Section 11.01 of the CCAA: Equipment Lessors Beware

In the recent Companies’ Creditors Arrangement Act (“CCAA”) proceedings of Cow Harbour Construction Ltd., the characterization of numerous leases, for the purposes of section 11.01 of the CCAA, was in dispute. The leading case on this issue is Smith Brothers Contracting Ltd., Re, a decision rendered by Justice Bauman of the British Columbia Supreme Court. Since 1998, Smith Brothers has frequently been cited as the leading decision respecting the interpretation of section 11.01 of the CCAA.