When can Environmental Regulatory Orders be Compromised Claims under the Companies’ Creditors Arrangement Act? Supreme Court of Canada Provides Clarification

In its recent decision, the Supreme Court of Canada held that claims in respect of provincial environmental clean-up orders can be compromised under the federal CCAA. While the Court disagreed on whether the particular facts warranted compromising the provincial remediation orders at issue, the majority concluded that claims in respect of the orders were compromised claims in the circumstances.
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Market Test Required for Plans Giving Equity to Insiders

In In the Matter of Castleton Plaza, LP,1 the Court of Appeals for the Seventh Circuit held that a new value plan that leaves creditor claims unpaid must be subjected to a market test if the new value is contributed by an insider. The decision by the Seventh Circuit expanded the competition requirement to insiders whether or not the insider is a holder of a claim or interest against the debtor. The Castleton decision could be read to be a substantial expansion of both the requirements of 1129(b)(2)(B) and the Supreme Court decision in Bank of America National Trust & Savings Ass’n v.
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Lock Up Your Creditors - Court Gives Broad Protection to Binding Plan Support Agreements

Rejecting the formalistic approach, the Delaware Bankruptcy Court in Indianapolis Downs, LLC focused on the policies underlying the idea of the disclosure statement to uphold a post-petition lock-up agreement, entered into before approval of a disclosure statement, with sophisticated financial players who had access to the material information that the disclosure statement would have provided.
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