Case information

Bankruptcy and insolvency — Companies’ Creditors Arrangement Act (CCAA) — Compromise — Scope of release in favour of company directors and officers — Wrongful or oppressive conduct by directors — Defamation claim against directors — Claims against directors and officers of debtor company that may not be compromised in restructuring proceedings under CCAA pursuant to “wrongful or oppressive conduct” exception in s. 5.1(2) of CCAA — Party that has burden of proving that conduct of director or officer is “wrongful or oppressive” within meaning of s. 5.1(2) of CCAA, and extent of that burden — Companies’ Creditors Arrangement Act, R.S.C. 1985, c. C-36, s. 5.1(2) and (3).

Case summaries are prepared by the Office of the Registrar of the Supreme Court of Canada (Law Branch). Please note that summaries are not provided to the Judges of the Court. They are placed on the Court file and website for information purposes only.

On May 1, 2020, in response to a column by Michel Girard published in Le Journal de Montréal on April 29, 2020, and entitled “Le Cirque du Soleil contrôlé depuis un paradis fiscal” [Cirque du Soleil controlled from tax haven], the applicants, collectively referred to as Groupe Cirque du Soleil, sent the respondents, Quebecor inc., Quebecor Media inc., MediaQMI inc. and Michel Girard, a demand letter in which they alleged, among other things, that the title and content of Mr. Girard’s column [TRANSLATION] “were false and without any factual basis [and] intentionally biased” and that “Mr. Girard’s avowed goal was to undermine [their efforts] in [their] endeavour to obtain financial assistance or financing on commercial terms from the Canadian and Quebec governments in the context of the current crisis”. That demand letter was leaked through the newspaper La Presse before the respondents even received it. On May 6 and 9, 2020, the respondents sent the applicants two demand letters in succession in which they insisted that the applicants retract [TRANSLATION] “fully and publicly the false and deceptive statements in [their] letter of May 1, 2020”. On May 25, 2020, the respondents sent a formal demand letter to a number of individuals, including Daniel Lamarre, David Trujillo, Stéphane Lefebvre and Mitchell Garber in their [TRANSLATION] “capacity as officer and/or director (or shareholder assuming the powers of the board of directors under a unanimous shareholders’ agreement) of Cirque du Soleil Holdings L.P. and/or its affiliated companies”. In that letter, the respondents continued to demand the retraction of the statements made in order to avoid involving the courts in the matter through an action in defamation. On May 27, 2020, the applicants and the individuals referred to in the letter of May 25 indicated for their first time, through their counsel, that they refused to retract the statements. On June 29, 2020, the respondents filed a court action in defamation against the individuals referred to in the letter of May 25, 2020. On June 30, 2020, that defamation claim was stayed by an initial order made by the court under the CCAA. The intervener, Ernst & Young Inc., was then appointed monitor. On October 26, 2020, the court made an approval and vesting order under the CCAA, continued the stay of the action in defamation and released the applicants’ directors and officers from any existing or future claim based on any act or omission relating to the conduct of the applicants’ business or affairs, except the defamation claim. In early December 2021, the respondents filed a motion for a determination of the scope of the release in favour of former directors and, accordingly, for the lifting of the stay of proceedings under ss. 13 and 14 of the CCAA. The Superior Court granted the motion, thereby allowing the defamation claim to continue. The Court of Appeal dismissed the application for leave to appeal from the Superior Court’s decision.