Lexpert magazine features articles and columns on developments in legal practice management, deals and lawsuits of interest in Canada, the law and business issues of interest to legal professionals and businesses that purchase legal services.
Issue link: https://digital.carswellmedia.com/i/1544329
28 www.lexpert.ca Canadian Law Awards Canadian Law Awards INSOLVENCY AND RESTRUCTURING DEAL OF THE YEAR THE INSOLVENCY and restructuring category in 2025 reflects a year of landmark proceedings that tested the outer limits of Canadian restructuring law. From the reso- lution of decades-long tobacco litigation to cross-border battery recycling restructurings and retail wind-downs, these deals highlight the legal and financial expertise required to navigate complex insolvencies, protect cred- itor interests, and preserve enterprise value. One of the significant restructurings of the year is the Canadian tobacco industry's res- olution under the CCAA, producing a his- toric $32.5 billion settlement of all tobacco- related liabilities in Canada, the largest in Ca- nadian history. Imperial Tobacco, Rothmans Benson & Hedges, and JTI-Macdonald had entered CCAA protection in March 2019, collectively facing approximately $1 trillion in asserted claims dating back to the 1950s, including provincial and territorial healthcare cost-recovery claims, a Quebec class action judgment exceeding $13 billion, and numer- ous other proceedings. Over six years, approx- imately 25 parties with divergent interests en- gaged in a complex mediation. e resulting CCAA plans, unanimously approved by af- fected creditors in December 2024 and sanc- tioned in March 2025, will see approximately $24 billion paid over two decades to provinces and territories, more than $4 billion to Que- bec class action plaintiffs, $2.5 billion to other Canadian smokers, and over $1 billion to a newly created research foundation. e plans introduced groundbreaking elements, includ- ing compensation based on future earnings, a 20-year implementation period with continu- ing monitor oversight, and the imposition of non-consensual plans over objecting debtors, an issue never previously addressed in Canadi- an jurisprudence. Blake, Cassels & Graydon LLP, led by Linc Rogers and Pamela Huff, act- ed for Deloitte Restructuring, and Cassels Brock & Blackwell LLP acted for Ernst & Young in its capacity as court- appointed monitor and CCAA plan administrator for Rothmans, Benson & Hedges Inc (RBH). Davies Ward Phillips & Vineberg LLP acted for FTI Consulting. McCarthy Tétrault, led by Jamey Gage, repre- sented RBH. Osler, led by Marc Wasserman, acted for Imperial Tobacco. ornton Grout Finnigan LLP represented JTI-Macdonald, Torys acted for JT Canada LLC Inc. and PricewaterhouseCoopers as receiver, and Bennett Jones, led by Michael Eizenga, rep- resented a consortium of provincial and territorial governments. Brett Harrison and Tushara Weerasooriya from McMillan LLP also advised in this deal, and Gowling WLG, led by Clion Prophet, acted for Philip Morris International. Another major proceeding is Li-Cycle Holdings' CCAA restructuring, involving a global lithium-ion battery recycling company ONE OF THE SIGNIFICANT RESTRUCTURINGS OF THE YEAR IS THE CANADIAN TOBACCO INDUSTRY'S RESOLUTION UNDER THE CCAA once valued at more than US$1.6 billion. Li-Cycle faced severe challenges, including a 99 percent decline in its share price, cash con- straints, and significant litigation. rough CCAA proceedings in Canada and recogni- tion under Chapter 15 in the Southern Dis- trict of New York, the company secured DIP financing, stayed claims, and conducted a sale pro- cess with a stalking-horse bid. Glencore Canada ultimately acquired the majority of Li-Cycle's North American assets and its European parent through a credit bid and the assumption of sig- nificant liabilities. e recognition decision is now a leading case on centre-of-main-interest analysis for US operating entities within a for- eign-headquartered group. McCarthy Tétrault, led by Heather Meredith and Fraser Bourne, served as lead counsel to Li-Cycle. Osler, led by Michael De Lellis and Martino Calvaruso, acted for monitor Alvarez & Marsal. Torys, led by Scott Bomhoff, represented Glencore Canada, and Stikeman Elliott also advised Li-Cycle. McMillan, led by Wael Rostom, acted as co-counsel with Quinn Emanuel Urquhart