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The United States District Court for the Southern District of New York upholds rulings with respect to subordination, cramdown and the make-whole dispute

In a memorandum decision dated May 4, 2015, Judge Vincent L. Briccetti of the United States District Court for the Southern District of New York affirmed the September 2014 decision of Judge Robert D. Drain of the United States Bankruptcy Court for the Southern District of New York, confirming the joint plans of reorganization (the “Plan”) in the Chapter 11 cases of MPM Silicones LLC and its affiliates (“Momentive”). Appeals were taken on three separate parts of Judge Drain’s confirmation decision, each of which ultimately was affirmed by the district court:

USA, New York, Insolvency & Restructuring, Litigation, A&O Shearman
Canasea Petrogas Group Holdings Limited (Re): single judge may hear CCAA leave application

In his November 20, 2014 decision in CanaSea PetroGas Group Holdings Limited (Re), Sharpe J.A. of the Ontario Court of Appeal did not accept the respondents’ submissions that he should decline to hear an application for leave to appeal a CCAA decision because only a three-judge panel should hear such an application.

Canada, Ontario, Insolvency & Restructuring, Litigation, Osler Hoskin & Harcourt LLP
Leighton v. Best: indulgence granted to file late Notice of Appeal after change in the law

The test for an extension of time to serve and file a late Notice of Appeal in Ontario is well-established in the case law:

Canada, Ontario, Insolvency & Restructuring, Litigation, Osler Hoskin & Harcourt LLP, Court of Appeal for Ontario
Southern District of New York holds in Madoff that the Bankruptcy Code cannot be used to recover extraterritorial transfers

Dealing a major blow to the trustee’s efforts to recover fraudulent transfers on behalf of the bankruptcy estate of the company run by Bernard Madoff, Judge Jed S. Rakoff of the United States District Court for the Southern District of New York held in SIPC v. Bernard L. Madoff Investment Securities LLC1 that the Bankruptcy Code cannot be used to recover fraudulent transfers of funds that occur entirely outside the United States.

USA, New York, Capital Markets, Insolvency & Restructuring, Litigation, White Collar Crime, A&O Shearman, Extraterritoriality, Title 11 of the US Code
Msi Spergel Inc. v. I.F. Propco Holdings (Ontario) 36 Ltd. – no suspension of limitations periods pursuant to s. 195 of the BIA

Upon the filing of an appeal of a bankruptcy order, that order is stayed pursuant to section 195 of the Bankruptcy and Insolvency Act (“BIA”). In Msi Spergel v. I.F. Propco Holdings (Ontario) 36 Ltd., 2013 ONCA 550, the Ontario Court of Appeal had to decide whether that stay suspends the limitation period applicable to a motion by a trustee to set aside a preferential payment by a bankrupt under s. 95 of the BIA.

Canada, Insolvency & Restructuring, Litigation, Osler Hoskin & Harcourt LLP, Bankruptcy, Statute of limitations, Bankruptcy and Insolvency Act 1985 (Canada), Court of Appeal for Ontario
Re Nortel: fresh evidence in a motion for leave to appeal

In a decision rendered on August 15, 2013, the Ontario Court of Appeal in Re Nortel denied a motion for leave to appeal in a CCAA proceeding, reiterating the stringent test for leave to appeal in such circumstances. More importantly for our purposes, the court reiterated the necessity for a motion for leave to adduce fresh evidence where the moving party seeks to rely upon such evidence.

Canada, Ontario, Insolvency & Restructuring, Litigation, Osler Hoskin & Harcourt LLP, Court of Appeal for Ontario
Sino-Forest: leave to appeal CCAA decision denied when appellant seeking to preserve potential future right to opt out of class action

The test for granting leave to appeal in Companies Creditors’ Arrangement Act proceedings is well-settled:

Canada, Ontario, Insolvency & Restructuring, Litigation, Osler Hoskin & Harcourt LLP, Class action, Court of Appeal for Ontario