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44 J u n e 2 0 1 4 w w w . C A N A D I A N L a w y e r m a g . c o m settlement. What he was saying was that you can't opt out of the CCAA proceeding — you have to be participat- ing throughout and you can't sit in the weeds and come out at the last minute to try and blow up the deal," says Derek Bell. "From that vantage point it's not a terribly surprising outcome." Shaun Laubman, of Lax O'Sullivan Scott Lisus LLP, has worked on a variety of CCAA proceedings including Can- west, Nortel, and cases involving ABCP. He says a big consideration in this case was how relatively insignificant, in terms of the overall number of shareholders in this restructuring, the dissenters were. "That's always going to carry fairly signif- icant weight for the court in determining whether to sanction a plan. Where does the weight of the support exist? In this case it was fairly overwhelming." In their analysis, Osler Hoskin and Harcourt LLP lawyers Laura Fric and Karin Sachar wrote that Morawetz "rec- ognized that a class settlement must ordinarily include an opt out provision. However, he held that the CCAA allowed the court to impose a compromise of the class action claims on Invesco since the settlement was approved by the requisite majority of creditors and was fair and reasonable." Critics say the request for leave to appeal needlessly delayed the payout of the $117-million settlement, consid- ered the largest of its kind by an audi- tor in Canadian history, while others representing the plaintiffs argue opt-out rights were not adequately protected. Peter Osborne, a partner with Lenc- zner Slaght Royce Smith Griffin LLP who acted on behalf of EY, says the plan from the outset was to vigorously defend the claims from the plaintiffs but the insolvency and filing of the company under the CCAA "obviously changed the dynamic dramatically" in that all claims can be compromised in the CCAA and there's no exception for class action representative claims. "I think the other element was that there was some precedent under the CCAA for the provision of a global release in circumstances where the court was sat- isfied there is a material contribution to the CCAA plan," says Osborne. "So that was obviously a factor to be taken into account as well that if the opportunity did arise to get to a settlement where a full and final release was a component of that, it was something that had some value." The idea that all claims are compro- mised in a CCAA proceeding is not new. The first was in the 1998 decision of Sammi Atlas Inc., which essentially said a dissenting stakeholder can't opt out of a CCAA. "To my knowledge, the only other case in which there has been court approval of a class action claim within a CCAA where the court dealt with opt outs and the test under both statutes is the authority that both Jus- tice Morawetz and the Court of Appeal referred to — the CCAA restructuring lEgal rEport/insolvenCy Let experts guide you through the substantive and procedural law governing the law related to litigation involving the Federal Crown. The Annotated 2014 Crown Liability and Proceedings Act includes the full English and French text of the Crown Liability and Proceedings Act, section-by-section commentary, digests of all relevant judicial decisions, and cross-references to related legislative provisions and secondary sources. You'll find expert analysis of the vicarious liability of the Crown, the nature of duties owed by the Crown, the limits on the availability of injunctive relief, and the immunity of the Crown and its agents from provincial legislation. And you'll get all the significant case law so you'll know exactly how the legislation has been applied by the courts. With a copy of The Annotated 2014 Crown Liability and Proceedings Act by your side, you'll be confident you're interpreting the legislation correctly. And you'll be certain you understand all the latest developments and cases that could impact your claim or defense. Get expert Guidance on the law GoverninG litiGation involvinG the federal crown New editioN The AnnoTATed 2014 Crown LiAbiLiTy And ProCeedings ACT ThE hon. Mr. JusTiCE DonALD J. rEnniE, BriAn J. sAunDErs, MiChAEL h. Morris, AnD JAn BrongErs AvAilAble Risk-FRee FoR 30 dAys order online: www.carswell.com Call toll-Free: 1-800-387-5164 in toronto: 416-609-3800 order # 985555-65203 $190 hardcover approx. 300 pages December 2013 978-0-7798-5555-1 Shipping and handling are extra. Price subject to change without notice and subject to applicable taxes. 00216ZZ-A44938

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