formal proposal under the Bankruptcy and Insolvency Act (BIA) is a powerful alternative to bankruptcy. The benefits of a proposal for the debtor are clear: the debtor reduces its debt load and avoids bankruptcy. However, proposals are also beneficial to creditors since generally the creditor’s recovery in a proposal scenario is better than the potential recovery from a liquidation through a bankruptcy. In simple terms, upon the successful completion of a proposal, the debtor gets a “fresh start” and creditors recover more than they would in a bankruptcy.
The recent Ontario Court of Appeal decision in Murphy v Sally Creek Environs Corporation, 2010 ONCA 312 (“Sally Creek”) is a cautionary tale for Trustees in bankruptcy (“Trustees”) and the counsel who represent them.1 In that case, the Trustee’s fees and those of its legal counsel were drastically reduced on a taxation, a cost award was made against the Trustee personally and the Trustee’s conduct was impugned in a detailed decision of the Bankruptcy Registrar and the Court of Appeal.
Significant insolvency law amendments were declared in force as of September 18, 2009 (the “Amendments”). The Amendments were contained in Bill C-55 which received Royal Assent on November 25, 2005 and in Bill C-12 which received Royal assent on December 14, 2007, but the Amendments were not proclaimed into force until September 18, 2009.
The liquidity crisis has increased the need for creative procedures to avoid sudden death bankruptcy in order to salvage existing value.
A Jersey company or a company incorporated elsewhere but administered in Jersey may become involved in insolvency procedures under Jersey law or the law of a jurisdiction outside Jersey.
The Royal Court of Jersey can receive requests from outside Jersey by courts prescribed under the Bankruptcy (Désastre) (Jersey) Law 1990 or based on principles of comity. Such requests may involve a Jersey company or any other company with assets or information situated in Jersey. Insolvency practitioners appointed under a law or by a court outside Jersey will have no authority, as a matter of Jersey law, to act in Jersey. It is normal, therefore, for an application to be made for recognition of the appointment of such practitioners and to authorise them to exercise powers in Jersey.
A Jersey company or one of its creditors may wish the company to be placed into administration in England under Schedule B1 of the UK's Insolvency Act 1986 (the "Act").
The liquidity crisis has increased the need for creative procedures to avoid sudden death bankruptcy in order to salvage existing value.
A Jersey company or a company incorporated elsewhere but administered in Jersey may become involved in insolvency procedures under Jersey law or the law of a jurisdiction outside Jersey.
No doubt by now, every creditor knows of the new protections given to employees in the face of a company’s insolvency as a result of the enactment of the Wage Earner Protection Program Act (“WEPPA”) and related amendments to the Bankruptcy and Insolvency Act (“BIA”) on July 7, 2008.
As the saying goes, an ounce of prevention is worth a pound of cure. This expression is particularly apt when it comes to secured creditors and their registrations under the Ontario Personal Property Security Act (the “PPSA”). Although “getting it right the first time” has always been the mantra of secured creditors, the economic roller coaster ride of recent months has heightened the need to ensure a properly perfected secured claim.