On February 25, 2026, the Superior Court of Québec issued a noteworthy decision in the insolvency proceedings of SRTX Inc. and its affiliates (collectively, the SRTX Group), the company behind Sheertex, a well-known brand of rip-resistant tights. The Honorable Justice Luc Morin approved a pre-packaged transaction (also known as a “prepack”) under a “reverse vesting” structure, thereby facilitating the transfer of the SRTX Group’s business to Québec-based A.Y.K. International Inc. (AYK).

Section 192 of the Canada Business Corporations Act (CBCA) provides a flexible tool that allows corporations to achieve important change and undertake various corporate transactions, subject to court approval and oversight. This article aims to provide an update on the Québec courts’ acceptance of virtual securityholder meetings and approach to the solvency requirement.

Overview of the arrangement process