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

Case Trends

Introduction

On March 30, 2021, the Supreme Court of British Columbia (the Court) made an initial order under the Companies Creditors Arrangement Act (the CCAA) in respect of EncoreFX Inc. (EncoreFX) one year after the commencement of its bankruptcy proceedings. The decision is unusual in that the applicant for the CCAA initial order was EncoreFX’s trustee in bankruptcy (the Trustee), who also sought to be appointed as monitor of EncoreFX (with enhanced powers). On April 22, 2021, the Court released the reasons for its decision.¹

A recent judgment rendered by the Superior Court in the judicial district of Montréal¹ is in line with the current trend in rulings regarding the appointment of receivers under the Bankruptcy and Insolvency Act (“B.I.A.”), namely the requirement that the notice of exercise of a hypothecary right referred to in the Civil Code of Quebec (“C.C.Q.”) be submitted, and the time limit specified in the notice must have expired, prior to the application to appoint a receiver.

In the recent decision of British Columbia Attorney General v Quinsam Coal Corporation, 2020 BCSC 640 (Quinsam), the British Columbia Supreme Court (the Court) considered the priority between a debtor’s environmental liabilities and a secured creditor. In its analysis, the Court extensively discussed the Supreme Court of Canada’s decision in Orphan Well Association v Grant Thornton Ltd, 2019 SCC 5 (Redwater). In reference to Redwater, the Court posed the following question:

Une décision récente rendue par la Cour supérieure dans le district judiciaire de Montréal¹ s’inscrit dans la tendance jurisprudentielle en matière de nomination de séquestre en vertu de la Loi sur la faillite et l’insolvabilité (« L.F.I. »), soit la nécessité que le préavis d’exercice visé au Code civil du Québec (« C.c.Q. ») soit transmis et expiré préalablement à la demande de nomination.

Cette décision fait partie d’une controverse jurisprudentielle qui devra être tranchée par la Cour d’appel prochainement.

These are unprecedented and uncertain times. Everywhere, the COVID-19 pandemic has strained revenue streams and asset prices, shaken investor and consumer confidence, and caused overall financial conditions to deteriorate. Everyone is asking the same question: How do we deal with the financial fallout of COVID-19?

In many cases, parties are working together to overcome these financial challenges, preserve value and navigate a mutually beneficial path forward.

Réagissant au choc économique causé par les nombreuses mesures de santé publique mises en œuvre pour contrôler la propagation de la COVID-19, le gouvernement provincial a annoncé, le 19 mars 2020, la création d’un programme d’aide aux entreprises québécoises totalisant 2,5 milliards de dollars.

​On November 1, 2019, amendments to the Bankruptcy and Insolvency Act,R.S.C. 1985, c. B-3 (BIA) and the Companies' Creditors Arrangement Act, R.S.C. 1985, c. C-36 (CCAA) came into force. Among other changes described in our previous publication, these amendments expand the protection offered to intellectual property (IP) licensees in the event that the licensor enters insolvency.