Recent legislative amendments in Ontario are intended to protect construction subcontractors from the claims of other creditors in the event of insolvency. They impose a new requirement to maintain written records for trust funds that will be in effect as of July 1, 2018.

COVID-19

Government Intervention Schemes

Current as of 21 May 2021

Government Intervention Schemes

COVID-19 Government Intervention Schemes 2

Countries around the globe are facing unprecedented and rapid change due to the COVID-19 pandemic. This guide provides a summary of key government interventions around the globe in relation to: EU State Aid Approvals (for EMEA region), foreign investment restrictions, debt, equity and taxation.

In Chandos Construction Ltd. v. Deloitte Restructuring Inc., a decision released on October 2, 2020, the Supreme Court of Canada affirmed the anti-deprivation rule in the common law of Canada. The dispute in this case revolved around a construction contract between Chandos Construction Ltd. and Capital Steel Inc.

The ongoing COVID-19 pandemic has profoundly reshaped the global business landscape. Some companies that only months ago seemed unstoppably profitable have been brought to an existential brink by extended lockdowns, supply chain failures, and other obstacles caused by the pandemic. Other companies who have experienced less disruption (or in some cases windfalls) stand at the threshold of opportunity even as they prepare themselves for the challenges of the 'new normal'.

In a recent decision 9354-9186 Québec inc. v. Callidius Capital Corp, 2020 SCC 10 , the Supreme Court of Canada affirmed that:

The current COVID-19 market environment presents unique circumstances to companies and investors who may, as a result of the tumultuous markets and the financial and personal effects of COVID-19, have opportunities to acquire distressed businesses at potentially depressed prices. Particularly in this market environment, though, one or more of the following scenarios may apply:

On November 1, 2019, reforms to Canada’s Bankruptcy and Insolvency Act (BIA) and the Companies’ Creditors Arrangement Act (CCAA) that were announced in Canada’s federal 2019 budget will come into force. Key changes to the insolvency regime include:

When a plaintiff obtains a judgment from the court, that party is normally precluded from starting another lawsuit seeking the same judgment debt from the defendant.

In McGoey (Re), 2019 ONSC 80, Justice Penny of the Ontario Superior Court of Justice found trusts over two properties held by a bankrupt were void as shams. In his decision, Justice Penny noted that had he not found the trusts to be sham trusts, he would still have set them aside as fraudulent conveyances, making us ask: “what is the difference between a sham trust and a fraudulent conveyance?”

KERPs (Key Employee Retention Plans) and KEIPs (Key Employee Incentive Plans), otherwise referred to as “pay to stay” compensation plans, are commonly offered by employers to incent key employees to remain with the company during an insolvency restructuring proceeding when so-called “key employees” may be tempted to find more stable employment elsewhere.