Two recent Supreme Court of Canada decisions demonstrate that the corporate attribution doctrine is not a one-size-fits-all approach.
A bedrock principle underlying chapter 11 of the Bankruptcy Code is that creditors, shareholders, and other stakeholders should be provided with adequate information to make an informed decision to either accept or reject a chapter 11 plan. For this reason, the Bankruptcy Code provides that any "solicitation" of votes for or against a plan must be preceded or accompanied by stakeholders' receipt of a "disclosure statement" approved by the bankruptcy court explaining the background of the case as well as the key provisions of the chapter 11 plan.
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.
Introduction
Les cas d’insolvabilité commerciale devraient continuer d’augmenter à court terme en raison de la hausse des taux d’intérêt, des perturbations dans les chaînes d’approvisionnement et de l’augmentation conséquente du coût des marchandises. Une flambée des cas d’insolvabilité commerciale pourrait également augmenter la probabilité que les entreprises soient touchées par une procédure d’insolvabilité officielle en tant que créancier, fournisseur ou client, ou autrement en tant que partie prenante.
Introduction
Commercial insolvencies are expected to steadily increase in the near-term due to higher interest rates, supply chain disruption and corresponding increased commodity costs. A rise in commercial insolvencies will increase the likelihood that businesses will be impacted by a formal insolvency proceeding, whether as a creditor, supplier, customer or other stakeholder. It is, therefore, important for businesses to understand how to strategize in the context of both newly initiated and ongoing insolvency proceedings.
Commercial insolvencies are expected to steadily increase in the near-term due to higher interest rates, supply chain disruption and corresponding increased commodity costs. A rise in commercial insolvencies will increase the likelihood that businesses will be impacted by a formal insolvency proceeding, whether as a creditor, supplier, customer or other stakeholder. It is, therefore, important for businesses to understand how to strategize in the context of both newly initiated and ongoing insolvency proceedings.
In Short
The Situation: The U.S. Supreme Court considered whether § 363(m) of the Bankruptcy Code, which limits a party's ability to undo an asset transfer made to a good-faith purchaser in a bankruptcy case, is jurisdictional.
The ability of a bankruptcy trustee or chapter 11 debtor-in-possession ("DIP") to assume, assume and assign, or reject executory contracts and unexpired leases is an important tool designed to promote a "fresh start" for debtors and to maximize the value of the bankruptcy estate for the benefit of all stakeholders. However, the Bankruptcy Code establishes strict requirements for the assumption or assignment of contracts and leases.