The Lightstream decision confirms that Canadian courts have the jurisdiction under the CCAA to both: (i) incorporate and apply the oppression remedy; and (ii) where appropriate, when oppressive conduct has occurred, grant an order requiring a corporation to issue additional securities. However, such jurisdiction is limited and defined by the scheme and purpose of the CCAA.
Lightstream suggests that this jurisdiction will be sparingly exercised, and courts will decline to do so where ordering such a remedy would result in creditors manoeuvering for a better position. We expect that a successful oppression claim brought in the context of CCAA proceedings will, at best, result in a monetary damages award, which may very well be worthless in many circumstances.
Further, appeals from decisions of judges supervising CCAA proceedings are only to be sparingly granted. Leave to appeal is unlikely to be granted where there is a critical timeline working towards an arrangement with creditors. Appeals may unduly hinder the progress of CCAA proceedings and the statute's purpose. The outcome of the Lightstream decisions affirm the underlying purpose of the CCAA – to allow for the successful restructuring of a debtor company's obligations in as short a time as reasonably possible.
For a detailed discussion of the case, read our analysis here.