On June 1, 2020, the U.S. Court of Appeals for the 11th Circuit issued Isaiah v. JPMorgan Chase Bank, N.A., a precedential opinion that draws sharp limits on court-appointed receivers’ ability to bring claims against financial institutions that provided banking services to customers later discovered to be running a Ponzi scheme.
On May 21, 2020, the Québec Court of Appeal (QCA) released its reasons in Arrangement relatif à 9323-7055 Québec inc. (Aquadis International Inc.)[1](the Aquadis case).
Introduction
On May 8, 2020, the Supreme Court of Canada (SCC) released its written reasons in 9354-9186 Québec Inc. v. Callidus Capital Corp.[1](the Bluberi case).
On April 15, 2020, the British Columbia Supreme Court denied an application by a married couple previously found to have contravened B.C. securities laws for an absolute or suspended discharge from bankruptcy under s. 172 of the Bankruptcy and Insolvency Act (the “BIA”). The ruling sends a strong message that securities law violators will have difficulty using the bankruptcy process to absolve themselves of the financial consequences of their misdeeds.
Recent emergency motions from Modell’s Sporting Goods, Inc. (“Modell’s) and Pier 1 Imports, Inc. (“Pier 1”) to put their chapter 11 cases on ice may signal a growing trend. As the economic consequences of efforts to contain and respond to COVID-19 infections render deal-making difficult or impossible, what were the best-laid plans a few weeks ago often no longer make sense.
To assist businesses dealing with the economic impact of the coronavirus (COVID-19) pandemic, on March 28, 2020, the UK government followed in the footsteps of countries including Spain, Germany and Australia and announced certain changes to UK insolvency law.
This article summarises the key changes the UK government is proposing to existing insolvency laws, and considers the key restructuring tools available to assist companies during this unprecedented and challenging time.
Wrongful Trading Suspension
Barely a month after Bankruptcy Code amendments providing a cheaper, more efficient path to chapter 11 relief for small businesses took effect under the Small Business Reorganization Act of 2019 (“SBRA”), Congress has nearly tripled the debt-eligibility threshold from roughly $2.7 to $7.5 million in response to economic fallout from the COVID-19 shutdown.
A Texas bankruptcy court recently ruled that dedication clauses in gas-gathering agreements run with the land and cannot be rejected by a debtor. That decision, In re Alta Mesa Resources, Inc., affirms an industrywide practice that faced an uncertain future following the ruling in In re Sabine Oil & Gas Corp. from the Southern District of New York, which was upheld by the 2nd U.S. Circuit Court of Appeals in 2018.
The bankruptcy court in Delaware recently ordered the Centers for Medicare & Medicaid Services (CMS) to resume making post-petition Medicare payments to chapter 11 debtor True Health Diagnostics LLC. CMS had been withholding payments in light of a pre-petition fraud investigation.
Introduction
On August 29, 2019, the majority of the Alberta Court of Appeal held in Canada v. Canada North Group Inc., 2019 ABCA 314 (Canada North) that priming charges granted in a Companies’ Creditors Arrangement Act (CCAA) Initial Order can have priority over the Crown’s deemed trust for unremitted source deductions. [1]