Alberta Courts Confirm Restructuring Transactions With Select Creditors Not Oppressive And Comment On Availability Of The Oppression Remedy In CCAA Proceedings

In Re Lightstream Resources Ltd, 2016 ABQB 665 (Lightstream), the Court of Queen's Bench of Alberta (Court) confirmed that it had jurisdiction to remedy oppressive conduct while a business is restructuring under the Companies' Creditors Arrangement Act (CCAA). The decision also provides insight as to when a court might exercise its equitable jurisdiction to remedy oppressive conduct in a CCAA proceeding.

Background

Lightstream arose when the two largest unsecured noteholders of Lightstream Resources Ltd. (Lightstream), Apollo Global Management LP (Apollo) and GSO Capital Partners (GSO), completed a transaction (the Transaction) with Lightstream, exchanging their unsecured notes for secured notes. The Transaction excluded two smaller unsecured noteholders, Mudrick Capital Management (Mudrick) and FrontFour Capital Corp. (FrontFour and with Mudrick, together, the Applicants), who argued that their exclusion from the Transaction was oppressive. The Applicants