New guidance from the Pension Protection Fund (PPF) regarding pre-packaged administrations (pre-packs) outlines their approach to pre-packs when the same insolvency practitioner (IP) proposes to continue as office holder in any subsequent liquidation or company voluntary arrangement (CVA).

A recent English High Court decision has further clarified the position on what amounts to an “abuse of process” when it comes to determining the motive behind the presentation of a winding up petition by a creditor. The High Court has ruled that only where a petition is issued for a purpose other than to ensure the equitable winding-up of a debtor company can it be considered an “abuse of process”, and goes on to outline what may constitute such an abuse.

The UK’s Pension Protection Fund (PPF) is about to publish new guidelines to reflect their increased focus on the approval of Insolvency Practitioner’s (IPs) fees. The guidelines require IPs to provide more regular detail of accruing and anticipated costs to the PPF when they are appointed over employers where Defined Benefit (Final Salary) pension schemes are significant creditors. More specifically IPs will now be required to provide a more detailed explanation of how their proposed remuneration reflects the value provided to creditors.

In the recent case of Wilson (as liquidator of 375 Live Ltd) v SMC Properties Limited, the English High Court reviewed the policy behind section 127 Insolvency Act 1986 (“the Act”) and the underlying principles that apply to validation order applications.

In Re Sino-Forest Corporation¹, the Ontario Court of Appeal upheld the interpretation of “equity claims” employed by Justice Morawetz of the Ontario Superior Court of Justice (Commercial List).

Prior to the 2009 amendments (the “Amendments”) to the Companies’ Creditors Arrangement Act (the “CCAA”),¹  courts exercising jurisdiction under that statute could, in the appropriate circumstances, approve “roll up” debtor in possession (“DIP”) financing arrangements.  While it can take different forms, in essence, a “roll up” DIP loan facility is an arrangement whereby an existing lender refinances or repays its pre-filing loan by way of borrowings under the new DIP loan facility.  The priority status of the charge granted by the court to secure the DIP

In the Kitchener Frame Ltd¹ decision, the Ontario Superior Court of Justice (Commercial List) confirmed that third-party releases in proposals made under the BIA² are permitted. In doing so, the Court relied on the principle that the BIA and CCAA³ ought to be read and interpreted, harmoniously. Finally, the Court sanctioned a consolidated proposal on the basis it met the requirements set out in section 59(2) of the BIA.

On October 30, 2009, the Supreme Court of Canada released its long-anticipated decision in Quebec (Revenue) v. Caisse populaire Desjardins de Montmagny. At issue in this case (and two companion cases) was the legal characterization of Crown rights with respect to collected but unremitted GST and Quebec sales tax (QST) in the hands of a trustee in bankruptcy. The Supreme Court confirmed that the Crown is an ordinary unsecured creditor with respect to such amounts, subject to the rights of prior ranking security holders.

Summary of Facts