Need to Know

CCAA: Bet on the right horse – the “stalking horse” in Quebec

- Jean-Yves Simard

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The case of the arrangement respecting White Birch Paper (the “White Birch Group”) was one of the most significant matters brought before the Commercial Division of the Superior Court of Quebec in 2010. Not only did this matter receive a lot of attention on account of its crossborder aspect and the number of parties involved, it also constituted a precedent for sales of assets under the new provisions of the Companies' Creditors Arrangement Act (the “CCAA”). In particular, Mr. Justice Robert Mongeon approved a relatively complex process for the solicitation of offers and the sale of assets based on the American “stalking horse” method and allowed a secured creditor to use the secured portion of his debt to bid on the assets offered for sale (“credit bidding”). While credit bidding is the subject of another In Fact and In Law bulletin, this article is intended to focus on the use of the stalking horse method.

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