AlphaBow: the monitor's questions wait for the Court of Appeal

The schedule attached to the monitor's letter of July 13 runs to seven lettered parts. The first asks for bank statements since January 1, 2024 of 1986114 Alberta Inc., AlphaBow Energy Ltd.'s controlling shareholder, of Kananaski Capital Limited, and of the addressee personally, so far as they dealt with money from AlphaBow, and for records identifying "the present location, disposition, or use" of the proceeds of a $10,000,000 bank draft dated January 20, 2025 and payable to 1986114 Alberta Inc. Later parts want every record behind that draft, the native files of the cash position reports AlphaBow gave the monitor, "including metadata and revision history," and WeChat, Signal and WhatsApp messages about the draft and the reporting. Item 16 asks for "A written response setting out your position regarding the Allegations described in the Fourteenth Report." Cassels Brock & Blackwell LLP, counsel to the monitor, AlixPartners Restructuring, Inc., sent the letter to counsel for Ben Li, AlphaBow's former director, with a notice of an appointment for questioning later that month, per the Fifteenth Report of the Monitor, Aug. 20, 2026, para. 2.2(1), Apps. A–B.

Four days later Mr. Li's counsel applied to the Court of Appeal of Alberta. On August 14, in Alixpartners Restructuring, Inc v Li, 2026 ABCA 269, Justice Jane Fagnan granted him permission, in part, to appeal the two orders under which the letter was sent, and stayed the production and examination powers in them, as they relate to him, until the appeal is decided. The monitor has put off the questioning and paused its efforts to have him answer the request, per the Fifteenth Report, Aug. 20, 2026, paras. 2.2(3)–(5).

When this case was last reported here, on July 2, the monitor had obtained from BMO a statement showing $4,076.87 in an account it had expected to hold about $9 million, per the Fourteenth Report of the Monitor, June 24, 2026, para. 3.2(1), and the court had granted the powers now under appeal.

The orders, and the police

The powers came in two orders of Justice Kuntz. The first, pronounced June 26, took all power to manage AlphaBow away from its current and former directors and officers and gave the monitor sixteen enhanced powers, lettered (a) to (p). Paragraph 5(m) lets the monitor compel anyone with books, records or correspondence "relating to the Allegations, the Property and any and all transactions leading to the defalcation of the Property" to produce them within fifteen days of a request, per the Order for Enhancement of Monitor's Powers and Stay Extension, June 26, 2026, paras. 5(m), 14.

The second, pronounced June 30 on the provisions she had reserved, authorizes investigations, including examinations under oath of any person the monitor believes, acting reasonably, has information about the allegations. Subject to s. 5(2) of the Canada Evidence Act, no one examined "shall be excused from answering any question on the ground that the answer to the question may tend to incriminate such Person." Current and former directors, officers and shareholders must cooperate, and any report of the investigation's results goes to the court sealed, per the Order for Enhancement of Monitor's Powers and Stay Extension, June 30, 2026, paras. 3, 5, 7–9.

Both orders were made on the monitor's Fourteenth Report. On June 22, that report said, the monitor received notice that the Calgary Police Service was aware of the allegations and "requested evidence to identify if a criminal offence has occurred. The Monitor intends to provide the CPS with a copy of this Fourteenth Report and to cooperate, in full, with its investigation," per the Fourteenth Report of the Monitor, June 24, 2026, para. 3.3(1). Justice Fagnan sets that paragraph out in her reasons, which open by describing orders that "granted wide investigative powers to the Monitor following commencement of an active Calgary Police Service criminal investigation into the former director of Alphabow, and the Monitor's assertion that it would cooperate fully with the police," per 2026 ABCA 269, Aug. 14, 2026, paras. 1, 4 (Fifteenth Report, App. E).

The allegations reached the monitor from a third party in June; its own preliminary conclusion, restated in the Fifteenth Report, is that approximately $9 million was wrongfully withdrawn from the company's bank account and concealed from it. No court has determined any of it, per the Fifteenth Report, Aug. 20, 2026, para. 2.1(1)–(2).

Mr. Li's grounds

His counsel had objected on June 26 that the production and questioning provisions would permit a breach of his rights under ss. 7 and 8 of the Charter. As Justice Fagnan summarizes the oral reasons of June 30, Justice Kuntz relied on R v Jarvis, 2002 SCC 73, to find that the investigation had no predominant purpose of determining penal or criminal liability, which the monitor's plan to cooperate with the police did not change; the responsibility for acting within the Charter lay with the police, and s. 5 of the Canada Evidence Act and s. 13 of the Charter answered his concerns, per 2026 ABCA 269, paras. 5–7.

His application for permission, filed July 17 and relying on ss. 7, 8 and 11(d) of the Charter, attacks those findings and says the orders were overbroad. Among its procedural complaints about the June 26 hearing are that his counsel was not permitted to make three of four submissions and was refused written argument. On significance to the practice, it says: "Counsel could locate no reported decision where a superior court in Alberta has granted a monitor such wide investigatory powers pursuant to the CCAA during an active police criminal investigation and in which the monitor has advised the court that it will assist in the police investigation." An appeal, it argues, would have "serious ramifications" for his constitutional rights and only a relatively narrow effect on the CCAA proceedings, per the Application of Ben Li for Permission to Appeal, July 17, 2026, paras. 6–8, 10, 12, 14–15, 23 (Fifteenth Report, App. D). The application concerns the reach of the orders; it does not engage with the monitor's conclusions about the money.

What the Court of Appeal decided

Justice Fagnan found a non-frivolous issue in whether the chambers judge had considered all the factors in para. 94 of Jarvis on predominant purpose. Jarvis concerned different branches of one state agency, and the monitor is part of none; the chambers judge had not referred to the case law on third parties enlisted as agents of law enforcement, "an area of the law that continues to develop," citing R v Pham, 2025 BCCA 324, in which the Supreme Court of Canada has granted leave. The monitor, unlike other third parties, is an officer of the court with duties under s. 23 of the CCAA, and the court was asked to authorize its broad investigative powers while the police had an active investigation and had asked it for evidence, and after it had said it would cooperate fully, per 2026 ABCA 269, paras. 11–15.