In 2017, the Quebec Court of Appeal had issued a decision in the matter of Arrangement relatif à Métaux Kitco inc., 2017 QCCA 268 ("Kitco") to the effect that the Companies' Creditors Arrangement Act (the "CCAA") prohibited the exercise of all rights of set-off between pre-filing and post-filing claims.

On July 28, 2021, the Supreme Court of Canada (the "SCC") released its decision in Canada v Canada North Group Inc.^[1] (2021 SCC 30) confirming that court-ordered super-priority charges ("Priming Charges") granted pursuant to the Companies' Creditors Arrang

Many describe the United States as Canada's most important trade partner. Cross-border insolvency proceedings between the two jurisdictions are frequent and the recognition by one country's court of the other's bankruptcy orders is an important tool in facilitating the restructuring of companies with operations that spread across North America. A recent decision from the Ontario Court of Appeal (leave to appeal of which was denied by the Supreme Court of Canada) invites us to reflect on the delicate balance between comity for foreign orders and Canada's sovereignty over domestic laws.

In 7636156 Canada Inc. (Re)[1], the Ontario Court of Appeal ("OCA") confirmed the right of a commercial landlord to draw on a letter of credit given as security pursuant to a lease, even when the draw takes place after the termination of the lease by the tenant's trustee in bankruptcy.

Client Alert

In recent years, constructively fraudulent transfer claims asserted in bankruptcy cases, especially those arising from LBOs and similar shareholder transactions, have hit a major road block.

The U.S. Bankruptcy Court for the District of Delaware recently issued an opinion that addresses, among other issues, the question of whether section 546(e) of the Bankruptcy Code preempts certain fraudulent transfer avoidance actions brought under state law. In re Physiotherapy Holdings Inc., No. 15-51238 (Bankr. D. Del. June 20, 2016).

Parties to all legal proceedings - including bankruptcy proceedings - are entitled to Constitutionally protected due process rights, including reasonable notice and an opportunity to be heard. In the bankruptcy context, the debtor must give known creditors reasonable notice of certain critical events, including the sale of the debtor’s assets and the deadline to file claims against the debtor.

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).

The Pensions Regulator has issued a statement setting out its approach to Financial Support Directions in insolvency situations.  It follows the Court of Appeal's decision in Bloom v The Pensions Regulator (Nortel) in October 2011 that a liability arising from a Financial Support Direction (FSD), or a contribution notice (CN), issued to a company in administration or liquidation will, except in very limited circumstances, amount to an expense of that administration or liquidation.  As such, it will rank very highly in the payment priority order, in particular rank

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