Insolvency & Restructuring Bulletin

A recent court decision has provided clarity on the application of the Wage Earner Protection Program Act (“WEPPA”) to former employees of companies undergoing restructuring under the Companies’ Creditors Arrangement Act (“CCAA”). The central issue was whether WEPPA applies to employees who were terminated as a result of a reverse vesting order (“RVO”).

Background

BP Canada Energy Group ULC (“BP”) has applied for leave to appeal a decision under section 13 of the Companies’ Creditors Arrangement Act (the “CCAA”) and for a stay of the orders rendered by Justice Yamauchi on April 24, 2024

Case Trends

Introduction

Introduction

On March 23, 2020, we commented on the Quebec Court of Appeal’s decision in the Arrangement relating to Consultants SM inc. case. The City of Montreal (the “City”) appealed this decision to the Supreme Court of Canada and the appeal was heard on May 20, 2021.

On December 10, 2021, the Supreme Court of Canada (the “Supreme Court”) dismissed the City’s appeal, thereby rendering an important decision with respect to “pre-post compensation” and “non-dischargeable debts” under the Companies’ Creditors Arrangement Act (the “CCAA”).

Le 23 mars 2020, nous avons commenté l’arrêt de la Cour d’appel du Québec dans le dossier Arrangement relatif à Consultants SM inc. La Ville de Montréal (la « Ville ») a porté cet arrêt devant la Cour suprême du Canada et l’audition du pourvoi a eu lieu le 20 mai 2021.

The Supreme Court in Sevilleja v Marex Financial Ltd [2020] UKSC 31 has brought much needed clarity to the legal basis and scope of the so-called ‘reflective loss’ principle. The effect of the decision is a ‘bright line’ rule that bars claims by shareholders for loss in value of their shares arising as a consequence of the company having suffered loss, in respect of which the company has a cause of action against the same wrong-doer.

A recent decision of the High Court of New Zealand provides helpful guidance for insolvency practitioners on how aspects of the voluntary administration regime should operate in the context of the COVID-19 pandemic.

On 30 March 2020, the board of directors of EncoreFX (NZ) Limited resolved to appoint administrators to the company. By then, New Zealand was already at Level 4 on the four-level alert system for COVID-19.

On March 17, 2020, the Court of Appeal of Québec (the "Court") issued an important ruling concerning "pre-post" compensation and "non-dischargeable" debts under the Companies' Creditors Arrangement Act (the "CCAA"), by finding that the debt of a municipality arising from an agreement entered into as part of a voluntary reimbursement program ("VRP") under the Act to ensure mainly the recovery of amounts improperly paid as a result of fraud or fraudulent tactics in connection with public contracts ("Bill 26") is unsecured debt in connection with the insolvency of a co-contra