Reconstruct LLP achieves a win for Tokyo Smoke
The Ontario Superior Court (Commercial List) has weighed in on the perennial issue of whether a guarantee claim can be stayed under the CCAA. While CCAA courts have done so in purportedly uncontested circumstances, Justice Black has provided new guidance after a fully briefed and hotly contested motion.
Reconstruct LLP acted for Tokyo Smoke in seeking a stay of arbitration asserting liability under a guarantee by a related, non-debtor company. Justice Black’s decision provides expansive reasons parsing the apparent prohibition under s. 11.04 of the CCAA against staying guarantees, exploring the Court’s jurisdiction to stay guarantees pursuant to section 11 of the CCAA, and the breadth of the Court’s general powers. Our team, Sharon Kour, William L. Main and Gabrielle Schachter appeared for Tokyo Smoke, the successful party on the motion.
To find out more, read the decision here.
