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.

The ferocious expansion of the shared office sector in recent years has caused a great deal of speculation about the long term viability of shared office accommodation as a business model.

In this insight, we look at how a shared office provider's insolvency might impact on its occupiers, depending on the insolvency process which is followed.

The shared office accommodation business model

Dubbed "the year of the CVA", 2018 has so far seen a spate of high profile retail insolvencies. Landlords are seeking to protect their position in this volatile climate.

The rules governing the actions landlords can take in insolvency situations are complex. They depend on whether the tenant is a company or individual, the specific insolvency process involved and whether the Financial Collateral Arrangements (No. 2) Regulations 2003 (FCAR) apply.

Reforms are needed to the current company voluntary arrangement (CVA) process, according to both R3 and the British Property Federation (BPF).

R3 (the trade association for the UK’s insolvency, restructuring, advisory, and turnaround professionals) has published a research report recommending a number of reforms to improve the effectiveness and reputation of CVAs. These include:

The High Court has released an important decision for landlords and Insolvency Practitioners in the wake of the failure of the company voluntary arrangement (CVA) entered into by BHS Limited (BHS).

(Bankr. S.D. Ind. Dec. 4, 2017)

The bankruptcy court grants the motion to dismiss, finding the defendant’s security interest in the debtor’s assets, including its inventory, has priority over the plaintiff’s reclamation rights. The plaintiff sold goods to the debtor up to the petition date and sought either return of the goods delivered within the reclamation period or recovery of the proceeds from the sale of such goods. Pursuant to 11 U.S.C. § 546(c), the Court finds the reclamation rights are subordinate and the complaint should be dismissed. Opinion below.

(Bankr. E.D. Ky. Nov. 22, 2017)

(B.A.P. 6th Cir. Nov. 28, 2017)

The Sixth Circuit B.A.P. affirms the bankruptcy court’s dismissal of the Chapter 12 bankruptcy case. The court finds that the bankruptcy court failed to give the debtor proper notice and opportunity to be heard prior to the dismissal. However, the violation of due process was harmless error. The delay in filing a confirmable plan and continuing loss to the estate warranted the dismissal. Opinion below.

Judge: Preston

Attorney for Appellant: Heather McKeever

(6th Cir. Nov. 14, 2017)