Beyond True Sale: Can A CCAA Court Allocate Additional Restructuring Costs To Securitization Parties?

In Pride Group Holdings Inc. et al., 2026 ONSC 4700 (“Pride Group”), the Ontario Superior Court of Justice (the “Court”) held that securitization parties whose assets were expressly excluded from the debtor’s “Property” under a CCAA proceeding could not be compelled to contribute additional funds toward the debtor’s restructuring costs, beyond any amounts already paid by them. While the decision is currently under appeal, it nonetheless provides important guidance to market participants.

The decision addresses a risk that is difficult to price at closing: the possibility that costs arising from an originator’s insolvency could migrate back into an otherwise bankruptcy-remote structure through cost allocation.