Restructuring Report — A Decent Proposal: Hot Button Issues under Part III of the BIA

In Re Kitchener Frame Limited, the Ontario Superior Court of Justice (Commercial List) considered three hot-button issues in a proposal proceeding under Part III of the BIA.  First, the Court granted substantive consolidation of proceedings, finding that the Court had jurisdiction to do so pursuant to s. 183 of the BIA.  Second, the Court granted broad third party releases in favour of the Applicants, a number of third parties and any person liable through or derivatively though any or all of the beneficiaries.  In granting such releases, the Court found that the BIA does not prohibit third party releases and found it was appropriate to grant such releases where the criteria outlined for releases under the CCAA was satisfied.  Finally, the Court revisited the interpretation of the BIA and the CCAA and re-emphasized the principle that the statutes should be harmoniously interpreted to the greatest extent possible.

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