Canada

While the overall risk to Canada’s financial system has declined for the first time in two years, closer to home the Bank of Canada continues to be concerned about household debt and housing, The Wall Street Journal Real Time Canada blog reported.

Homburg Invest Inc. is suing several companies chaired by Richard Homburg, its former chairman, for $2,895,000, The Chronicle Herald reported. According to court documents, Homburg Invest is undergoing insolvency restructuring under the protection of the Companies’ Creditors Arrangement Act, with proceedings in the Superior Court of Quebec. As part of that restructuring, the plaintiff divested certain U.S. assets, with limited assistance from Homburg Realty Service, whose parent, according to court documents, is Homburg Canada, now Citadel Holdings.

The court-appointed monitor for struggling Canadian wireless startup Mobilicity has extended the deadline for suitors to bid for the company by a week to Dec. 16, a regulatory filing shows, Reuters reported. Bidders for the Toronto-based startup, which filed for court protection from its creditors earlier this year, now have until noon next Monday to submit their offers in the court-supervised auction, according to a document posted on the website of monitor Ernst & Young Inc. Ernst & Young said it extended the deadline following requests from several bidders.

The fight over defunct Nortel Networks' $7.5 billion in cash will be decided in joint U.S.-Canadian court hearings and not in arbitration, a U.S. appeals court ruled on Friday. The U.S. Court of Appeals for the Third Circuit in Philadelphia upheld a bankruptcy court ruling in March that there was never an agreement to use arbitration to divide the pile of cash among various Nortel estates around the world. Nortel sought protection from creditors in courts around the world in 2009 and its businesses were quickly sold, reducing a once-global corporate giant to little more than a pile of cash.

Fees paid to lawyers and other professionals working on the ongoing bankruptcy proceedings of Nortel Networks Corp. have passed the $1 billion US mark. That's outraged former Nortel employees who saw their long-term disability benefits cut after the company went under, CBC.ca reported. Ernst & Young, the firm hired by the Ontario Superior Court to be the Canadian Companies' Creditors Arrangement Act (CCAA) monitor is already projecting another $47 million US of professional fees from this past October until February 1, 2014.

The OECD, the international body that ranked Canada’s housing market as among the world’s frothiest, warned today of the threat of a “disorderly correction” in prices given the record debt burden among Canadian families, The Globe and Mail reported. In its semi-annual economic outlook, the 34-country group said the market will probably weaken “since the housing stock seems greater than underlying demand,” but that the federal government may be forced to intervene again should price pressures emerge.

Finding a new partner to develop the $1-billion Capital City Centre, selling off a handful of properties and drastically cutting back operations are all part of a plan to pull the League group of companies out of creditor protection as a going concern, the Times Colonist reported. That was the game plan expected to be unveiled in court in Vancouver today as the League group petitioned to extend the protection it has been granted under the Companies’ Creditors Arrangement Act and extend the debtor-in-possession financing it requires to run day-to-day operations.

The Texas-based developers of a proposed liquefied natural-gas export terminal in Canada have sought a court-sanctioned reorganization to resolve disputes with other investors in the project, including a Chinese energy company, according to court documents reviewed by The Wall Street Journal. While the proposed Douglas Channel LNG project is much smaller than other LNG projects planned for the Pacific coast, the filing in Canada under the Companies' Creditors Arrangement Act—which is analogous to a Chapter 11 filing—by one of the project's key backers comes as western Canada aims to b

The Land Conservancy of B.C. can no longer pay its bills and has been granted protection under the Companies' Creditors Arrangement Act by the B.C. Supreme Court, The Vancouver Sun reported. The 17-year-old non-profit organization - which controls numerous landmark provincial properties - says in court documents there are more than 200 secured and unsecured creditors with claims against it totalling $7.5 million. Without the court's support, the group said it would be unable to meet its payroll next Monday.

Small wireless carrier Mobilicity says it has been granted creditor protection by the courts while awaiting a ruling from Industry Canada on an unspecified transaction, CBC News reported. Mobilicity, which has been looking for a buyer, said Monday that creditor protection would give it the necessary time and financing to complete the transaction now before the federal body for review and approval. The Toronto company, which launched in 2010, provided no details about the transaction, but said it was in the best interests of its stakeholders.