On July 31, 2024, the Supreme Court of Canada released its decision in Poonian v. British Columbia (Securities Commission), on whether financial sanctions imposed by securities regulators are dischargeable through bankruptcy. The decision resolves a conflict between Alberta and B.C. jurisprudence and will have a significant impact on the treatment of all administrative orders in bankruptcy proceedings.

The facts

The media have been paying considerable attention to the current financial distress of the energy industry in Alberta, focusing primarily on the impact a company’s financial condition can have on its stakeholders, including its employees, shareholders and creditors. But there is another group that is also being affected: counterparties to commercial arrangements with insolvent companies. Increasingly, financially strong companies are having to deal with insolvent joint venture partners, financially distressed operators, and bankrupt lessees.