A publicly listed REIT carrying roughly $1 billion in defaulted debt completed a restructuring through a CBCA plan of arrangement without ever filing for CCAA protection. The decision in Re Ravelin Properties REIT, 2026 ONSC 3186 [Ravelin] demonstrates that corporate law tools and insolvency proceedings exist as part of an integrated restructuring toolkit. This should prompt boards and advisors to rethink the timing and strategy of restructurings for distressed public companies.
The decision matters for two reasons. First, it demonstrates that corporate law mechanisms, specifically CBCA plans of arrangement, can serve as practical restructuring tools for financially distressed issuers. Second, applying the Supreme Court of Canada’s reasoning in Lundin Mining Corp. v. Markowich, 2025 SCC 39, the Ontario Superior Court of Justice (the “Court”) confirmed that confidential restructuring negotiations do not necessarily trigger material change disclosure obligations, a point of real significance for any public company navigating these sensitive strategic negotiations.
What happened in Ravelin? Financial distress without insolvency
Ravelin concerned an application approving a plan of arrangement regarding Ravelin Properties REIT (“Ravelin”), a publicly listed REIT which faced approximately $1 billion of debt, much of which was in default, following sustained challenges in the office real estate market. At the time of the application, Ravelin had protection from enforcement in the form of a standstill agreement.
The REIT’s financial difficulties were no secret. As early as 2024, Ravelin had publicly disclosed its concerns about operating on a going-concern basis. The REIT had, since June 2024, been evaluating strategic alternatives and established an independent Special Committee to oversee the process. It retained financial and legal advisors to assist in assessing refinancing opportunities, asset sales, equity recapitalizations, and broader restructuring alternatives.[1]
In January 2026, Ravelin was approached by Clarke Inc. with an unsolicited, non-binding proposal regarding a potential transaction which would involve unitholders and debenture holders of Ravelin receiving shares in Clarke. The financial and legal advisors of the Special Committee evaluated Clarke’s proposal, and in March 2026, Ravelin entered into the Arrangement Agreement. KSV, the financial advisor to the Special Committee, opined that the transaction was financially fair to the unitholders and offered to the debenture holders value in excess of the recoveries they would likely receive upon any liquidation.[2] The arrangement received overwhelming stakeholder support.[3]
At the trial of the application, Mr. Courcy, a debenture holder who voted in favour of the arrangement, raised a complaint. He alleged that Ravelin had failed its duty to make timely disclosure of material changes when it did not disclose the negotiations between itself and Clarke Inc. in relation to the proposed arrangement when it put out a press release in February 2026.[4] Ultimately, Ravelin received Court approval for the plan of arrangement and the Court found no material change existed requiring disclosure.
As further discussed below, the Ravelin decision is notable from a restructuring standpoint and from a securities law perspective.
CBCA plan of arrangement vs. CCAA: Key differences
| CBCA plan of arrangement | CCAA proceeding |
|---|---|
| Purpose: Allows a solvent corporation to implement a significant corporate transaction through a court-supervised process. The mechanism is flexible and can be used for mergers, acquisitions, going-private transactions and other complex reorganizations that may not fit within the CBCA‘s ordinary procedures. | Purpose: The overarching objective is to preserve enterprise value and maximize recoveries for stakeholders of an insolvent company. A debtor company uses the CCAA to obtain protection from creditors while it restructures its liabilities, operations, or capital structure. |
| Solvency requirement: The corporation must be solvent and demonstrate that it is not practicable to complete the transaction under another provision of the CBCA.[5] | Solvency requirement: Designed for companies facing insolvency.[6] |
| Court involvement: The focus of the court’s review is whether the arrangement has a valid business purpose and is fair and reasonable to affected stakeholders.[7] A CBCA arrangement is usually a relatively discrete transaction with two principal court hearings: an interim hearing to establish the voting process; and a final hearing to determine whether the arrangement is fair and reasonable. Once shareholders approve and the court grants the final order, the transaction can be implemented. | Court involvement: The CCAA provides for a court-supervised restructuring process in which the court exercises ongoing oversight, typically over a period of months, through, among other things: granting stay orders to prevent creditor enforcement; appointing a monitor to oversee and report on the debtor’s affairs; approving debtor-in-possession (DIP) financing, claims procedures, and asset sales; andsupervising the process through which the debtor and its stakeholders negotiate a restructuring solution. |
| Key stakeholders: The primary constituency is typically shareholders, although creditors and other securityholders may also be affected and entitled to notice or voting rights. | Key stakeholders: Creditors are generally the central stakeholders because the proceeding is intended to address insolvency-related claims and liabilities. |
| Debtor protections: None. | Debtor protections: Full toolkit (see: Advantages). |
| Advantages: More efficient and less disruptive than formal insolvency proceedings. Avoids the cost and extensive court oversight associated with CCAA. Flexible mechanism for balance sheet recapitalizations, debt exchanges, and consensual restructurings. | Advantages: Comprehensive debtor protections including automatic stay of proceedings. Access to DIP financing. Effective for cross-border restructurings and multi-class creditor negotiations. |
| Limitations: Issuer must remain solvent: no access if liquidity crisis is severe. No stay of proceedings to halt creditor enforcement during the transaction. | Limitations: Significant cost, months of court supervision, monitor fees, and advisory expenses. Disruptive to operations, reputation, and stakeholder confidence. |
As a result, where a company requires creditor protection and a comprehensive restructuring of its liabilities, the CCAA will generally be the more appropriate framework; however, where the objective is to implement a consensual restructuring or other significant corporate transaction in a solvent context, a CBCA plan of arrangement may provide a flexible and effective alternative.
When is CCAA still necessary?
Not every distressed public company can avoid insolvency proceedings, and there remains an important role for the CCAA in the restructuring continuum. Corporate law solutions may prove insufficient where stakeholder support cannot be obtained or where the debtor must compromise multiple creditor classes. When an issuer is facing severe liquidity constraints, such as mounting operating losses, immediate cash needs, or a lack of access to capital markets, corporate restructuring tools may be insufficient to respond to the urgency of the situation. These tools also do not provide debtor protections commonly available in formal insolvency proceedings, such as a stay of proceedings or access to debtor-in-possession (DIP) financing. In addition, cross-border restructurings may require the additional powers and protections available under the CCAA framework.
The key takeaway for advisors is not that corporate law tools are a substitute for insolvency proceedings. Rather, they should be viewed as part of a comprehensive restructuring strategy. The experience of Ravelin demonstrates that proactive governance, strategic planning, and timely use of corporate law mechanisms can create meaningful opportunities to preserve value before a formal insolvency filing becomes necessary.
Do restructuring negotiations trigger disclosure obligations?
Ravelin is significant as a securities law decision. The company had pursued a lengthy strategic review culminating in a CBCA arrangement, and the Court was required to consider whether confidential negotiations with Clarke should have been disclosed earlier under applicable material change requirements.
The Supreme Court of Canada’s decision in Lundin Mining provides the analytical framework for assessing disclosure obligations for public companies. We have previously examined the Supreme Court’s decision in Lundin Mining and its reformulation of the material change analysis for public issuers. While the Supreme Court emphasized that the concept of a “material change” must be interpreted broadly and contextually, it also confirmed that “negotiations and internal deliberations, without more, will not usually amount to a change in the business, operations or capital of an issuer.”[8]
The Ravelin decision applies the reasoning in Lundin Mining, which recognized that disclosure obligations must be assessed in light of the realities of complex corporate transactions and evolving negotiations. The Court in Ravelin recognized that restructuring transactions remain uncertain until they are finalized and that confidentiality is often critical to maximizing value. By confirming that sensitive restructuring negotiations do not necessarily require immediate public disclosure, the Court recognized that premature disclosure can jeopardize the very transactions intended to preserve enterprise value and maximize stakeholder outcomes. This supports the contextual approach to material change analysis articulated in Lundin Mining.[9]
Conclusion
Corporate law tools and insolvency proceedings should be viewed as part of a continuum, not mutually exclusive options. In Ravelin, rather than moving directly from financial distress into a formal insolvency proceeding, Ravelin spent a prolonged period using corporate-governance and restructuring mechanisms to address its problems before ultimately implementing a court-approved arrangement under the CBCA.This emerging “restructure before insolvency” model recognizes that corporate law and insolvency law are not mutually exclusive alternatives but rather complementary tools that exist along a restructuring continuum.
Ravelin ought to provide reassurance to public companies that negotiations, which are often the crux of restructuring efforts and inherently sensitive in nature, may proceed on a confidential basis unless and until they crystallize into a material change requiring disclosure. At the same time, issuers should communicate clearly with the market about their circumstances and ensure that robust governance processes, including independent special committees, are in place throughout the process.
Miller Thomson’s Capital Markets & Securities lawyers and Restructuring & Insolvency lawyers work together to help public companies navigate financial distress across the restructuring continuum. We advise boards, special committees, management teams, investors, and creditors on strategic transactions, recapitalizations, plans of arrangement, governance matters, disclosure obligations, and formal insolvency proceedings. Whether the goal is to implement a proactive restructuring, evaluate CCAA alternatives, or prepare for a court-supervised process, our cross-practice team can help companies preserve value and manage risk.
[1] Re Ravelin Properties REIT and 17732571 Canada Inc., 2026 ONSC 3186 [Ravelin] at paras 1-8.
[5] CBCA, ss. 192(2) and (3); for discussion on parameters of the solvency requirement, see Innovation, Science and Economic Development Canada, “Policy on Arrangements – Canada Business Corporations Act, Section 192”, s. 2(a).
[6] Companies’ Creditors Arrangement Act, RSC, 1985, c C-36, s. 2(1), definition of “debtor company”.
[7] BCE Inc. v. 1976 Debentureholders, 2008 SCC 69 at para 143.
[8] Lundin Mining Corp. v. Markowich, 2025 SCC 39 at paras 59 and 96.
