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

The U.S. Court of Appeals for the Seventh Circuit recently upheld a trial court’s rejection of a borrower’s allegations that a mortgagee and its servicer violated the federal Fair Credit Reporting Act and the federal Fair Debt Collection Practices Act by allegedly inaccurately reporting her loan as delinquent following the borrower’s successful completion of her bankruptcy plan, allegedly rejecting her subsequent monthly payments, and filing a foreclosure action based on the supposed post-bankruptcy defaults.

The U.S. Court of Appeals for the Eleventh Circuit recently held that the anti-modification provision in the federal Bankruptcy Code applies to loans secured by mixed-use real properties, such as the large parcel at issue here which functioned both for commercial use and as the debtor’s principal residence.

A copy of the opinion in Lee v. U.S. Bank National Association is available at: Link to Opinion.

The New York State Legislature recently proposed a bill, entitled the Sovereign Debt Stability Act, [1] intended to facilitate sovereign debt restructuring.

As you know from our prior alerts, creditors of borrowers formed as Delaware LLCs (as opposed to corporations) lack standing under Delaware law to sue directors for breaching fiduciary duties even when, to the surprise of many, the LLC is insolvent. See our prior Alert. The disparity of substantive creditor rights depending entirely on corporate form results from two aspects of Delaware law.

There is a growing trend of bankruptcy courts approving structured dismissals of chapter 11 cases following a successful sale of a debtor’s assets under section 363 of the Bankruptcy Code. A structured dismissal is a cost‑effective way for a debtor to exit chapter 11 and is an alternative to (a) confirming a post‑sale liquidating plan, which is expensive and not always viable, or (b) converting the case to chapter 7, which introduces significant uncertainty and unpredictability with the appointment of a chapter 7 trustee to replace management.

When leveraged buyouts (“LBOs”) fail, the selling shareholders are litigation targets. A common suit is a claim by a bankruptcy trustee asserting constructive fraudulent transfer claims seeking to claw-back payments to the selling shareholders from the loan proceeds that financed the LBO.

A look back at bankruptcy trends and litigation in 2023 reveals a spike in bankruptcy filings driven by economic factors and fallout from the pandemic while in upper courts several interesting cases were decided involving proofs of claim, stay violations, and discharge issues.

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

Bankruptcy Considerations for Unitranche Transactions with Super-Priority Revolvers without an AAL