Need to Know
In 2002, the Québec Court of Appeal acknowledged the importance of sureties in a dispute between a construction company and a supplier. The Court noted that the construction company's losses had been exacerbated by the withdrawal of its surety facility.
More recently, the Québec Superior Court established that the active participation of a surety in the restructuring of a company under the Canadian Companies’ Creditors Arrangement Act was critical to determining whether a surety’s obligations could be reduced under the terms of an arrangement. Accordingly, in Charles-Auguste Fortier inc. (Arrangement relatif à), the Court approved an arrangement under the CCAA, which provided for a partial release of claims against the surety of the debtor company.