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ARTICLE · 26 JANUARY 2026

An Exception To The Exceptional? D&O Releases In CCAA Proceedings

McMillan LLP
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The novel issue in Metcalfe was whether the CCAA permits a plan to include releases of claims against third parties who are themselves not creditors or debtors and therefore parties to the plan

CanadaInsolvency/Bankruptcy/Re-Structuring
Jeffrey Levine
Jeffrey Levine
Harmeena Kaur Dhillon
Harmeena Kaur Dhillon
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Introduction

Director and officer releases ("D&O Releases"), termed "third-party releases" in the context of releases granted further to a restructuring transaction, are often a crucial part of a successful "fresh start" for debtor companies seeking a future through restructuring or to consummate a transaction that will bring an end to an insolvency proceeding. In the 2008 landmark decision Metcalfe & Mansfield Alternative Investments II Corp., (Re),1 ("Metcalfe") the Ontario Court of Appeal held that courts may sanction plans of arrangement under the Companies' Creditors Arrangement Act2 ("CCAA") that provide releases to solvent third parties, such as directors and officers of a debtor company.

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The foregoing provides only an overview and does not constitute legal advice. Readers are cautioned against making any decisions based on this material alone. Rather, specific legal advice should be obtained.

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