Alberta court confirms CCAA power to release directors from excise tax liability – LAW360 Alberta court confirms CCAA power to release directors from excise tax liability – LAW360

The recent decision of the Alberta Court of King’s Bench to release corporate directors from personal liability for unpaid excise taxes was a positive outcome for all concerned, says Randal Van de Mosselaer, partner, Insolvency and Restructuring, in an interview with LAW360.

The court granted releases that will shield directors of Alberta-based Freedom Cannabis Inc. from liability for unpaid excise duties of $9.7 million and approved the implementation of a reverse vesting order (RVO) as part of the company’s restructuring plan.

A stalking horse bid was advanced that included the retention of desired assets and contracts and the vesting out of unwanted liabilities to a newly created company. The proposed transaction was intended to enable Freedom to continue doing business under new owners.

The Canada Revenue Agency did not object to the RVO but argued that the court did not have jurisdiction to grant directors’ releases in respect of unpaid excise duty. The Alberta Court of King’s Bench concluded that it did have the authority to grant releases to the directors of Freedom and, more specifically, with regard to their liability. The directors were granted releases as part of the stalking horse agreement and the RVO.

“We were pleased to be able to achieve a going-concern outcome for our client, and in the process preserve jobs for employees and value in the business, which will benefit the company and all of its many stakeholders,” says Randal, who acted on behalf of Freedom. Associate Stephen Kroeger, Insolvency and Restructuring, also acted as counsel for the Osler client.

Read the full article by author Karunjit Singh posted on May 7, 2025.