As discussed in our prior blog entitled “New York’s Sovereign Debt Restructuring Proposals,”[1] three bills were introduced in the New York state legislature to overhaul the way sovereign debt restructurings are handled in New York. Those bills sought to implement a comprehensive mechanism for restructuring sovereign debt, limit recovery on certain sovereign debt claims, and amend the champerty defense.

The first half of 2023 witnessed the failure of three financial institutions in quick succession—Silicon Valley Bank (March 10, 2023), Signature Bank (March 12, 2023), and First Republic Bank (May 1, 2023). This was the first time three financial institutions failed in such a compressed time period since the Great Recession of 2008.

The saga of the first Ultra Petroleum Corp. chapter 11 cases appears to have finally come to an end. Numerous articles have been written on the tortured history of whether certain creditors of Ultra Petroleum are entitled to payment of their contractually mandated Make-Whole Amount and default rate of interest.

Stoneway was advised in its CBCA proceedings by a team including: Kevin Zych, Michael S. Shakra and Joshua Foster (Restructuring & Insolvency); Richard Swan (Litigation); Kristopher Hanc (Capital Markets); Thomas Bauer and Philip Ward (Tax); and Preet K. Gill (Complex Legal Issues and Opinions).

Introduction

The common law anti-deprivation rule is alive and well in Canada, the Supreme Court of Canada held in an 8-1 decision in Chandos Construction Ltd. v Deloitte Restructuring Inc., 2020 SCC 25 [Chandos].

In the past several years, the United States has seen a tidal wave of retail sector chapter 11 cases. The end result for most of those cases has been going out of business and liquidation sales. On March 11, 2020, Modell’s Sporting Goods commenced its chapter 11 cases seeking to follow a similar path taken by other retailers by closing all 153 sporting goods stores in a controlled liquidation. Unfortunately for Modell’s, the COVID-19 crisis hit the United States just as Modell’s commenced its liquidation.

In Travelers Cas. & Sur. Co. of Am. v. PG&E, 549 U.S. 443 (2007), the Supreme Court held that bankruptcy law does not disallow a post-petition unsecured claim for attorney’s fees to the extent such claim is authorized by a pre-petition contract and not otherwise expressly disallowed. That pronouncement should have stopped all future litigation over the issue. That has not been the case.

On June 26, 2018, Regional Senior Justice Morawetz of the Ontario Superior Court of Justice granted an order approving a plan of arrangement under the Canada Business Corporations Act (“CBCA”), in respect of Concordia International Corp.

The Ontario Court of Appeal recently released a decision allowing a certification application by a union to proceed in the face of a receivership of the employer. The decision garnered a strong dissent from Justice Lauwers, suggesting that the decision of the majority would "effect a sea change in insolvency law."

On appeal from a decision in the In re Energy Future Holdings Corp. bankruptcy case, the US Court of Appeals for the Third Circuit recently held that contractual make-whole premium provisions are enforceable where the obligation to repay bond debt is accelerated by a bankruptcy filing.