Insolvency and Restructuring Bulletin

The BC Court of Appeal has confirmed the jurisdiction for Canadian courts to make reverse vesting orders (“RVO”) in receivership proceedings. British Columbia v.

Overview

In the recent decision of Invico Diversified Income Limited Partnership v NewGrange Energy Inc, 2024 ABKB 214 (“NewGrange”), the Alberta Court of King’s Bench clarified when gross overriding royalties (“GOR”) can be vested out of a debtor company’s estate pursuant to a reverse vesting order (“RVO”). The Court allowed GORs to be vested off under the Applicant’s, Invico Diversified Income Limited Partnership (“Invico”), proposed RVO, finding the GORs to be mere contractual rights and not proper interests in land.

Businesses often rely on trade credit insurance to protect themselves from customers’ inability to pay for products or services. An interesting question that arose recently in the Indian insolvency context was that when a creditor’s claim for pending dues is paid out by an insurer, can the creditor, having received such pay-out, maintain an insolvency action against the debtor? The National Company Law Tribunal (“NCLAT”) has answered this in the affirmative.

Case Trends

In the recent decision of Ontario Securities Commission v Go-To Developments Holdings Inc et al, 2023 ONSC 5921 (“Go-To Developments”), the Court affirmed a receiver’s ability to control solicitor-client privilege in order to perform their mandate. The Court specifically considered whether a receiver could access email correspondence between the principal of the companies under receivership and other interested parties.

In the recent decision of Atlantic Sea Cucumber Ltd (Re), 2023 NSSC 231 the Supreme Court of Nova Scotia in Bankruptcy and Insolvency (the “Court”) departed from the long-standing norm in insolvency proceedings of granting an abridgement of time for filing and service of applications. The debtor company, Atlantic Sea Cucumber Ltd.

The case of Uniworld Sugars Limited (the Corporate Debtor) has a long and chequered history which started before the Allahabad Bench of the NCLT and after doing a round before the NCLAT and the Supreme Court, has been finally decided by the Chandigarh Bench of NCLT vide an Order dated March 20, 2023.

The recent decision from the Court of King’s Bench of Alberta (the “Court”) in Qualex-Landmark Towers Inc v 12-1- Capital Corp, 2023 ABKB 109 (“Qualex”) greatly extended the protective umbrella for costs associated with environmental reclamation obligations.

In Golfside Ventures Ltd (Re) (2023 ABKB 86) the Court of King’s Bench of Alberta (the “Court”) reaffirmed the Court’s authority to exercise inherent jurisdiction in proceedings under the Bankruptcy and Insolvency Act (the “BIA”) in circumstances where (1) the BIA is silent or has not dealt with a matter exhaustively; and (2) the benefit of granting the relief outweighs th