It is no secret that the mining sector is facing tough times. In recent boom years, mining companies took on unprecedented amounts of debt. Now that commodity prices have dropped and sources of refinancing have dried up, debt obligations have become overwhelming for many companies, posing a serious risk to their survival.

Canada

On December 1, 2014, the U.S. House of Representatives passed the Financial Institution Bankruptcy Act of 2014(FIBA).  The legislation passed on a voice vote and is supported by the major Wall Street banks.

All bankruptcy practitioners know that a debtor may choose which contracts to assume and which contracts to reject.  But may a debtor reject contracts that are part of an overall, integrated transaction?  In a recent bankruptcy decision, the court found the answer to be no, at least if the parties are careful in drafting their contracts.

The British Columbia Court of Appeal has overturned the B.C. Supreme Court decision inKBA Canada1, which was reviewed in the September 2012 issue of Fully Secured.