Two recent Supreme Court of Canada decisions demonstrate that the corporate attribution doctrine is not a one-size-fits-all approach.

Court approval of a sale process in receivership or Bankruptcy and Insolvency Act (“BIA”) proposal proceedings is generally a procedural order and objectors do not have an appeal as of right; they must seek leave and meet a high test in order obtain it. However, in Peakhill Capital Inc. v.

Business rates liability is complex and the question of who is liable if occupiers become insolvent is one that often arises during periods of economic uncertainty, such as the pandemic.

Business rates liability for insolvent companies

Business rates liability attaches to specific units of property known as “hereditaments”.

Hurstwood Properties (A) Ltd and others (Respondents) v Rossendale Borough Council and another (Appellants)

The Supreme Court has delivered its keenly anticipated judgment in a case concerning the validity of two business rates mitigation schemes. The schemes under scrutiny involved property owners letting unoccupied properties to special purpose vehicles (“SPVs”) which benefitted from a business rates exemption and therefore allowed both the property owners and the SPVs to avoid liability for business rates.

The CVA challenge

The landlords’ claim against the Debenhams CVA was put forward on five grounds:

1. Future rent is not a “debt” and so the landlords are not creditors, such that the CVA cannot bind them

REJECTED: The definition of “debt” is broad enough to include pecuniary contingent liabilities, such as future rent.

2. A CVA cannot operate to reduce rent payable under leases: it is automatically unfairly prejudicial

“[C]ourts may account for hypothetical preference actions within a hypothetical [C]hapter 7 liquidation” to hold a defendant bank (“Bank”) liable for a payment it received within 90 days of a debtor’s bankruptcy, held the U.S. Court of Appeals for the Ninth Circuit on March 7, 2017.In re Tenderloin Health, 2017 U.S. App. LEXIS 4008, *4 (9th Cir. March 7, 2017).

The Federal Rules of Bankruptcy Procedure (“Bankruptcy Rules”) require each corporate party in an adversary proceeding (i.e., a bankruptcy court suit) to file a statement identifying the holders of “10% or more” of the party’s equity interests. Fed. R. Bankr. P. 7007.1(a). Bankruptcy Judge Martin Glenn, relying on another local Bankruptcy Rule (Bankr. S.D.N.Y. R.

A Chapter 11 debtor “cannot nullify a preexisting obligation in a loan agreement to pay post-default interest solely by proposing a cure,” held a split panel of the U.S. Court of Appeals for the Ninth Circuit on Nov. 4, 2016. In re New Investments Inc., 2016 WL 6543520, *3 (9th Cir. Nov. 4, 2016) (2-1).

While a recent federal bankruptcy court ruling provides some clarity as to how midstream gathering agreements may be treated in Chapter 11 cases involving oil and gas exploration and production companies (“E&Ps”), there are still many questions that remain. This Alert analyzes and answers 10 important questions raised by the In re Sabine Oil & Gas Corporation decision of March 8, 2016.[1]

An asset purchaser’s payments into segregated accounts for the benefit of general unsecured creditors and professionals employed by the debtor (i.e., the seller) and its creditors’ committee, made in connection with the purchase of all of the debtor’s assets, are not property of the debtor’s estate or available for distribution to creditors according to the U.S. Court of Appeals for the Third Circuit — even when some of the segregated accounts were listed as consideration in the governing asset purchase agreement. ICL Holding Company, Inc., et al. v.