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In April 2011, Siskinds LLP, acting on behalf of two investors in Canada Lithium Corp. (“CLQ”, now known as RB Energy Inc., and Énergie RB Inc. in its French form) commenced a class action in the Ontario Superior Court of Justice alleging misrepresentations, in disclosure and offering documents, as to material scientific and technical information underlying a mineral resource estimate, contrary to the Canadian Securities Administrators’ National Instrument 43-101, Standards of Disclosure for Mineral Projects and Parts XXIII and XXIII.1 of the Ontario Securities Act.

On November 28, 2016, the Ontario Superior Court of Justice approved a settlement of the class action in the amount of CAD $400,000. The primary reason for the settlement was the insolvency of the RB group of companies.

The settlement amount is insufficient for distribution to class members; and, as such, there will not be a distribution.

As set out in the settlement approval order, in conjuction with the settlement:

  • the class action has been dismissed;
  • CLQ and the individual defendants have been released from the claims in the class action and released from the possibility of any further claims relating to the matters at issue or that could have been at issue in the class action; and
  • class counsel fees of CAD $400,000 were awarded.

The Ontario Superior Court of Justice has approved a form of notice, through which class members can access the Court’s order, the Court’s reasons for decision and the materials the representative plaintiffs relied on to support the settlement approval, dismissal and the award of class counsel fees. The notice can be found here.

Developments

Proceedings under the Companies' Creditors Arrangement Act and Bankruptcy and Insolvency Act

In October 2014, CLQ obtained creditor protection, under the Companies’ Creditors and Arrangements Act, from the Québec Superior Court (Commercial Division, Montreal). A plan of compromise under the CCAA was not achieved to the benefit of CLQ, nor did a sales and investor solicitation process generate any offers. CLQ and its related entities then transitioned from CCAA protection to a receivership under the Bankruptcy and Insolvency Act.

Proceedings under the Companies' Creditors Arrangement Act and Bankruptcy and Insolvency Act

In October 2014, CLQ obtained creditor protection, under the Companies’ Creditors and Arrangements Act, from the Québec Superior Court (Commercial Division, Montreal). A plan of compromise under the CCAA was not achieved to the benefit of CLQ, nor did a sales and investor solicitation process generate any offers. CLQ and its related entities then transitioned from CCAA protection to a receivership under the Bankruptcy and Insolvency Act.