Hello everyone.
Except for a brief addendum to an order made in a criminal matter, the Court of Appeal only released civil law decisions this week, which is rare. Topics covered included whether or not leave to appeal a vesting order made on a receivership sale under the Bankruptcy and Insolvency Act is required (it is), an ironic case in which a lawyer initially resisted a professional negligence claim for missing a limitation period by arguing the limitation period had been missed (nice try), insurance law and adjournments.
On Tuesday, March 8, 2016, U.S. Bankruptcy Judge Shelley C. Chapman in New York permitted Sabine Oil & Gas Corporation to reject three gas gathering and handling agreements with Nordheim Eagle Ford Gathering, LLC and HPIP Gonzales Holdings, LLC. All of the agreements are governed by Texas law.
Hello again.
Most of the Court of Appeal civil decisions this week were procedural in nature. Topics included the standard of review of discretionary orders (deference), municipal law, leave to appeal and stays pending appeal in the CCAA context and the consolidation of appeals to the Court of Appeal as of right with Divisional Court appeals requiring leave.
Have a nice weekend.
Table of Contents
Civil Decisions
Pickering (City) v. Slade, 2016 ONCA 133
Hello again for another week,
The mainstream media have been trying to predict, on almost a daily basis, the causes of, and the winners and losers (mostly focused on the latter category) resulting from, the current volatility in oil and gas prices.
The Bankruptcy Code provides certain protections to buyers of bankruptcy estate assets and to entities that extend credit or financing to a trustee or chapter 11 debtor-in-possession ("DIP"). However, these safe harbors are available only if a buyer or lender is deemed to have acted in "good faith," a concept that is not defined in the Bankruptcy Code.
A recent bankruptcy court decision denying a royalty owner's motion for summary judgment is highly relevant to any investor that currently owns a term royalty interest or is considering such an investment. The United States Bankruptcy Court for the Southern District of Texas found in NGP Capital Resources Co. v. ATP Oil & Gas Corp. (In re ATP Oil & Gas Corp.), No. 12-3443, 2014 Bankr. LEXIS 33 (Bankr. S.D. Tex. Jan.
The Supreme Court of Canada, in a decision that has implications for borrowers and lenders alike, particularly where pension funds are involved, has raised some new hurdles for the country’s banks and their business customers and, at the same time, has bolstered protection for lenders of last resort who finance insolvent companies.
The court’s decision in Sun Indalex Finance, LLC v. United Steelworkers, issued earlier this year, addresses critical questions in insolvency law regarding pension funds and DIP financing.
In 1984, the Third Circuit was the first court of appeals to examine the Bankruptcy Code’s new definition of “claim” in Avellino & Bienes v. M. Frenville Co. (In re M. Frenville Co.), 744 F.2d 332 (3d Cir. 1984). Focusing on the “right to payment” language in that definition, the court decided that a claim arises when a claimant’s right to payment accrues under applicable nonbankruptcy law. This “accrual” test was widely criticized by other circuit courts as contradicting the broad definition of “claim” envisioned by Congress and the Bankruptcy Code.
In In re River East Plaza, LLC, 669 F.3d 826 (7th Cir. 2012), the Seventh Circuit Court of Appeals affirmed a bankruptcy court's ruling that a debtor could not "cram down" a chapter 11 plan over the objection of an undersecured creditor which had made a section 1111(b) election by substituting a lien on 30-year U.S. Treasury bonds as the "indubitable equivalent" of the creditor's mortgage lien on the property.