Earlier this year Abitibi-Consolidated Inc. (Abitibi) and various related entities proposed to enter into an arrangement with certain classes of its creditors relying on the plan of arrangement provisions in the Canada Business Corporations Act (CBCA). It is unusual to propose a corporate plan with respect to a company's debt. The CBCA plan of arrangement provision is not fundamentally an insolvency law. The procedure is most often used to restructure securityholder relationships within solvent companies and that is the primary intention.

In Re ScoZinc Ltd., 2009 NSSC 136 the monitor appointed under the Companies’ Creditors Arrangement Act (“CCAA”) brought a motion for directions on whether it had the authority to allow the revision of a claim after the claim’s bar date, but before the date set for the monitor to complete its assessment of claims.

The decision of the British Columbia Superior Court in Re Ted Leroy Trucking Ltd. was a result of an application for directions with respect to what amounts are properly covered by the Wage Earner Protection Program Act, S.C. 2005, c. 47 (the “WEPPA”), and the Bankruptcy and Insolvency Act, R.S.C. 1985, c. B-3 (the “BIA”).

A. THE PROBLEM

Many charities and associations have cash flow challenges, particularly in the current economic situation. They usually budget to break even financially. If some funding does not materialize as expected, they may be forced to close down. Their directors may be at financial risk as a result.

In Re: Nortel Networks Corp. the Ontario Superior Court of Justice considered an application for court approval of the Bidding Procedures pertaining to the sale of Nortel’s “Layer 4-7” business, as well as approval of a “Stalking Horse” bidding process.

Prior to filing for protection under the CCAA, Nortel decided that the Layer 4-7 business should be sold. Shortly after filing, Nortel agreed to enter into an Asset Purchase Agreement with Radware for the purchase of the Layer 4-7 business (the “Purchase Agreement”).

In a recent decision of the Ontario Superior Court of Justice, the Court rejected a bankrupt music composer’s argument that a security interest the composer had granted in royalty based distributions should be ineffective following his bankruptcy.

Recent changes to the Bankruptcy and Insolvency Act have given certain unpaid pension plan contributions priority over a lender’s security if the employer is bankrupt or in receivership. How can a lender monitor the debtor’s pension arrears to assess the extent of the lender’s loss of priority?

The Bankruptcy and Insolvency Act now provides that certain unpaid pension plan claims rank ahead of a lender’s security in bankruptcy or receivership proceedings. Effective July 7, 2008, sections 81.5 and 81.6 give super-priority status to:

Allarco Entertainment

On June 16, 2009, Allarco Entertainment Inc. and Allarco Entertainment 2008 Inc. filed under the CCAA in Alberta.

Allarco Entertainment owns Super Channel, an Edmonton-based TV network. According to Court documents, Super Channel has approximately 222,000 subscribers. Super Channel broadcasts feature films, original series, specials and mini-series in high definition.

Eddie Bauer

Radius Credit Union Limited v. Royal Bank of Canada [2009] S.J. No. 148, 2009 SKCA 36, on appeal from
2007 SKQB 472

1992: Farmer Wayne Hingtgen (“Debtor”) granted a general security agreement to Radius
Credit Union Limited (“CU”) granting a security interest on all his present and after
acquired assets.

Mercedes Benz Financial v. Ivica Kovacevic (Ont. SCJ)

February 26, 2009: Finding of contempt of Court: [2009] O.J. No. 783

March 3, 2009: Sentencing hearing and order of five days in jail [2009] O.J. No. 888

Mr. Kovacevic (the “Debtor”) entered into a conditional sale contract to finance a Mercedes vehicle with

Mercedes Benz Financial. After seven of forty-eight payments, he defaulted in payment. He refused to pay or return the vehicle.