On August 18, 2011, Mr. Justice Morawetz, of the Ontario Superior Court of Justice, released an important decision in regard to preference actions in the matter of Tucker v. Aero Inventory (UK) Limited (together with Aero Inventory plc, Aero).
Background
Sunrise, sunset. Perhaps a matchmaker would have helped. The saga of the dispute between Ventas, Inc. and Health Care Property Investors, Inc. arose five years ago when Sunrise Senior Living Real Estate Investment Trust’s "board of trustees determined that a strategic sale process of its assets would be beneficial to its unitholders, thus effectively putting Sunrise ‘in play’ on the public markets" (per Blair J.A. for the Ontario Court of Appeal) in Ventas, Inc. v.
Action for return of premiums paid of key man insurance policies dismissed.
[2011] O.J. No. 3387
Ontario Superior Court of Justice
M.A. Penny J.
January 21, 2011
The appellant insurer sought leave to appeal the order of the Chambers Judge who dismissed it’s application to be added as a party or intervener in an underlying liability action in the Supreme Court of British Columbia.
[2011] B.C.J. No. 1336
2011 BCCA 326
British Columbia Court of Appeal (In Bankruptcy and Insolvency)
P.A. Kirkpatrick J.A. (In Chambers)
July 8, 2011
A number of commentators have written articles about Part IV of the Companies’ Creditors Arrangement Act (CCAA), which deals with recognizing and enforcing foreign insolvency proceedings, however little has been written about the treatment of corporate groups in this context. Part IV of the CCAA deals with entities on an individual basis, and how to deal with corporate groups is not well addressed in international insolvency legislation.
U.S. bankruptcy courts may be advantageous forums for foreign liquidators to organize large scale lawsuits; however, courts will impose limitations.
introduction
In Canada legislative authority is divided between the federal and provincial governments by subject matter. "Bankruptcy and insolvency" is a matter of federal jurisdiction, while "property and civil rights" is generally within the jurisdiction of the provinces.
Having enforceable security over all of a borrower’s assets is obviously of primary importance to a lender. However, where a borrower occupies leased premises, ensuring the lender has quick and reliable access to the collateral is equally important, especially if the landlord proves to be unco-operative after a borrower’s default. Although court-ordered access to a borrower’s leased premises can be sought after a borrower’s loan default, a landlord waiver obtained prior to an initial advance of a loan can bring some added certainty to the realization process outside of a bankrup
Generally speaking, the policy of the Bankruptcy and Insolvency Act (“BIA”) is not to interfere with secured creditors, leaving them free to realize upon their security. While this makes sense in the abstract, the question that is most often posed by secured creditors is “what does this mean in a practical sense? What exactly do I need to do to retrieve my secured asset?”