Alberta Courts Confirm Restructuring Transactions With Select Creditors Not Oppressive

The Lightstream decision confirms that Canadian courts have the jurisdiction under the CCAA to both: (i) incorporate and apply the oppression remedy; and (ii) where appropriate, when oppressive conduct has occurred, grant an order requiring a corporation to issue additional securities. However, such jurisdiction is limited and defined by the scheme and purpose of the CCAA.

Lightstream suggests that this jurisdiction will be sparingly exercised, and courts will decline to do so where ordering such a remedy would result in creditors manoeuvering for a better position. We expect that a successful oppression claim brought in the context of CCAA proceedings will, at best, result in a monetary damages award, which may very well be worthless in many circumstances.