The economies of the United States (U.S.) and Canada are closely intertwined. As operations expand across the border, so too do the complexities associated with carrying on business - particularly the insolvency of a company spanning both jurisdictions. As such, understanding how to navigate the complexities of Canadian insolvency regimes is essential to successfully doing business in the country.

In 2015, Justice Wilson-Siegel approved a new form of vesting order, referred to as the "reverse vesting order" (or RVO) as part of the restructuring in Plasco Energy (Re). An RVO is a court order that transfers unwanted assets and liabilities out of a debtor company into a (oftentimes newly incorporated) affiliated company, referred to as "ResidualCo." The debtor company is left holding only the assets and liabilities the purchaser wants to acquire.

Bankruptcy & restructuring

The economies of the United States (U.S.) and Canada are closely intertwined. As operations expand across the border, so too do the complexities associated with carrying on business - particularly the insolvency of a company spanning both jurisdictions. As such, understanding how to navigate the complexities of Canadian insolvency regimes is essential to successfully doing business in the country.

1. Legislation and court system

The economies of the United States (U.S.) and Canada are closely intertwined. As operations expand across the border, so too do the complexities associated with carrying on business - particularly the insolvency of a company spanning both jurisdictions. As such, understanding how to navigate the complexities of Canadian insolvency regimes is essential to successfully doing business in the country.

1. Legislation and court system

The Virgin Active restructuring plan judgment was released last week, with a resounding win for Virgin Active over the opposing landlords. Melanie Leech, on behalf of the British Property Federation, said, "This Restructuring Plan sets a dangerous precedent and demonstrates how the law is now allowing wealthy individuals and private equity backers to extract value from their businesses in good times but later claim insolvency, as simply a means to get out of their contractual obligations with property owners.

Virgin Active has been in the news recently, as it has proposed restructuring plans which rely on the new legislation found in the Corporate Governance and Insolvency Act 2020.

In this insight, we will explain:

The economies of the United States (U.S.) and Canada are closely intertwined. As operations expand across the border, so too do the complexities associated with carrying on business - particularly the insolvency of a company spanning both jurisdictions. As such, understanding how to navigate the complexities of Canadian insolvency regimes is essential to successfully doing business in the country.

1. Legislation and court system

Retail Company Voluntary Arrangements (CVAs) are becoming an increasingly popular means of minimising liabilities and creating breathing space for tenants during a difficult trading environment on the High Street. Where does this leave landlords?

On June 19, 2019, the Ontario Court of Appeal released its decision in Third Eye Capital Corporation v. Ressources Dianor Inc./Dianor Resources Inc. [1], addressing the following issues:

2018 was the "year of the CVA", slashing rents and forcing landlords to get to grips with long-winded CVA proposal documents in an attempt to allow struggling tenants to manage their debts, turn around their businesses and avoid terminal insolvency situations.

The unfortunate reality is that even if they are approved by landlords and other creditors, not all these CVAs will be successful and many tenants are likely to end up in administration.