Advancing a Claim when a company is in CCAA
The next day, in Ernst & Young Inc. v. Essar Global Fund Limited, 2017 ONCA 1014, the Ontario Court of Appeal outlined the circumstances that can justify a Monitor setting aside its neutrality and serve as a complainant in exceptional circumstances. In particular, if proceedings are “adjunct to [the Monitor’s] role in facilitating a restructuring” and consistent with the objectives of the CCAA, it may be appropriate for a monitor to serve as a complainant.
During proceedings under the CCAA or the BIA, litigation funding can provide another option for pursuing an action. There may be meritorious causes of action that Monitor or Trustee cannot advance. A litigation funder can provide the resources to investigate potential claims, pay legal fees and disbursements, and cover a costs award if the case is unsuccessful. The types of claims commonly funded include:
• breaches of directors’ duties;
• transactions voidable in insolvency (eg preference payments; uncommercial transactions);
• insolvent trading; and
• actions against professional advisors or other third party defendants.
Funding can play a valuable role in increasing returns to creditors. To learn more about how funding might assist in the investigation or litigation of a claim for an insolvent estate, please contact us.