The CCAA’s Reach Expands: Equity Investors, Foreign Companies and Solvent Companies

Can equity investors commence proceedings under the Companies’ Creditors Arrangement Act (CCAA)? Can CCAA relief extend to foreign companies with no business or assets in Canada? Can CCAA relief be granted against entities that are not insolvent? In a precedent-setting decision released on May 11, 2026, the Alberta Court of Appeal held, yes, yes and yes (in appropriate circumstances). Importantly, however, the Court emphasized the unusual facts of the case and the broad discretionary nature of CCAA relief.

The Angus A2A Group’s CCAA Proceedings

The unique CCAA proceedings of the Angus A2A Group were commenced on an urgent basis by five equity investors who sought and obtained an Initial Order under the CCAA in November 2024, after learning through a social media post that a sale of land in which they had invested was imminent.

The investors had not received notice of the sale, nor contractually required financial reporting or other communication from the Angus A2A Group. The goal of the CCAA proceedings was to stop the sale and permit the Monitor, with enhanced powers, to gather information, liquidate assets and fairly distribute proceeds to creditors and investors.

The Angus A2A Group involved a convoluted structure of entities that held real estate projects in Texas. In simplified terms, Canadian investors held units in Canadian trusts, which in turn held units in Canadian limited partnerships, which in turn held interests in Texas LLCs. The Texas LLCs held the underlying real estate assets and had no business or operations in Canada. The entities subject to the CCAA Initial Order included the Canadian trusts, the Canadian limited partnerships and their Canadian general partners, as well as the Texas LLCs.

At the comeback hearing (i.e., the hearing that occurs within 10 days of the Initial Order, to seek expanded relief on notice to a broader group of stakeholders), the Angus A2A Group cross-applied to have the Initial Order set aside on several grounds. Their cross-application was ultimately dismissed, and the CCAA proceedings continued. The Angus A2A Group was granted leave to appeal, with the Alberta Court of Appeal (ABCA) highlighting the novel issues at play.

The Alberta Court of Appeal Decision

The issues on appeal included:

• Whether equity investors qualified as “interested persons” entitled to commence CCAA proceedings
• Whether foreign companies with no business or assets in Canada could be subject to the Initial Order
• Whether solvent Canadian entities could be subject to the Initial Order

1) Are equity investors entitled to commence CCAA proceedings? 

The ABCA observed that there is no known precedent for a CCAA Initial Order being granted upon application by equity investors who were not owed debts by the relevant companies. CCAA proceedings are typically commenced by the insolvent debtor company itself or, increasingly, by secured creditors. However, the CCAA does not specify who may bring an initial application.

The legislation grants broad authority for the court to make orders “on the application of any person interested in the matter.” The CCAA does not define who qualifies as an “interested person." The Court held that this broad language does not reflect an intention to categorically exclude equity investors. However, to qualify as an “interested person” in any given case, a party must, at minimum, have a financial interest in the outcome of the proceedings.

While equity investors are typically “out of the money” and therefore lack a financial interest in the outcome of CCAA proceedings, the Court highlighted that where a company is cash flow insolvent (or facing a liquidity crisis), but is potentially balance sheet solvent, equity investors may have a meaningful economic interest.

There was little information available at the outset of these proceedings about whether the Angus A2A Group was balance sheet solvent, but there were no secured creditors, and unsecured creditor claims were expected to be insubstantial. In the unusual circumstances of this case, the equity investors were found to qualify as “interested persons,” entitled to apply for the Initial Order.

2) Can CCAA relief extend to foreign companies with no business or assets in Canada?

The CCAA states that it applies in respect of a “debtor company,” defined as a company that, among other things, is either incorporated in Canada or has assets or is doing business in Canada. The Texas LLCs did not independently meet this definition.

Nevertheless, the ABCA held that there was authority to subject the Texas LLCs to the Initial Order because of their close connections to the Canadian entities and the broad discretionary authority afforded to a CCAA court. Importantly, the Court held that section 3(1) of the CCAA, which states that the CCAA applies “in respect of a debtor company,” is a trigger to — not a limit on — the Court’s authority.

In other words, once the statutory threshold is met in respect of at least one debtor company, the Court may, where appropriate, exercise its discretionary authority to include closely connected entities in the proceedings, even if those entities would not independently qualify as “debtor companies” under the CCAA.

The Court declined to specify all of the factors governing when non-debtor entities may be subject to CCAA proceedings, but emphasized that, at a minimum, a non-debtor entity must be integrally and closely related to the debtor companies’ business such that the non-debtor company’s inclusion in the proceedings is necessary to achieve the remedial purposes of the proceeding.

While there are several cases in which courts have included entities that do not meet the definition of “debtor company” in CCAA proceedings in certain respects (for example, by extending the stay of proceedings to non-debtor entities like partnerships), the Court observed that there were no prior reported decisions in which a court granted a “super monitor” enhanced powers to manage the business and control the assets of non-debtor entities, much less foreign companies with no independent Canadian nexus.

3) Can solvent entities be subject to CCAA proceedings?

The Canadian entities in the Angus A2A Group argued that the Initial Order should not have applied to them because they were not independently insolvent. Insolvency is another requirement under the definition of a “debtor company” in the CCAA, making this argument conceptually similar to the argument advanced by the Texas LLCs regarding Canadian nexus.

For substantially the same reasons discussed above, the Court held that once the threshold for the application of the CCAA is met, there is authority to bind non-debtor companies, including solvent entities, where appropriate in the circumstances.

The ABCA also considered whether insolvency must be assessed by considering one company’s assets and liabilities in isolation, or whether a company may be treated as insolvent if it forms part of a group that is collectively insolvent. The Court confirmed that insolvency may, in appropriate circumstances, be assessed on a collective basis, and held that the intertwined nature of the companies in this case justified that approach.

Interestingly, the decision reflects a notably flexible and enterprise-focused approach to the statutory “debtor company” analysis. The Texas LLCs did not independently possess a qualifying Canadian nexus, while the Canadian entities were not shown to be individually insolvent. Nevertheless, the ABCA upheld the proceedings based on the integrated nature of the group and the court’s broad authority to advance the CCAA’s remedial objectives.

Key Takeaways

The decision is a significant development in the evolving jurisprudence regarding the extent to which CCAA relief may affect foreign and solvent non-debtor entities that are closely integrated in an insolvent group.

Additionally, this decision may broaden the parties that will seek to commence CCAA proceedings. Contrary to its title, the Companies’ Creditors Arrangement Act is not only available to debtor companies and their creditors, in appropriate circumstances.

An applicant must demonstrate a financial interest in the outcome of the proceedings, which may place meaningful limits on who qualifies as an “interested person.” However, it remains to be seen how flexibly the courts will interpret that threshold in future cases. Where equity investors or other non-creditor stakeholders have a plausible economic interest in the restructuring outcome, they may be entitled to commence CCAA proceedings in appropriate circumstances.

For more information, please contact the authors or any other members of our Restructuring & Insolvency group.