Borrelli (as Trustee of the SFC Litigation Trust) v. Chan

2018 ONSC 1429; 2019 ONCA 525; 2020 SCC 38733

"[Mr.] Steger … calculate[d] Sino-Forest’s loss at $2.627 billion … I assess damages in the amount of $2,627,478,000."

- Judgment in 2018 ONSC 1429
Major damages assessment involving the defunct Sino-Forest Corporation and losses suffered as a result of fraudulent schemes orchestrated by the company’s former CEO.

This action involved the aftermath of the 2011 collapse of Sino-Forest Corporation, once a high-flying listing on the TSX having a market cap of CAD $6 billion. The company had purported forestry and other interests in Canada, China, Hong Kong, Russia and elsewhere. The Trustee of the SFC Litigation Trust sued the former CEO of the company for civil fraud and breach of fiduciary duty.

CHS was retained by Counsel for the Trustee as financial expert to quantify the losses suffered by the company as the difference between: (i) the cash Sino-Forest raised from the debt and equity raises and (ii) the actual cash recoveries from the sale of Sino-Forest’s assets. An alternative damages calculation was also presented related to the write-downs of Sino-Forest’s inflated assets.

The trial judge accepted CHS’s loss quantification findings, which were also upheld on appeal, culminating in one of Canada’s largest damages award of USD $2.6 billion.

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