An Ontario Superior Court judge is now mulling which rival group of class action lawyers should lead the fight on behalf of burned investors who lost billions of dollars in scandal-plagued Sino-Forest Corp. Justice Paul Perell reserved judgment on Wednesday, after hearing arguments from some of the country’s most prominent class-action lawyers competing for the case against Sino-Forest, which has defaulted on its debts and could be tipped into insolvency.
Some lawyers at the hearing were eager for a quick ruling, with the shadow of possible bankruptcy proceedings for Sino-Forest looming. Judge Perell did not say when he would rule, but suggested it would not be this week: “I don’t think I will have a Christmas present for anybody.”
In a series of questions from the bench, Judge Perell made it clear he was actively considering an order – unprecedented in Canada – that could force the law firms to work together, rather than handing the massive case to just one of them.
The battle to lead the class-action lawsuit against Sino-Forest and its big-name auditors and underwriters pits three rival teams of law firms against each other in what is known as a carriage fight. The firms all filed their own separate lawsuits on behalf of investors in the wake of the fraud allegations that sank the forestry company’s stock this year. But only one class action can be allowed to proceed.
The case could be the largest and highest-profile shareholder class-action in Canadian history. None of the allegations in the lawsuits have been proven.
Often carriage fights like this are avoided as the small group of firms that specialize in class actions in Canada agree to work together. But no such deal was made on this case, forcing a courtroom battle that began Tuesday.
Fighting for the case are Kim Orr Barristers P.C., whose clients include the B.C. Investment Management Corp. pension fund; a team made up of lawyers from Siskinds LLP and Koskie Minsky LLP; and Rochon Genova LLP. All three groups also have affiliations with U.S. class-action law firms.
In the hearing, lawyers told the judge about the investigations they have conducted into Sino-Forest, their firms’ experience on big cases, as well as argued about the various differences between the three lawsuits.