Introduction

Under reforms commencing in July 2018, Australia will have new insolvency laws which will limit the exercise of contract rights to terminate for insolvency. Partners David McIntosh and Robyn Chatwood, explain how these reforms will impact the retail sector in Australia, including suppliers of goods and services and lenders.

Background

In good news for liquidators, the Federal Court’s decision in Marsden (liquidator) v CVS Lane PV Pty Limited Re: Pentridge Village (in which Dentons acted for the liquidator) confirms that time will be extended for liquidators who are unable to bring voidable transaction proceedings within the relevant timeframe due to a lack of funding.

The case also has wider implications. It could be relied upon by liquidators to justify subsequent claims which could otherwise have been brought at an earlier stage if funding had been available.

In a much anticipated judgment, the Court of Appeal of the Supreme Court of NSW has delivered good news for insolvency practitioners concerning their remuneration. This news will be particularly welcome for those practitioners who accept appointments over small to medium sized companies.

Introduction

The Alberta Court of Queen’s Bench decision in Redwater Energy Corporation Re, 2016 ABQB 278, written by Chief Justice Neil Wittmann, clarifies that the provisions of the Bankruptcy and Insolvency Act (BIA) addressing the environmental liability of trustees render certain provisions of provincial regulatory legislation addressing wells and pipelines inoperative to the extent they conflict with the BIA.

In Rieger Printing Ink Co, 2009 WL 477541 (Ont S.C.J. [Commercial]), the Ontario Superior Court of Justice dealt with a party's right to protection against selfincrimination in relation to an examination held under section 163 of the Bankruptcy and Insolvency Act, R.S.C., 1985 c. B-3 ("BIA").

In Bank of Montreal v River Rentals Group Ltd [2010] ABCA 16, the Alberta Court of Appeal had to consider the acceptance of a higher bid made after the tender closing date.

In a recent decision of the Ontario Superior Court of Justice, Re Smurfit-Stone Container Canada Inc., Justice Pepall examined the conflicting interests that arise where companies within a group of restructuring companies have made intercompany loans to one another, and where the board of directors mirror each other in each subsidiary.

Recently, in Re AbitibiBowater Inc., the Province of Newfoundland sought a court order granting it access to the electronic data room of Abitibi created for the purpose of dissemination of certain non-public financial and operation information to its counsel, certain creditors, and the Monitor. The Court denied the Province’s application on the basis that it could not prove itself to be a legitimate stakeholder of Abitibi, and on several policy grounds.

Over the last two years, with the fluctuations in the economic market, commercial real estate in distress has become a lively topic among insolvency practitioners and even in court decisions.

In a corporate reorganization under the Companies’ Creditors Arrangement Act (the “CCAA”), the design of appropriate classes of creditors can be central to the success of the restructuring initiative. The requisite “double majority” for a plan of arrangement to be approved, being a majority in number and two thirds by value of support from creditors, is required per class in order to be binding on that class.