Articles 2022

A legal review of the contemporary approach by Canadian courts in cross-border insolvency cases.

Matilda Lici of Aird and Berlis LLP discusses recent decisions from across Canada dealing with the appointment of representative counsel and the various factors that will inform a court’s exercise of discretion.

Spencer Jones of Lerners LLP summarizes a decision where the Ontario Court of Appeal considered the meaning of the term “debt or liability resulting from obtaining property or services by false pretences or fraudulent misrepresentation” and whether false statements made during a discovery in underlying litigation is included within this term.

In late 2019, section 18.6 of the Companies’ Creditors Arrangements Act and section 4.2 of the Bankruptcy and Insolvency Act were introduced, requiring all interested parties to a proceeding to act in good faith. The 2019 Amendments do not define “good faith” or provide specific remedies for a breach of it. Rather, the amendments provide the court with unfettered discretion to make any order it considers appropriate when a stakeholder breaches its good faith obligation.

Harte Gold Corp (Re) held that greater scrutiny should be exercised when deciding to grant an RVO, that RVOs should be considered an extraordinary measure. The impact of this case is that parties seeking approval for their RVO structure will be required to meet a higher evidentiary threshold, allowing a court to determine that their RVO structure is necessary, economical, and a viable alternative, that causes the least amount of harm to all stakeholders in comparison to alternate options.

Following the refinancing and repayment of first-ranking debt during a restructuring under the BIA, one of the subsidiaries in the debtor group, Down Under Pipe and Cable Locating Ltd., was solvent again, its only remaining creditor being a related party. Despite its return to solvency, Down Under still faced bankruptcy since the BIA prevents related parties from voting in favour of proposals.

The role played by the CCAA monitor in assisting the court as it shepherds along a corporate restructuring has evolved significantly over time. While still acting as the eyes of the court and standing apart from any particular stakeholder, recent developments in insolvency law have seen the monitor take on an increasingly active part in proceedings. The decision of the Québec Court of Appeal in Aquadis affirmed another such expansion of the monitor’s powers.

The purpose of this article is to determine the practical implications of the CCAA amendments on timeline of initial stay order and first-day relief. In doing so, the initial orders in Clover Leaf Holdings Company, Re, Lydian International Limited (Re), and Laurentian University of Sudbury will be briefly analysed and compared.

In this paper, the author argues that legislative reform is necessary to ease the impact of the treatment of divorcing spouses as unsecured creditors in a bankruptcy. Nadine Saba first provides an overview of the bankruptcy and family legislation, with a discussion of the seminal case law. She then discusses the feminization of poverty, and concludes with suggestions for legislative changes.

A link to the latest amendments to the Notice to the Profession - Toronto, which include updates to the Registrars in Bankruptcy section (Section F).