Enhancing the Prospects of a Viable Recovery: Ontario Court Reinforces the Use of CCAA Disclaimer Provisions in the Context of a Sale Process

Regardless of how a proposed disclaimer comes before the Court, under section 32 of CCAA the Court is required to consider the same criteria. Subsection 32(4) of the Act provides as follows: 1. Factors to be Considered - In deciding whether to make the order [authorizing or rejecting a proposed disc...

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Bibliographic Details
Published in:Banking & finance law review 2013-08, Vol.28 (3), p.549
Main Authors: Phoenix, R Graham, Kauffman, Aubrey E
Format: Article
Language:English
Subjects:
Agreements
Contract law
Court hearings & proceedings
Debt restructuring
Debt service
Disclaimers
Judges & magistrates
Jurisprudence
Sale of a business
State court decisions
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Summary:Regardless of how a proposed disclaimer comes before the Court, under section 32 of CCAA the Court is required to consider the same criteria. Subsection 32(4) of the Act provides as follows: 1. Factors to be Considered - In deciding whether to make the order [authorizing or rejecting a proposed disclaimer], the court is to consider, among other things, (a) whether the monitor approved the proposed disclaimer or résiliation; (b) whether the disclaimer would enhance the prospects of a viable compromise or arrangement being made in respect of the company; and (c) whether the disclaimer would likely cause significant financial hardship to a party to the agreement.
ISSN:0832-8722