During a bankruptcy or a restructuring, the goal of bankruptcy law is at odds with the goal of intellectual property law. Recent developments in bankruptcy law have sought to provide more certainty to licensees. However, there is still a lot of uncertainty.
The Ontario Superior Court of Justice (Commercial List) recently declined to grant a receivership order under section 243 of the Bankruptcy and Insolvency Act (Canada) (“BIA”) and s. 101 of the Courts of Justice Act (Ontario) (“CJA”) or to approve a proposed “quick flip” transaction among related companies on the basis of an insufficient evidentiary record. Insolvency practitioners should take note of this case, 9-Ball Interests Inc. v.
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
Prior to the 2009 amendments (the “Amendments”) to the Companies’ Creditors Arrangement Act (the “CCAA”),1 courts exercising jurisdiction under that statute could, in the appropriate circumstances, approve “roll up” debtor in possession (“DIP”) financing arrangements. While it can take different forms, in essence, a “roll up” DIP loan facility is an arrangement whereby an existing lender refinances or repays its pre-filing loan by way of borrowings under the new DIP loan facility. The priority status of the charge granted by the court to secure the DIP
- Introduction
The doctrine of equitable subordination in bankruptcy cases has long been recognized by U.S. courts and subsequently codified in the United States in section 510(c) of the U.S. Bankruptcy Code.1
In 2008, the Supreme Court of Canada ruled in Saulnier5 that a commercial fishing licence constitutes ‘property’ within the context of the Bankruptcy and Insolvency Act (“BIA”) and the Nova Scotia PPSA6, thereby allowing the trustee in bankruptcy to seize the licence from the bankrupt.
In turbulent and uncertain financial times, employers and employees more often than ever find themselves immersed in and affected by insolvency proceedings. Particularly for employees, there is often misunderstanding and misinformation respecting the nature of the proceedings and employees’ rights thereunder. In this article, after a brief description of the most common forms of insolvency proceedings in Canada, the rights and entitlements of employees under these proceedings will be discussed.
Bankruptcy
We have prepared this Business Law Guide as a general overview of certain legal and business matters that may be relevant to a decision to establish or invest in a business in Canada.
On May 14, 2012, in 9-Ball Interests Inc. v. Traditional Life Sciences Inc.1, the Ontario Superior Court of Justice (the "Court") rendered another decision that demonstrates the importance of full disclosure and transparency in applications made to the Court.
The British Columbia case of Botham Holdings Ltd. (Trustee of) v. Braydon Investments Ltd. is a reminder that tax and estate plans must take non-tax issues and law into account. It can be extremely dangerous to let the tax tail wag the dog!
Mr. Botham and a family trust were the shareholders of Botham Holdings Ltd. ("Holdings"). In 2004 Holdings was fortunate enough to realize a large capital gain and, as a result, incurred a significant income tax liability.