which commenced as a CBCA proceeding by way of an

interim order but eventually was reorganized pursuant to

the provisions of the CCAA.

LATER on page 2 of the bulletin:

Because CBCA proceedings often involve a compromise

of equity rights as well as the rights of creditors, the

Director typically requires that dissent rights be provided

in all plans of arrangement and, if they are not, the

applicant must justify why they are not provided.

Dissent rights involve the ability of an equity holder to

dissent from the proceedings, refrain from voting upon

the plan and instead engage a process whereby his

equity is valued and surrendered in return for the valued

consideration of that equity.

The issues that arise on a final approval hearing relate

to whether or not the statutory prerequisites to an

arrangement have been met, whether creditors have

been properly classified for the vote and whether the

plan is fair and reasonable. The fairness issue requires

the court to consider whether there will be a positive

value to the corporation to offset the fact that rights are

being altered. An important factor will be whether the

arrangement is necessary to the continued operations

of the corporation. The higher the level of necessity,

the greater the court’s willingness to accept prejudice

to some security holders. Additionally, the court must

consider whether the arrangement strikes a fair balance

having regard to the interest of the corporation and the

circumstances of the case. A positive vote by security

holders is an important factor in the analysis, but the

outcome of such a vote is not determinative of whether

the arrangement will be approved.