In Re Temple City Housing Inc.; Minister of National Revenue v. Temple City Housing Inc. 2007 CarswellAlta 1806 (Alta. Q.B.), Temple City Housing Inc. (“Temple”) filed for protection under the Companies’ Creditors Arrangement Act (“CCAA”). The Order sought by Temple contemplated that a Debtor-In-Possession credit facility (“DIP Charge”) would be granted. Temple’s major creditor, Canada Revenue Agency (“CRA”), opposed the granting of the DIP Charge, which would create a court ordered priority over the CRA deemed trust claim.

The Ontario Court of Appeal (Court) recently affirmed the decision of the Ontario Superior Court of Justice in Nortel Networks Corporation (Re) (Nortel),^[1] that the “interest stops” rule applies in proceedings under the 

One of the duties of a trustee is to examine each claim presented by a potential creditor of the
bankrupt and to determine whether such a claim is valid. A trustee is entitled, under
subsection 135(2) of the BIA, to disallow any claim, priority or security that it finds unproven or
invalid. In the event that a creditor’s claim is disallowed by a trustee, that creditor is entitled to appeal that decision to the superior court in the province. A creditor has 30 days after the
receipt of the trustee’s reasons for disallowance to file an appeal, although an extension may be

The Supreme Court of Canada ruled that bankruptcy trustees, receivers and secured creditors can continue to collect the full amount of accounts receivable of a bankrupt supplier, including the Goods and Services Tax (GST) component, even if an amount remains owing by the supplier to the Canada Revenue Agency (CRA).

TrustIn Canada (Deputy Attorney General) v. Temple City Housing Inc., the Alberta Court of Appeal had to consider an application for leave to appeal a provision in a Companies Creditors Arrangement Act (Canada) (“CCAA”) order granting a DIP lender a charge in priority over the claims of CRA. The claims of CRA consisted of deemed trust claims arising under sections 224(1.2), 227(4) and 227(4.1) of the Income Tax Act (Canada).

In Stomp Pork Farm Ltd., Re, (“Stomp Park Farm”) the Saskatchewan Court of Appeal partially overturned orders granted from the Saskatchewan Court of Queen’s Bench which approved debtor in possession financing (“DIP Financing”).

In this case, the debtor owed its first lender $20.5 million, secured against the debtor’s current assets. The lender had priority over the current assets to the extent of $18 million and thereafter shared priority with the debtor’s second lender.

In Meunerie B.L. inc., Re (2007), EYB 2007-126274, 2007 QCCA 1601 (Que. C.A.) affirming (2006), EYB 2006-109274, 2006 QCCS 4914 (Que. S.C.) Meunerie B.L. Inc. (“Meunerie”) made an assignment in accordance with the Bankruptcy and Insolvency Act (“BIA”). At the time of bankruptcy Meunerie was a mill which processed corn purchased from corn producers. Corn that was delivered to Meunerie was stored on site in silos

An Ontario Court has provided guidance on determining a person's centre of main interests (COMI) for the purposes of the UNCITRAL Model Law on Cross-Border Insolvency (as implemented in New Zealand, in the Insolvency (Cross Border) Act 2006, and in Canada).

Under the Model Law, a "foreign main proceeding" is defined as a proceeding in the jurisdiction where the debtor has its COMI, with a presumption that a debtor company's COMI is where its registered office is.

Whether—and in what circumstances—a debtor should pay creditors a make-whole premium continues to be litigated in bankruptcy courts. Last week, as reported by Bloomberg, Judge Dorsey (Delaware) ruled that the debtor – Mallinckrodt Plc – did not need to pay a make whole premium to first lien lenders in order to reinstate such obligations under the debtor’s chapter 11 plan.

On July 31, 2014, the Honourable Mr. Justice Penny of the Ontario Superior Court of Justice ruled in favour of the plaintiff in Indcondo Building Corporation v. Sloan (S.C.J.).