Catch and Release: Class Actions and Solvent Third Parties Under the Ccaa

AuthorLauren Pearce
Pages171-199
171
CATCH AND RELEASE: CLASS
ACTIONS AND SOLVENT THIRD
PARTIES UNDER THE
CCAA
Lauren Pearce
Abstract: Solvent parties, other than the debtor company, are
increasingly being released from liability for legitimate class
claims against them pursuant to restructuring arrangements
under the Companies’ Creditors Arrangement Act (CCAA). This
paper considers a number of the imp ortant policy issues rais ed
by third party releases, particularly where they purport to
foreclose or settle tenable class actions. The fact that CCAA
releases f‌inally determine liability on a non-opt-out basis,
coupled with the remedial purpose of the CCAA in facilitat-
ing swift and effective corporate restructurings, suggest that
class action defendants will be strongly incentivized to have
the claims against them resolved in thi s manner. Third party
releases are clearly here to stay.
While the settlement and release of class claims under
the CCAA may disproportionately benef‌it parties who are or
may become class action defendants, plaintiffs’ counsel can
and should use this process to strategically leverage larger,
faster settlements for the classes they represent. This paper
offers specif‌ic, practic al lessons for plaintiffs’ counsel s eeking
to realize favourable outcomes under t he CCAA. To the extent
class counsel are able to swiftly and inexpensively negotiate
fair and meani ngful class settlements within the ambit of the
CCAA, the important objectives of access to justice, judicial
economy, and behaviour modif‌ication will continue to be
served.
ccar 11-2.indb 1713/8/2016 2:27:20 PM
ccar 11-2.indb 1723/8/2016 2:27:20 PM

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