1. State of the Restructuring Market

1.1 Market Trends and Changes

State of the Restructuring and Insolvency Market

There were 27,359 insolvencies in France as of the end of September 2021, down 25.1% from the same period in 2020, and down 47.9% from September 2019. Such reduction is relatively stable across all sectors, including those most severely affected by the health-related restrictions, such as accommodation and food services (down 44.2% year-on-year) and trade (down 28.1% year on year).

Fewer Insolvencies for More Opportunities

At the end of 2021, corporate bankruptcies (for most company sizes and in most sectors) were at their lowest level compared to the pre-COVID-19 figures from 2019, with a 50% drop in insolvency proceedings and a 10% decrease in pre-insolvency situations. This was largely due to the temporary impact of government emergency measures and support, including:

CMIC Mortgage Investment Corp v Rodriguez, 2010 BCSC 308; [2010] BCJ No 425

The bankrupt farmer ran an equestrian operation. She acquired two fabric covered barns, with one anchored by solid concrete blocks resting on the ground, and the second anchored into concrete foundations.

Fairbanx Corp v Royal Bank of Canada, 2010 ONCA 385 (Ont CA), on appeal from 2009 CanLII 55376 (Ont SC)

Fairbanx factored accounts for the debtor, Friction Tecnology Consultants Inc. Fairbanx made its Ontario PPSA registration misspelling the name as Technology, with an “H”. Two years later, the debtor obtained a line of credit from the Bank, which correctly named the debtor in its Ontario PPSA registration.

Caines, Re, 2010 NLTD 72

The bankrupt was the holder of a commercial fishing licence. He was discharged from his bankruptcy before the Supreme Court of Canada released its decision inRoyal Bank of Canada v. Saulnier (2008), 298 D.L.R. (4th) 193, in which that Court concluded that a fishing licence was “property” for purposes of the PPSA and BIA.

Able Automotive Ltd v Cameron-Okolita Inc, 2010 SKQB 34

Able brought a motion to appeal the bankruptcy Registrar’s decision that Able was a secured creditor for a certain amount, but disallowing its claim for certain costs, including insurance, a new engine for the vehicle, and storage charges, legal fees and costs.

In dealing with collateral provided by a third party to support the obligations of the prime debtor, lenders and their counsel need to remember the impact of the federal Bankruptcy and Insolvency Act.

Ontario’s Personal Property Security Act (PPSA) was amended to broaden the definition of the word “debtor.” However, the Bankruptcy and Insolvency Act’s (BIA) definition of a “secured creditor” is still restricted to a person holding a charge or a lien “as security for debt due or accruing to the person (lender) holding the debt.”