Employee terminations and downsizing are features of most restructurings. While employees can typically assert a claim in the insolvency process, parallel claims and complaints with labour relations regulators and tribunals are relatively common. In a recent judgment, the Superior Court of Québec clarified that all employee claims can be extinguished through a plan of arrangement under the Companies’ Creditors Arrangement Act (CCAA), including those filed before regulators and tribunals.

On April 1, 2021, the Supreme Court of Canada dismissed an application for leave to appeal the decision of the Court of Appeal of Québec (QCA) in Séquestre de Media5 Corporation, 2020 QCCA 943, which had put an end to a long-lasting debate on the availability of ‘national’ receivers to Québec secured creditors. The decision of the QCA is now final.

On July 20, 2020, the Court of Appeal of Québec (the QCA) released its reasons in Séquestre de Media5 Corporation,^[1] putting an end to a long-lasting debate on the availability of national receivers to Québec secured creditors.

On May 21, 2020, the Québec Court of Appeal (QCA) released its reasons in Arrangement relatif à 9323-7055 Québec inc. (Aquadis International Inc.)^[1](the Aquadis case).

In April 2011, the Ontario Court of Appeal rendered a unanimous judgment in Re Indalex Limited which ordered that the amount the debtor was required to contribute towards its pension plan wind up deficiency be paid in higher priority to repayments to its DIP lender. This judgment was a surprise to the legal community. Leave to appeal has since been granted by the Supreme Court of Canada. In November 2011, groups of White Birch employees and retirees (referred to below as employees) filed motions seeking the application of the legal findings of Indalex to White Birch.

On March 22, 2010, the Superior Court of Quebec approved a plan of arrangement under the Canada Business Corporations Act (the CBCA) that allowed a corporation, MEGA Brands Inc., to achieve a worldwide restructuring of its business under a corporate statute, rather than a more typical insolvency and restructuring statute like the Companies Creditors’ Arrangement Act.

On September 18, 2009, the Federal Government proclaimed into force the remaining amendments to the Bankruptcy and Insolvency Act (BIA) and theCompanies’ Creditors Arrangement Act (CCAA). (A few provisions which are rendered moot, presumably deemed unnecessary or are amendments intended to coordinate the inter-governmental flow of information have not been proclaimed into force.) Some of the key changes to the BIA and the CCAA which we anticipate will considerably impact current Canadian insolvency practice are discussed below.

Canada’s insolvency and restructuring regime consists primarily of two separate statutes that have been substantially amended in recent years to align their restructuring provisions. Despite some similarities with its U.S. counterpart, the amended Canadian regime remains distinct.