On July 31, 2024, the Supreme Court of Canada provided clarity regarding the treatment of administrative monetary penalties and disgorgement orders resulting from securities violations in Poonian v. British Columbia (Securities Commission).

As we enter 2025, we look back on five important decisions that made the news in 2024. Here is the the first case.

Mareva orders, also known as freezing orders, may be granted when there is a risk that a defendant might move its assets out of reach of the court’s jurisdiction. Mareva can orders freeze assets owned directly or indirectly by the defendants. Oftentimes a defendant subject to a freezing order has other creditors seeking repayment. Can a creditor enforce its claim against the frozen assets? Yes, but the creditor must come to the court with clean hands and should not make loans to the defendant if it has notice of the order.

Why is this case of interest?

The ongoing litigation between Mr Palmer and Northern Derbyshire Magistrates Court relates to the guilty verdict handed to Mr Palmer who was acting as an administrator and charged with an offence contrary to the Trade Union and Labour Relations Consolidation Act 1992 (TULRCA).

Gawain Moore, Ashley Armitage and Oliver Wheeler discuss the sanctioning by the Business and Property Courts in Leeds of the first creditor-led Part 26A restructuring plan.

The Supreme Court’s decision in BTI v Sequana & Others represents the most significant ruling on the duties of directors of distressed companies of the past 30 years. It is the first occasion on which the Supreme Court has addressed whether company directors owe a duty to consider or act in accordance with the interests of the company’s creditors when the company becomes insolvent, or when it approaches, insolvency (the creditor duty). The judgment is lengthy, but can be boiled down to the following key points.

The U.S. Court of Appeals for the Sixth Circuit recently ruled in a case involving a Chapter 13 debtors’ attempt to shield contributions to a 401(k) retirement account from “projected disposable income,” therefore making such amounts inaccessible to the debtors’ creditors.^[1] For the reasons explained below, the Sixth Circuit rejected the debtors’ arguments.

Case Background

A statute must be interpreted and enforced as written, regardless, according to the U.S. Court of Appeals for the Sixth Circuit, “of whether a court likes the results of that application in a particular case.” That legal maxim guided the Sixth Circuit’s reasoning in a recent decision^[1] in a case involving a Chapter 13 debtor’s repeated filings and requests for dismissal of his bankruptcy cases in order to avoid foreclosure of his home.

On January 14, 2021, the U.S. Supreme Court decided City of Chicago, Illinois v. Fulton (Case No. 19-357, Jan. 14, 2021), a case which examined whether merely retaining estate property after a bankruptcy filing violates the automatic stay provided for by §362(a) of the Bankruptcy Code. The Court overruled the bankruptcy court and U.S. Court of Appeals for the Seventh Circuit in deciding that mere retention of property does not violate the automatic stay.

Case Background

When an individual files a Chapter 7 bankruptcy case, the debtor’s non-exempt assets become property of the estate that is used to pay creditors. “Property of the estate” is a defined term under the Bankruptcy Code, so a disputed question in many cases is: What assets are, in fact, available to creditors?