The Just for Laughs Group and its affiliates in their restructuring proceedings and successful sale under the Companies’ Creditors Arrangement Act

Founded in Montréal, Québec, in 1983, the Just For Laughs Group (JFL Group) is an international entertainment media company and an industry leader in the world of comedy formed of various for-profit and not-for-profit entities. In March 2024, the JFL Group obtained creditor protection under the Companies’ Creditors Arrangement Act (CCAA). Given the JFL Group’s urgent financial difficulties, an expedited and robust sale and investment solicitation process was initiated to preserve the going-concern value of the business.

Ultimately, the sale process resulted in the acceptance of a bid made by ComediHa!, a local competitor of the JFL Group. The transaction was structured as a hybrid asset and share deal, in which the purchaser obtained substantially all the assets of the JFL Group, the equity interests in certain of the for-profit entities as well as the controlling interest in the not-for-profit entities. This represented a novel deal structure, particularly with regards to transfer of the not-for-profit entities, as it allowed the purchaser to continue benefiting from the debtors’ complex distribution network (formed of thousands of distribution agreements around the world), transition the ownership of intellectual property dating back over 20 years and formed of thousands of agreements with creators and rights holders, as well as the tax credits and subsidies associated with operating the comedy festivals, notably the flagship Montréal Just For Laughs festival.

A court vesting order approving the transaction was secured, and the transaction closed in June 2024. Overall, this transaction was a major success as it allowed certain entities of the JFL Group to emerge from CCAA protection, remain headquartered in Québec, Canada, and preserve the goodwill associated with this iconic player in the entertainment sector.

Osler, Hoskin & Harcourt LLP advised the Just for Laughs Group with a team consisting of Sandra Abitan, Ilia Kravtsov and Jack M. Little (Insolvency and Restructuring).