On July 31, 2024, the Supreme Court of Canada released its decision in Poonian v. British Columbia (Securities Commission), on whether financial sanctions imposed by securities regulators are dischargeable through bankruptcy. The decision resolves a conflict between Alberta and B.C. jurisprudence and will have a significant impact on the treatment of all administrative orders in bankruptcy proceedings.
The facts
Highlights
Long-anticipated U.S. Supreme Court decision in Purdue Pharma shakes up the scope of bankruptcy releases
Insurers get increased ability to participate in bankruptcy cases
Overpayment of bankruptcy fees is not refundable to Chapter 11 debtors
The U.S. Supreme Court held last week in Truck Insurance Exchange v. Kaiser Gypsum Co. that an insurance company with financial responsibility for bankruptcy claims is a “party in interest” with the right to object to a Chapter 11 reorganization plan.
Section 1109(b) of the Bankruptcy Code provides:
Section 192 of the Canada Business Corporations Act (CBCA) provides a flexible tool that allows corporations to achieve important change and undertake various corporate transactions, subject to court approval and oversight. This article aims to provide an update on the Québec courts’ acceptance of virtual securityholder meetings and approach to the solvency requirement.
Overview of the arrangement process
Employee terminations and downsizing are features of most restructurings. While employees can typically assert a claim in the insolvency process, parallel claims and complaints with labour relations regulators and tribunals are relatively common. In a recent judgment, the Superior Court of Québec clarified that all employee claims can be extinguished through a plan of arrangement under the Companies’ Creditors Arrangement Act (CCAA), including those filed before regulators and tribunals.
This article originally appeared in Vol. 52 of Kentucky Trucker, a publication of the Kentucky Trucking Association.
Highlights
The Supreme Court held Section 363(m) is only a “statutory limitation” to accessing appellate relief in disputed bankruptcy sales that requires parties to take certain procedural steps to be effective
The Supreme Court also addressed mootness arguments and held that as long as parties have a concrete interest, however small, in the outcome of an appeal, the appeal should remain alive
The ruling provides insight as to how the Supreme Court may tackle the controversial doctrine of “equitable mootness”
Purchasers often relish the prospect of buying distressed assets in a bankruptcy proceeding. Under section 363 of the Bankruptcy Code, a buyer may obtain ownership of bankruptcy estate assets “free and clear of any interest” (assuming certain conditions are met), and also be reasonably confident that the sale will not be reversed on appeal. But the U.S. Supreme Court may have now tempered that confidence. In its recent, unanimous opinion, MOAC Mall Holdings LLC v. Transform Holdco LLC, No. 21-1270 (Apr.
Highlights
Counterparties should continue to follow their current contractual obligations
Silicon Valley Bank’s parent company bankruptcy filing will not impact contractual rights
Counterparties should be vigilant and consider alternate financing arrangements