Skip to content.

Supreme Court of Canada hears appeal surrounding creditors' voting rights on plans of arrangement, and litigation funding in CCAA proceedings

Date Closed

January 23, 2020

Lead Office


On January 23, 2020, the Supreme Court of Canada issued its decision in 9354-9186 Québec inc. v. Callidus Capital Corp.

In the course of its CCAA proceedings, Bluberi (also known as 9354-9186 Québec inc.) proposed to enter into a litigation funding agreement to finance litigation against its former secured creditor. Bluberi’s proposal required court approval, which triggered the presentation of an opposing plan by the former secured creditor, essentially offering a lump sum payment to Bluberi’s creditors in exchange for a full release pursuant to a plan of arrangement. The former secured creditor’s plan provided for an immediate recovery for creditors rather than a recovery conditional on the success of a protracted litigation and gathered support from many unsecured creditors, namely former employees and trade creditors of Bluberi. The foregoing gave rise to a litigation which pitted Bluberi against its former secured creditor to determine which alternative would succeed.

McCarthy Tétrault represented an unsecured creditors’ group in the context of these proceedings. In a precedent-setting decision, the Supreme Court of Canada, reversing the Québec Court of Appeal decision and reinstating the first instance decision: (i) recognized the application of the improper purpose doctrine to the CCAA thereby conferring CCAA courts with the power to prevent a creditor from voting on a plan, (ii) confirmed that litigation funding may be approved as interim financing and (iii) emphasized the discretionary powers of the supervising judge in CCAA proceedings.

Bluberi is a US-based casino game developer that provides gaming software and services to casino owners.

McCarthy Tetrault advised the unsecured creditors' group with a team led by Jocelyn Perreault that included François Alexandre Toupin, Noah Zucker, Guillaume Mercier, Dominique Paiement, Laurence Landry-Plouffe, Thierry Noiseux, Justine Blair, and Gabriel Faure.