Former Coopers & Lybrand Loses Another Round in Court

Quebec Court of Appeal upholds 2011 decision finding Coopers liable for Castor Holdings audits

MONTREAL, July 9, 2013 /CNW Telbec/ - Creditors involved in Canada's longest running and largest auditors' negligence case are one step closer to seeing some of their losses repaid. Castor Holdings Ltd. ("Castor") a real estate investment company, was declared bankrupt in 1992 leaving $1.6 billion in debt. Richter was named as Trustee representing the creditors.

The Quebec Court of Appeal has substantially upheld the April 2011 decision of the Quebec Superior Court against Castor's auditors, Coopers & Lybrand ("Coopers").  The Superior Court found that the audited financial statements, upon which investors relied, were materially misleading. The Quebec Court of Appeal maintained the liability of Coopers as a firm and on a joint basis with respect to all of its individual Partners personally across Canada.

They have been condemned to pay millions to the estate of one investor.  Avram Fishman, a Partner with Montreal law firm, Fishman Flanz Meland Paquin, which has represented the Plaintiff said "the findings of the Court are also applicable and binding on all pending cases against Coopers in the aggregate amount of well over $1 billion."

Subsequent to the legal proceedings being taken against Coopers, it entered into a de facto merger with Pricewaterhouse, creating PricewaterhouseCoopers (PwC).  The Trustee in the Castor case has also instituted proceedings against PwC for failing to respect certain provisions of the Quebec Civil Code relating to "bulk sales".  These proceedings have yet to be heard, but if successful may render PwC responsible for a significant portion of Coopers' liabilities. PwC has already failed in its attempt to have the case transferred from Quebec to Ontario.

Attorney, Avram Fishman stated, "We are hopeful that this Court of Appeal Judgment will finally result in a substantial recovery in the very near future for the many creditors affected."

SOURCE: Richter

Rick Leckner
MaisonBrison Communications
514.731.0000

Me Avram Fishman
Fishman Flanz Meland Paquin LLP
514.932.4100