Two recent Supreme Court of Canada decisions demonstrate that the corporate attribution doctrine is not a one-size-fits-all approach.
One of the main advantages for a debtor to seek protection under the Companies’ Creditors Arrangement Act (CCAA) or the Bankruptcy and Insolvency Act (BIA) is the stay of proceedings that prevents creditors faced with a default in payment from taking any action against the debtor. This allows the debtor, among other things, to reorganize itself or dispose of some or all of its assets under the court’s supervision. Be that as it may, there are exceptions.
L’un des principaux avantages pour un débiteur de se placer sous la protection de la Loi sur les arrangements avec les créanciers des compagnies (« LACC ») ou de la Loi sur la faillite et l’insolvabilité (« LFI ») consiste en la suspension des procédures pouvant être intentées par un créancier faisant face à un défaut de paiement. Cette suspension des procédures permet notamment à la débitrice de se réorganiser ou de disposer de certains ou de l’ensemble de ses actifs sous la supervision du tribunal. Or, certaines exceptions existent.
The bankruptcy court presiding over the FTX Trading bankruptcy last month issued a memorandum opinion addressing valuation of cryptocurrency-based claims and how to “calculate a reasonable discount to be applied to the Petition Date market price” for certain cryptocurrency tokens.
Court approval of a sale process in receivership or Bankruptcy and Insolvency Act (“BIA”) proposal proceedings is generally a procedural order and objectors do not have an appeal as of right; they must seek leave and meet a high test in order obtain it. However, in Peakhill Capital Inc. v.
Who owns cryptocurrency held by a cryptocurrency exchange? Do the cryptocurrency assets belong to the customers who deposited the crypto with the exchange, or do the cryptocurrency assets belong to the exchange itself? The answer to this question will have huge significance, both in terms of creditor recoveries as well as preferential transfer liability exposure.
In this second part of our blog exploring the various issues courts need to address in applying the Bankruptcy Code to cryptocurrency, we expand upon our roadmap.
Many authorities and commentators have considered cryptocurrencies, and the blockchains that undergird them, as a potentially disruptive force in the financial industry. Now, that disruption has made its way to a different side of finance—bankruptcy, and during the past year, the United States bankruptcy courts have had to confront many unexpected challenges involved in dealing with cryptocurrency.
How close is too close? The answer to this question can have dire implications for people and companies involved in the cannabis industry who wish to seek bankruptcy protection.
Are bankruptcy doors now opening for cannabis companies? A decision last week from a California bankruptcy court indicates perhaps so, at least for cannabis companies that are no longer operating.
Factual Background