On April 17, 2014, the Supreme Court of Canada denied leave to appeal to Nortel from the decision rendered by the Ontario Court of Appeal last October. For additional details and commentary on the decision of the Ontario Court of Appeal, please see our November 2013 Blakes Bulletin: Ontario Court of Appeal Applies AbitibiBowater Test in Concurrent Decisions.
Briere Sound Ltd. v. Briere, 2014 BCSC 417 (CanLII), decided March 17, 2014
A recent decision at the Ontario Superior Court of Justice (Commercial List) brought to the fore the role of fairness opinions in solvent arrangement transactions. In Re ChampionIron Mines Limited (Champion) the court approved the arrangement but deemed the fairness opinion inadmissible on the basis that it failed to disclose the reasons underlying its conclusion.
The Manitoba Court of Appeal will consider an interesting insolvency case involving hog feed suppliers who claim of priority for the cost of feed over Farm Credit Canada and Bank of Montreal, the hog producer’s secured creditors.
In general, the Court found Suppliers may have an unjust enrichment claim arising from an alleged fraud on the part of producer, who allegedly ordered feed while preparing for the Companies Creditors Arrangement Act (“CCAA”) application with no intention of paying for the feed.
The recent Court of Appeal case involving Topland Limited and Smiths News Trading Limited was a salutary lesson about the strict rules that protect guarantors and the perils of forgetting them. The facts of the case were relatively simple: Topland owned a commercial property, leased to the rather aptly named Payless DIY Ltd, which became insolvent. Topland brought a claim against the tenant’s guarantor, Smiths, for arrears of over £280,000 and required them to take a new lease for the remainder of the term.
When a Ponzi scheme collapses, as with musical chairs, there will be some investors with a place to sit, while others are bereft of such comfort.
Financiers and lenders to Canadian companies have become increasingly concerned about potential priorities of pension claims in Canada over the past year following the 1 February 2013 decision of the Supreme Court of Canada (SCC) in the Indalex case (Sun Indalex Finance, LLC v. United Steelworkers, 2013 SCC 6). Much of this concern may have been caused by conjecture as to how the SCC's decision would be applied in future insolvency proceedings, rather than the relatively narrow issue that was actually before the SCC in Indalex.
Today, the Supreme Court of Canada denied a group of investors leave to appeal the approval of a settlement releasing Ernst & Young LLP from any claims arising from its auditing of Sino-Forest Corporation. The settlement is part of Sino-Forest’s Plan of Compromise and Reorganization following a bankruptcy triggered by allegations of corporate fraud.
The Settlement
Norton Rose Fulbright’s Employment and Labour Team in Montréal raised a preliminary objection against an arbitrator’s jurisdiction on the basis of orders rendered pursuant to the Companies’ Creditors Arrangement Act (“CCAA“), which was upheld and led to the dismissal of the grievance.