Reports last week of the significant increase in corporate insolvencies and voluntary liquidations in England and Wales for Q2 demonstrate the combined impact of government COVID-19 support being withdrawn, soaring energy and fuel costs, and weakening demand – and are being reflected in the nature of the instructions coming into our global jurisdictions from distressed companies across the globe.

Introduction

Jersey entities have proved popular as vehicles for a wide variety of asset holding structures, such as those holding real property. The modern legal framework and tax neutral regime are attractive to professionals structuring transactions for their clients. As a consequence, lending institutions are frequently requested to put in place credit arrangements for Jersey entities. To protect its position in these circumstances, a lending institution needs to be aware of the material differences that exist between English law and Jersey law.

Secured Creditor’s Priority Over Unremitted GST/HST: SCC Grants Callidus Capital Corporation Leave to Appeal

On March 22, 2018, the Supreme Court of Canada granted Callidus Capital Corporation (the “Secured Creditor”) leave to appeal the Federal Court of Appeal decision that interpreted subsection 222(3) of the Excise Tax Act (Canada) (the “ETA”) as giving the Crown super priority to property received by a secured creditor from a tax debtor before bankruptcy.

On March 22, 2018, the Supreme Court of Canada granted Callidus Capital Corporation (the “Secured Creditor”) leave to appeal the Federal Court of Appeal decision that interpreted subsection 222(3) of the Excise Tax Act (Canada) (the “ETA”) as giving the Crown super priority to property received by a secured creditor from a tax debtor before bankruptcy.

Le 22 mars 2018, la Cour suprême du Canada a accordé à Callidus Capital Corporation (le « créancier garanti ») l’autorisation d’interjeter appel de la décision de la Cour d’appel fédérale dont l’interprétation du paragraphe 222(3) de la Loi sur la taxe d’accise (Canada) (la « LTA ») donne à la Couronne la priorité absolue sur les biens reçus par un créancier garanti d’un débiteur fiscal avant la faillite.