Introduction

Non-consensual third-party releases are provisions in reorganization plans that release non-debtor parties from liability to other non-debtor parties without the consent of all potential claimholders. These releases are frequently included in chapter 11 plans of reorganization. Most circuit courts allow these releases under certain circumstances; however, there is a split among circuit courts as to whether such non-consensual third-party releases are permitted by the Bankruptcy Code.

Introduction

On July 28, 2021, the Supreme Court of Canada (the "SCC") released its decision in Canada v Canada North Group Inc.^[1] (2021 SCC 30) confirming that court-ordered super-priority charges ("Priming Charges") granted pursuant to the Companies' Creditors Arrang

In the wake of the economic stress created by COVID-19, we have seen increased opportunities for buyers looking to acquire distressed companies and assets in Canada. Increased deal flow in industry sectors that have been hit hardest by COVID-19, including retail, hospitality, travel, cannabis, and oil and gas has occurred, and with the passage of time other sectors will be affected.

In an insolvency, the three heads of set-off (contractual, legal and equitable) each represent a powerful means of effectively jumping the queue and circumventing the ordinary priority scheme between a company's secured and unsecured creditors.

As solar industry observers will already know, on April 21st, 2016, (the “Filing Date”) SunEdison, Inc. (“SunEdison”) and several of its U.S. and international subsidiaries (the "SunEdison Group") filed a voluntary petition for relief under Chapter 11 of the United States Bankruptcy Code (the “Chapter 11 Proceedings”)in the United States Bankruptcy Court for the Southern District of New York (the “ US Bankruptcy Court”).¹