Case Trends

Recent teachings of the Supreme Court of Canada court in Canada v Canada North Group Inc., 2021 SCC 30 [Canada North] had confirmed that the Companies’ Creditors Arrangement Act (‘CCAA’) courts could grant super-priority charges (e.g. interim financing, administration charge, or directors’ and officers’ charges) ranking in priority to s.

In a unanimous decision, with concurring reasons, the Supreme Court of Canada (SCC) has rendered its long-anticipated judgment regarding the intersection of insolvency and domestic arbitration law in Peace River Hydro Partners v. Petrowest Corp., 2022 SCC 41.

On December 10, 2021, the Supreme Court of Canada (“SCC”) rendered its decision in Montréal (City) v.

Reverse vesting orders (or “RVOs”) allow the realization of value from assets of a debtor company in circumstances where a traditional transaction model is not effective, preserving the value of permits, tax losses and other assets which cannot be transferred to a purchaser. Two recent decisions demonstrate the willingness of courts to embrace creative solutions, where appropriate, to realize value for stakeholders.

What is a Reverse Vesting Order?

Overview

This bulletin is the first of a Fasken series about the recent decision of the Court of Appeal of Yukon in the ongoing receivership proceedings of Yukon Zinc Corporation (“Yukon Zinc”), indexed as 2021 YKCA 2. The decision addresses several important issues, including: (i) the scope of Section 14.06(7) of the Bankruptcy and Insolvency Act (“BIA”), which creates the Crown’s super priority charge for environmental remediation over the real property of a debtor; and (ii) Crown claims relating to unfurnished security or future costs.

The Ontario Court of Appeal (the “Court of Appeal”) released its decision in 7636156 Canada Inc. (Re), 2020 ONCA 681 on October 28, 2020. The Court of Appeal clarified the law regarding a landlord’s entitlement to draw on a letter of credit where the underlying lease has been disclaimed by a trustee. Overturning the lower court decision, the Court of Appeal held the landlord was entitled draw down on the entire principal of the letter of credit pursuant to its terms and the terms of the disclaimed lease between the parties.

A recent judgment rendered by the Superior Court in the judicial district of Montréal¹ is in line with the current trend in rulings regarding the appointment of receivers under the Bankruptcy and Insolvency Act (“B.I.A.”), namely the requirement that the notice of exercise of a hypothecary right referred to in the Civil Code of Quebec (“C.C.Q.”) be submitted, and the time limit specified in the notice must have expired, prior to the application to appoint a receiver.

Une décision récente rendue par la Cour supérieure dans le district judiciaire de Montréal¹ s’inscrit dans la tendance jurisprudentielle en matière de nomination de séquestre en vertu de la Loi sur la faillite et l’insolvabilité (« L.F.I. »), soit la nécessité que le préavis d’exercice visé au Code civil du Québec (« C.c.Q. ») soit transmis et expiré préalablement à la demande de nomination.

Cette décision fait partie d’une controverse jurisprudentielle qui devra être tranchée par la Cour d’appel prochainement.

The global COVID-19 pandemic, coupled with an ill-timed crude oil price war between Saudi Arabia and Russia, has in a matter of mere weeks materially disrupted the global marketplace. While we are months or years away from understanding the full impact of the coronavirus pandemic on the economy at large, it is increasingly likely that we may be sliding into a recessionary period. We anticipate that businesses will need to restructure in one way or another to deal with immediate liquidity needs, or long-term financial health.