Companies restructuring under the Companies’ Creditors Arrangement Act (“CCAA”) depend on a supply of critical products and services in order to continue operations during the proceedings. An interruption in the supply of such goods and services would likely be fatal to any restructuring. Prior to 2009, the CCAA was silent about how the post-filing supply of such goods and services was to be obtained. The CCAA provided only that a supplier could not be forced to supply on credit.

In Re LightSquared LP, the Ontario Court of Superior Justice [Commercial List] (the “Canadian Court”) refined the test for determining the location of a debtor’s center of main interest (“COMI”) under Part IV of the Companies’ Creditors Arrangement Act (the “CCAA”), which is the Canadian equivalent of Chapter 15 of the U.S. Bankruptcy Code.

Synopsis

In the latest decision of the British Columbia Supreme Court (the “Court”) regarding the bankruptcy of Ted LeRoy Trucking Ltd. (“TLT”), the Court found that unpaid remittances owed by TLT to third party benefit providers constituted “wages” within the meaning of the Bankruptcy and Insolvency Act (“BIA). This entitled the benefit providers to super priority secured status in the bankruptcy of TLT.

The Facts

Interim Financing Under the CCAA and “Roll-ups”

In the latest decision of the British Columbia Supreme Court (the “Court”) regarding the bankruptcy of Ted LeRoy Trucking Ltd.

On Tuesday, June 5, 2012 the Supreme Court of Canada heard an appeal of the Ontario Court of Appeal’s decision in Re IndalexLimited (“Indalex”). The Indalex decision concerned, among other things, the priority of a deemed trust for certain unpaid pension amounts over the super-priority charge granted in favour of a DIP Lender.