Leave was not sought.

Case

Issue

Update

Autorité des marchés financiers v. Valeo Pharma inc.

(Québec)

2024 QCCS 3636

2024 QCCA 1741 (granting leave to appeal)

2025 QCCA 103 (granting the Ontario Securities Commission leave to intervene)

Does a CCAA Court have jurisdiction to exempt a reporting issuer from continuous disclosure obligations and other requirements under provincial securities law?

Yes (subject to appeal).

Valeo Pharma Inc. (“Valeo”) was a reporting issuer in Ontario and filed for CCAA protection. In issuing the Initial Order, and subsequently, the Amended and Restated Initial Order, the Québec Superior Court granted exemptions from continuous disclosure obligations and audit committee requirements to Valeo and its affiliates.

The Autorité des marchés financiers (“AMF”), the Québec securities regulator, was granted leave to appeal to the Québec Court of Appeal. The AMF challenges the validity of the exemptions, arguing that they:

infringe on its exclusive jurisdiction and authority to regulate reporting issuers and protect investors; and
are contrary to the public interest and the objectives of the CCAA.

The AMF contends that the Québec Superior Court erred in applying the doctrine of federal paramountcy to override provincial securities laws.

The Ontario Securities Commission and Insolvency Institute of Canada were granted leave to intervene in the appeal, which was heard on October 29, 2025. As of January 22, 2026 a decision has not been released by the Québec Court of Appeal.

Attorney General of Canada c. Valeo Pharma inc.

(Québec)

2025 QCCS 580

2025 QCCA 483 (granting the Attorney General of Canada leave to appeal)

2025 QCCA 969 (granting leave to intervene to the Insolvency Institute of Canada)

Does transferring non-retained employees to a shell company for the purpose of terminating their employment and enabling them to claim WEPPA benefits constitute an abuse or circumvention of the WEPPA regime?

No (subject to appeal).

In a separate action regarding the Valeo restructuring, through a court-supervised restructuring transaction, Valeo sought to retain 36 of its 60 employees, while the remaining 24 would have their salary and vacation benefits paid before being transferred to a shell company (“ResidualCo”), which would then terminate their employment. Applications would then be made for these terminated employees to receive benefits under the federal Wage Earner Protection Program Act (“WEPPA”).

The Attorney General of Canada objected, arguing that the transfer to ResidualCo was a legal fiction to allow employees to claim WEPPA benefits in a manner inconsistent with the program’s intent. The Québec Superior Court rejected these arguments and approved the transaction.

The Attorney General then sought, and was granted, leave to appeal to the Québec Court of Appeal, arguing that the lower court’s interpretation of WEPPA was contrary to the statute’s wording and objectives.

The Insolvency Institute of Canada was granted leave to intervene in the appeal, which was heard September 30, 2025. As of January 22, 2026 a decision has not been released by the Québec Court of Appeal.

Invico Diversified Income Limited Partnership v. NewGrange Energy Inc.

(Alberta)

2024 ABKB 214

2024 ABCA 244 (granting leave to appeal)

2025 ABCA 392

Are gross overriding royalties (“GORs”) interests in land that cannot be “vested out”, (i.e., removed from title) in a Reverse Vesting Order (an “RVO”)?

In this case, no, although the analysis is fact-specific. GORs can constitute an interest which “runs with the land” or they can simply be a contractual interest.

In this case, the Court of King’s Bench of Alberta found that the GORs were not interests in land and therefore could be vested out in an RVO. The Court declined to consider whether, if the GORs were interests in land, they could still be vested out in an RVO.

In determining the royalty interests did not “run with the land”, the Court examined the intentions of the parties. Despite language in the royalty agreement purporting to create an interest in the land, the language in the royalty assignment clause and the surrounding factual circumstances indicated otherwise.

NewGrange Energy Inc. (the holder of the GORs) sought and was granted leave to appeal. On November 25, 2025, the Alberta Court of Appeal dismissed the appeal and made several findings, including:

The assignment clause was inconsistent with an interest in land since the clause contemplated situations in which the original royalty payor would remain liable to pay the royalty even if it no longer held an interest in the land.
This case is distinguishable from other cases in which a similar assignment clause did not defeat a finding of an interest in land since the factual context is different.
Even if the parties had intended to create an interest in land, the gross overriding royalty was created before the royalty grantor acquired an interest in the land and a grantor cannot convey what it does not have.

As of January 22, 2026, leave to appeal to the Supreme Court of Canada has not been sought.

Cleo Energy Corp. (Re)

(Alberta)

2025 ABKB 621

Is purchaser preference enough to justify the necessity of an RVO?

In this case, no.

The Receiver’s assertions about material risk, delay, and cost of licence transfers were unsubstantiated by specific, cogent evidence. Further, the Receiver’s application did not prove why the sale could not be completed through a plan of arrangement and what corporate attributes could only be preserved through an RVO. A purchaser’s preference for an RVO is not enough to justify its necessity. As a result, the Court rejected the Receiver’s application for an RVO.

The Court also considered if an RVO can be used to retain Crown mineral leases while shedding pre-filing cure costs, and whether Court approval of the RVO would risk clawbacks under the Wage Earner Protection Program (“WEPP”).

On pre-filing cure costs, the Court held that, if a Receiver retains an executory contract (in this case, Crown mineral leases), monetary defaults must also be cured. In other words, if a Receiver decides to keep a contract, it must keep both the benefits and burdens of that contract.

On potential WEPP clawbacks, Employment Canada had argued that, since the restructured company would emerge from receivership via the proposed RVO, this might subject employees to potential WEPP payment clawbacks. The Court rejected the notion that RVO approval should trigger any WEPP clawbacks, since WEPP entitlement is assessed at employment termination and is not altered by later transaction structuring. As a result, clawbacks in such circumstances would be inappropriate.

As of January 22, 2026, leave to appeal to the Alberta Court of Appeal has not been sought.

Arrangement relatif à 7037163 Canada inc. (and Varennes Cellulosic Ethanol LP)

(Québec)

2025 QCCS 4498

2025 QCCA 1560 (granting leave to appeal)

What are the limits of judicial discretion in granting third-party releases in the context of a proposed RVO?

The CCAA parties sought approval of an RVO and a separate Release Order that included broad third-party releases. Unsecured creditors objected to both the RVO and the scope of the proposed releases.

The RVO was opposed on the basis that the structure risked inadequate protection of a creditor’s intellectual property embedded in retained equipment. The Québec Superior Court resolved this by requiring the purchaser to provide an undertaking recorded in the court minutes as a condition of the RVO’s approval.

In evaluating the Release Order, the Court emphasized that broad releases should not be automatic, nor third-party releases commonplace, and the evaluating court must consider the contribution of the benefitting parties to the restructuring process. The Court found that the proposed releasees were “instrumental” in the restructuring - remaining engaged in preserving the project and carrying it through the SISP - even though many did not benefit from the KERP.

Importantly, the releases were not a condition precedent in the purchase agreement and the Release Order was segregated so that the Court would retain discretion to modify it in light of creditor concerns. In providing its approval, the Court amended the proposed release order to add a carve out for claims that (a) relate to contractual rights of one or more creditors; or (b) are based on allegations of misrepresentations made by directors to creditors or of wrongful or oppressive conduct by directors. However, the Court declined to comment on whether the claims of the contesting creditors would fall within this exception.

Leave to appeal to the Québec Court of Appeal was granted on December 1, 2025.

HealthHub Patient Engagement Solutions Inc. (Re)

(Nova Scotia)

Monitor’s Website

Whether a ResidualCo can be “deemed” by the Court to be the former employer of certain employees for the purpose of enabling WEPP claims?

Yes (subject to appeal).

On December 19, 2025, the Supreme Court of Nova Scotia approved an RVO that “deemed” the ResidualCo to be the former employer of certain employees for the purposes of termination pay and severance pay pursuant to WEPPA. This order would permit such employees to apply for WEPP immediately following the closing of the RVO.

On December 29, 2025, the Attorney General of Canada, on behalf of Service Canada (who administers WEPP) filed a notice of appeal to the Nova Scotia Court of Appeal arguing that the judge exceeded the Court’s jurisdiction by creating alternate facts by “deeming” the ResidualCo to be the former employer of the terminated employees and then treating it as meeting WEPP criteria, which is contrary to the statute and its purpose.

Cameron Stephens Mortgage Capital Ltd. v. Conacher Kingston Holdings Inc.

(Ontario)

2025 ONCA 732

Endorsement 1

Endorsement 2

Can the Court re-open a bidding process to consider a late, but substantially higher offer, instead of approving the Receiver’s accepted agreement with the appellant?

Yes.

A Receiver was appointed over a Toronto property, and after an extensive marketing process, the Receiver accepted the appellant’s offer, subject only to court approval.

The day before the Sale Approval hearing, a related party of the Debtor tabled offers 6.7% and 14% higher than the appellant’s offer. The motion judge adjourned the matter because of this late activity. Before the adjourned return, the related party submitted a third offer, 37% higher than the appellant’s offer.

At the Sale Approval hearing, the Receiver continued to support the appellant’s offer but recognized that, given the percentage increase of the third offer, which it disclosed to the Court, the Court could order a further auction process.

The motion judge declined to approve the sale and ordered a six‑day re‑opened auction among the bidders, with a condition that the related party reimburse the appellant’s reasonable legal costs if the appellant did not prevail.

The original bidder appealed the decision to the Ontario Court of Appeal.

On appeal, the Court upheld the lower court’s decision to re-open the bidding process. It noted that the magnitude of the late offer (37% higher) justified re-opening the auction to ensure creditors received the best value. As a result, the Court extended the auction process by 48-hours to allow the bidders additional time to submit offers.

The Court also held that the Receiver did not breach confidentiality by disclosing the percentage differences between the bids to the Court. The Receivership Order explicitly provided that the Receiver had discretion to disclose information regarding the property and the receivership, and disclosing the percentage differences between the offers to the Court was reasonable to allow the Court to determine whether to re-open the bidding process.

As of January 22, 2026, leave to appeal to the Supreme Court of Canada has not been filed.

Creative Wealth Media Finance Corp. et al.

(Ontario)

2025 ONSC 4326

Order Appointing Receiver

May a Trustee use estate funds to pay its fees and disbursements, even though such funds may constitute trust funds or otherwise be funds that are subject to the claims of secured creditors?

Yes. The Ontario Superior Court of Justice exercised its inherent jurisdiction under the BIA to order that the Trustee’s fees and disbursements relating to the administration, preservation, and recovery efforts both incurred to date and on a go-forward basis may be paid from the estate funds held by the Trustee, notwithstanding that the estate funds are subject to unresolved trust claims and claims of secured creditors.

Prior to its bankruptcy, the Debtor had raised money through investor participation agreements and secured loan arrangements, which led to a complex creditor matrix with both trust and secured claims. The Trustee had received 200 proofs of claim totalling about $264.7 million and needed clarity from the Court on whether it could draw on estate funds to administer and resolve these claims.

The Court noted that, the BIA does not exhaustively resolve situations where funds are arguably trust property or subject to secured claims before those claims are adjudicated. Additionally, given the number and complexity of potential trust and secured claims in this instance, the Trustee was uniquely situated to maximize recoveries for all claimants and paying the Trustee’s reasonable fees and disbursements was necessary for it to carry out that work.

In making its decision, the Court noted that the Trustee’s motion material were widely served, including on all persons who had filed a proof of claim, and the various creditors of the Debtor. This comprehensive service, combined with the fact that the Trustee’s motion was unopposed, further supported the Court’s decision.

On August 8, 2025, the Trustee was appointed as the Receiver of the Debtor.

ATB Financial v. Mayfield Investments Ltd.

(Alberta)

2025 ABKB 61

Can a forced share sale provision in a unanimous shareholders agreement be voided under the anti-deprivation rule?

Yes. The Court of King’s Bench of Alberta found that a forced share sale provision in a unanimous shareholders agreement was void and unenforceable under the anti-deprivation rule as the provision allowed the other shareholders to purchase the shares of a shareholder who entered receivership at a 25% discount.

The anti-deprivation rule invalidates contractual provisions that, upon insolvency, remove value from the insolvent person’s estate that would otherwise be available to creditors.

The Court emphasized that the purpose of the forced sale provision and the parties’ intentions were irrelevant because the anti-deprivation rule is effects-based and only requires:

that the forced share sale provision was triggered by an insolvency event (in this instance, the receivership of the debtor); and
that the effect of the provision removes value from the estate (here, the provision would allow the other shareholders to purchase the shares at a significant discount).

The shareholders tried to tie the triggering event to an enforcement letter rather than the receivership. While the Court agreed that if the trigger was not an insolvency event, it might not engage the anti-deprivation rule, it found that on the facts the receivership was the triggering event.

As a result, the Court granted the Receiver’s application for a declaration that the provision was void and unenforceable. It authorized the Receiver to market and sell the shares as part of the SISP and dismissed the shareholders’ application to compel the sale and lift the stay.

A notice of appeal was filed with the Alberta Court of Appeal on February 7, 2025 but the application was subsequently discontinued.

Angus A2A GP Inc. v. Alvarez & Marsal Canada Inc.

(Alberta)

2024 ABKB 769

2025 ABKB 51

2025 ABCA 147 (granting leave to appeal in part)

Can equity investors initiate CCAA proceedings against a group of affiliated cross-border entities?

Yes (subject to appeal).

A group of Canadian investors in real estate projects in Ontario and Texas discovered the Ontario project was being sold without their consent so they commenced CCAA proceedings in Alberta to stop the sale and have a Monitor appointed. The Court granted a temporary order halting the sale and appointed a Monitor, with the order later recognized in the US.

The project entities, including Texas LLCs, challenged the orders, arguing improper process and lack of jurisdiction.

The Alberta Court of Appeal granted leave to appeal on the following two questions:

1. Was the CCAA properly used by the investors?

2. Are the Texas-based entities subject to the CCAA?

This appeal was heard on September 8, 2025. As of January 22, 2026, a decision has not been released.

RPG Receivables Purchase Group Inc. v. American Pacific Corporation

(Ontario)

2025 ONCA 371

SCC Case No. 41937

Were payments made by an insolvent company to its major supplier void as preferences when the Debtor claims they were justified by the intention to stay in business?

Yes (subject to leave to appeal).

Specialty Chemical Industries Inc. (“Specialty”) paid USD $400,000 to one of its major suppliers, American Pacific Corporation (“AmPac”), one month before assigning itself into bankruptcy.

Specialty’s trustee in bankruptcy was unsuccessful in its claim to recover the amounts from AmPac and assigned its right of action to a creditor under section 38 of the BIA.

The lower court found that Specialty made the payments to keep its only customer and stay in business, which rebutted the presumption of a preference.

The Ontario Court of Appeal disagreed, finding no objective evidence that the payments would actually save Specialty’s business, and noted that the quantum of the payments was much greater than any benefit Specialty might have received. It therefore found the payments were void as preferences and must be repaid by AmPac.

AmPac filed an application for leave to appeal to the Supreme Court of Canada on August 14, 2025.

Spartan Delta Corp. v. Alberta (Energy and Minerals)

(Alberta)

2025 ABCA 181 (granting leave to appeal)

Does a court-approved CCAA Approval and Vesting Order prevent a creditor from claiming pre-filing royalty arrears from solvent co-lessee third parties?

Yes (subject to appeal).

The chambers judge found that the creditor’s claims for pre-filing royalty arrears against the co-lessees were barred for three reasons:

the clear terms of the Vesting Order prevented such claims;
allowing the creditor to pursue these claims would undermine the integrity and finality of the insolvency process, which is designed to centralize and resolve all claims against the debtor; and
the relevant statute (the Mines and Minerals Act) did not provide a basis for the creditor to pursue these claims after the Vesting Order.

The Alberta Court of Appeal granted leave to appeal, recognizing that the issue is significant for both insolvency and energy law practice. As of January 22, 2026, a decision from the Alberta Court of Appeal has not been released.

Laliberté v. Québec Revenue Agency

(British Columbia)

2025 BCCA 406

SCC Case No. 42181

Did the CCAA stay of proceedings bar Québec penal proceedings against the operating mind of the Debtor such that his conviction should be set aside?

No (subject to leave to appeal).

Laliberté sought leave to appeal an order dismissing an application to set aside a penal conviction under the Québec Tax Administration Act. He argued that the penal conviction was contrary to a stay order issued by the Supreme Court of British Columbia in the context of a CCAA proceeding.

The British Columbia Court of Appeal dismissed the application for leave to appeal for several reasons. Among other things, the Court of Appeal held that a CCAA stay does not extend to penal or criminal proceedings and only applied to civil actions. Section 11.1 of the CCAA expressly preserves the ability of public prosecutors to continue criminal/penal enforcement.

Moreover, different entities were involved in the Québec penal case and the CCAA proceeding. The ARIO stayed proceedings against the CCAA petitioners and their directors only in respect of obligations of the CCAA petitioners – it did not provide a blanket shield from penal liability tied to different companies.

Laliberté filed an application for leave to appeal to the Supreme Court of Canada on January 12, 2026.

Dematic Limited c. Atallah Group Inc.

(Québec)

2025 QCCS 4430

2025 QCCA 1649 (granting leave to appeal)

Does a debtor have an obligation to disclose its impending insolvency in negotiations to settle a contractual dispute?

No (subject to appeal). On these facts, the duty of good faith under the Civil Code of Québec did not require the Debtor to disclose its impending insolvency during settlement negotiations.

The Debtor got into a dispute with a key supplier and settlement discussions took place over several months. Several hours after a settlement was allegedly agreed to, a CCAA application was filed by the debtor’s creditors.

When the Debtor applied to the CCAA Court to have the settlement approved, the supplier opposed, arguing that no binding settlement existed, or alternatively, that its consent was vitiated by the debtor’s fraudulent concealment of its insolvency and bad faith.

The Court granted the application and found that approval was appropriate relief under the circumstances but that neither execution of the transaction - which would have required, among other things, the immediate payment of $10 million - nor provisional execution of the judgment was necessary.

In its reasons, the Court recognized that under the Civil Code of Québec there is a contractual duty of good faith “exists at all stages of a contractual relationship” and can give rise to a duty to inform in certain circumstances. The Court held that there is no general duty for contractual counterparties to disclose their financial difficulties and recognized that such disclosure could make it very difficult for an insolvent party to enter contracts or settle contractual disputes.

Leave to appeal to the Québec Court of Appeal was granted on December 19, 2025.

YG Limited Partnership and YSL Residences Inc. (Re)

(Ontario)

2024 ONSC 1617

2025 ONCA 591

SCC Case No. 42039

Is a claim made under a profit sharing agreement a provable claim under the BIA as it sounds in equity rather than debt?

No (subject to leave to appeal).

A former employee of the debtor appealed the decision of the Trustee that disallowed her profit-sharing claim on the basis that: (i) it was a claim in the nature of equity rather than debt, and (ii) that was too contingent and remote.

The lower court allowed the employee’s appeal, finding that the profit-sharing claim was not a claim in equity, but is instead a claim for unliquidated damages for breach of her employment contract, and that her claim was not contingent or too remote.

The Trustee appealed the lower court’s decisions to the Ontario Court of Appeal.

In dismissing the appeal, the Ontario Court of Appeal stated that:

the definition of “equity claim” under the BIA is meant to be exhaustive and identifies the types of claims that may arise from an equity interest; and
the origin of an equity claim is to be limited to an ownership interest in a corporation.

Applying this framework, the Court rejected the Trustee’s submission that a profit‑sharing entitlement tied to project performance is “in substance” a claim in the nature of equity, not debt. The Court found that the employee held no shares or partnership units and her claim arose from a contractual term of employment, not from any ownership interest. Tying the quantum to employer performance (profits net of certain expenses, including LP repayments) does not convert a contractual obligation into an equity claim.

The Court cautioned that characterization of a claim under the BIA should not be results‑driven and that concerns about perceived unfairness in insolvency priority cannot override the statutory definitions.

An application for leave to appeal to the Supreme Court of Canada was filed on October 14, 2025.

Mohawk Council of Kanesatake v. Sylvestre

(Québec)

2022 QCCS 3332

2023 QCCA 1603

2025 SCC 30

Is filing and serving a notice of execution sufficient to interrupt the 10-year prescription period for the enforcement of judgments?

Yes.

After the Mohawk Council of Kanesatake failed to pay the respondents for their professional services, the respondents obtained default judgments against them. The respondents filed and served a notice of execution to seize movable property, but the bailiff determined the property was exempt from seizure under s. 89 of the Indian Act and no seizure was carried out.

Under Québec law, a prescription period limits a creditors’ right to payment for the enforcement of a judgment – if the creditor takes action to exercise its right within the prescription period, prescription is interrupted and the prescription period restarts. On this basis the Council sought a declaration that the respondents’ rights under the judgments had prescribed because the unsuccessful seizure attempt did not interrupt the prescription period. All three levels of the court involved in this dispute disagreed.

The Supreme Court of Canada held that the filing and service of a notice of execution interrupts prescription even if the subsequent seizure is unsuccessful because:

Interpretations of the rules on interruption of prescription must be understood as a “seamless web” that recognizes that a purpose of the modern law of limitation is that of creditor diligence.
The notice of execution is a procedural act that is “part and parcel” of the seizure as a judicial application and indicates that the creditor intends to make good on their claim. This action is representative of the creditor’s diligence and service of the notice on the debtor interrupts the prescription period.
The fact a seizure was unsuccessful does not retroactively strip the notice of this interruptive effect. Exemptions from seizure may limit enforcement prospects but do not compromise the existence of the debt itself.

Milot Law v. Sittler

(Alberta)

2025 ABCA 72

SCC Case No. 41784

Did the Debtor’s former lawyer (and now creditor) breach solicitor-client privilege or confidentiality by disclosing to the Bankruptcy Trustee information and records obtained during pre-bankruptcy tax litigation?

No.

The Debtors hired Milot Law to represent them in a tax litigation matter. Later, when the Debtors assigned themselves into bankruptcy, Milot Law became one of their creditors for its unpaid legal fees.

After reviewing the Statement of Affairs prepared by the Trustee, based on information obtained while representing the Debtors, Milot Law became aware that the Debtors had not disclosed all their assets to the Trustee.

After requesting that the Debtors voluntarily disclose the missing information, and consulting with a practice advisor, Milot Law provided the Trustee with the previously undisclosed records, in redacted form.

The lower court found that Milot Law’s actions did not breach privilege. The Debtors appealed the decision and sought a declaration that no party in the bankruptcy proceeding may rely on the information disclosed to the Trustee by Milot Law.

On February 28, 2025, the Alberta Court of Appeal dismissed the debtors’ appeal. The Court stated that the financial records and business documentation provided to Milot Law were not privileged since they were not created for the specific purpose of seeking legal advice. Therefore, Milot Law did not breach its duties of privilege and/or confidentiality.

On April 28, 2025, the Debtors filed an application for leave to appeal to the Supreme Court of Canada. On October 9, 2025, the application for leave to appeal was dismissed.

Easy Legal Finance Inc. v. Law Society of Alberta

(Alberta)

2024 ABKB 410

2025 ABCA 112

Should the “interest stops rule” stop interest from accruing on a secured creditor’s claim during a receivership?

No. The Alberta Court of Appeal held that the rule should not be extended in this manner.

The “interest stops rule” is a well-established principle in insolvency law that says that interest on debts stops accruing from the date of bankruptcy or insolvency proceedings. This rule is meant to ensure fairness among unsecured creditors, so that those with interest-bearing debts do not receive a greater portion of the estate than those with non-interest-bearing debts.

In this case, the Law Society of Alberta and others wanted the interest stops rule to apply to a secured creditor, Easy Legal Finance Inc., who was owed over $1.4 million with interest at 18% per year. They argued that it was inequitable for the secured creditor to receive an ever-increasing portion of the estate.

The Alberta Court of Appeal disagreed and held that the interest stops rule has never applied to secured creditors in a receivership and there is no legal basis to expand it. The rule remains limited to unsecured creditors. Secured creditors can continue to accrue interest on their claims during a receivership.

The time period for seeking leave to appeal to the Supreme Court of Canada has lapsed. Leave was not sought.

¹ The authors are grateful for the assistance of Erin Rix (Articling Student at Davies Ward Phillips & Vineberg LLP) during the preparation of this chart.