48 LEXPERT
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2018
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WWW.LEXPERT.CA
Wright, Janice L. Wright Temelini LLP
(416) 479-9685 janice@wrighttemelini.com
Ms. Wright acts in a broad range of complex civil, regulatory and cross-border
litigation. She has extensive experience dealing with financial and securities
regulators across the country. She currently represents a client in one of
Canada's leading insider trading cases. She has completed the Directors
Education Program at the Rotman School of Management and has the ICD.D
professional designation.
Woods, Seumas Blake, Cassels & Graydon LLP
(416) 863-3876 seumas.woods@blakes.com
Mr. Woods has a broad corporate-commercial practice, which includes
litigation arising from securities transactions and shareholder activism
matters, commercial disputes and construction claims. He has appeared
before courts and commissions across Canada and in domestic and
international arbitrations. He brings extensive legal knowledge
and a practical, common-sense approach to legal problems.
LEXPERT-RANKED LAWYERS
allegations including that Chan, the CEO of the
company, and certain other directors and officers
"appear to be engaging or participating in acts,
practices or a course of conduct related to its se-
curities which it and/or they know or reasonably
ought to know perpetuate a fraud." Among other
things, the order cease-traded Sino-Forest's secu-
rities and required Chan and other members of
management to resign.
In March 2012, Sino-Forest filed for protection
under the Companies' Creditors Arrangement Act.
e resulting plan of arrangement by the court
transferred certain of Sino-Forest's litigation
rights to a Litigation Trust to pursue for the ben-
efit of Sino-Forest's creditors.
On March 31, 2014, the SFC Litigation Trust
commenced an action against Chan alleging fraud
and breach of fiduciary duty.
TRIAL AND JUDGMENT
e trial was held in March, April and May 2017,
with closing arguments taking place over a week
in July 2017. ree weeks of the trial were held in
Hong Kong, with Justice Michael Penny of On-
tario's Superior Court of Justice sitting as com-
missioner to take the evidence of witnesses who
resided in Hong Kong and mainland China.
Justice Penny released his decision finding in
favour of the SFC Litigation Trust on March 14,
2018. He found Chan secretly controlled many of
Sino-Forest's counterparties (i.e., its suppliers and
customers) through a complex network of rela-
tionships with third parties.
Justice Penny found that Sino-Forest's primary
business model under which it claimed to buy
and sell forestry plantations within China was a
fraud, and that "Sino-Forest lacked the requisite
documentation to find the standing timber assets,
much less prove that it had any ownership interest
in them." He also found Chan defrauded Sino-
Forest by causing it to fund deposits and advance
payments to entities Chan secretly controlled.
Penny held that Chan was liable for US$2.6 bil-
lion in damages for fraud and breach of fiduciary
duty, as well as punitive damages of $5 million.
Damages recovered from Chan will go to the ben-
eficiaries of the SFC Litigation Trust, being the
creditors of the now defunct Sino-Forest.
On April 7, Chan served and filed a notice of
appeal of Justice Penny's decision. e appeal
is pending.
Bennett Jones LLP was counsel to Sino-Forest
Corporation and the SFC Litigation Trust, with
a team including Robert Staley, Alan Gardner,
Jonathan Bell, Preet Bell, Jason Berall and Wil-
liam Bortolin.
Allen Chan was represented by Rueters LLP,
with a team including Robert Rueter, Sara Ers-
kine, Malik Martin and David Barbaree.
Zych, Kevin J. Bennett Jones LLP
(416) 777-5738 zychk@bennettjones.com
Mr. Zych, a partner in the Restructuring and Insolvency group, focuses on
restructurings under the CCAA and the CBCA, including public matters such
as Concordia, Connacher Oil, Lightstream Resources, Quicksilver Resources
Canada, Tervita, Nelson Education, U. S. Steel Canada, Yellow Media
and Nortel.
Zarnett, Benjamin Goodmans LLP
(416) 597-4204 bzarnett@goodmans.ca
Mr. Zarnett's litigation practice has included high-profile business cases
including the litigation over the proposed privatization of BCE, the Asset-
Backed Commercial Paper litigation, Indalex priority dispute and Nortel
asset allocation dispute. He appears before the SCC, FCC, all levels
of court in Ontario and many administrative tribunals.
Yorke-Slader, QC, Blair C. Bennett Jones LLP
(403) 298-3291 yorkesladerb@bennettjones.com
Mr. Yorke-Slader is a partner in Bennett Jones' litigation department. An ACTL
and IATL fellow, he is a leading practitioner in high-stakes corporate and
commercial litigation with an active trial and appellate business and energy
litigation practice. He also has significant arbitration experience as counsel
and as an arbitrator.
dependent Committee to investigate the allegations contained in the report. In
turn, the Independent Committee retained professional firms to assist with the
investigation. Aer eight months of investigation, the Independent Committee
released its final report on January 31, 2012, disclosing that the issues it exam-
ined "proved very difficult to definitively resolve."
e Ontario Securities Commission (OSC) also commenced an investiga-
tion into Sino-Forest. On August 26, 2011, the OSC issued an order containing
