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

FOLLOWING OUR PREVIOUS ARTICLES ON THE QUALEX-LANDMARK TOWERS INC V 12-10 CAPITAL CORP CASE BEING HEARD IN THE ALBERTA COURTS, 12-10 CAPITAL CORP HAS NOW BEEN APPEALED SUCCESSFULLY IN THE COURT OF APPEAL OF ALBERTA, WHICH RELEASED IT’S DECISION EARLIER LAST MONTH. BEALE & CO PROVIDES AN UPDATE AND FURTHER COMMENTARY ON THE LATEST DEVELOPMENT OF THIS ENVIRONMENTAL CASE.

The number of company insolvencies in 2023 increased by over a third compared to 2022. The hospitality sector was particularly badly affected, with 53% more insolvencies than in 2022.

It appears that 2024 will be similarly challenging for companies in the hospitality sector. The Restaurant Association of Ireland (RAI) has set out the main challenges faced by the industry, including increased energy and labour costs, and the VAT rate reverting to 13.5% after having been reduced to 9% during the covid-19 pandemic.

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

Following our previous article on the Canadian case of Qualex-Landmark Towers Inc v 12-10 Capital Corp, there has been an application to appeal to Alberta’s highest court with several intervener applications. Beale & Co provides an update and further commentary on the next chapter of this environmental case.

The High Court has reaffirmed the test to be applied in considering an application to dismiss a bankruptcy summons grounded on a judgment.

The bankruptcy process in Ireland involves multiple steps and the debtor can seek to bring it to a halt at each step. Debtors often seek to rerun effectively the same arguments at each step, ignoring previous findings by the courts. One such step is an application to dismiss a bankruptcy summons.

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.

There are certain circumstances where liquidators can be held personally liable for costs orders made in proceedings taken by them.

Under the so called “Ballyrider Principles[1]”:

The Irish High Court has determined that the liquidation of an Irish aircraft leasing company, which was a 100% subsidiary of a Russian company expressly subject to EU sanctions, rebuts the presumption that the company was controlled by the Russian parent for the purpose of EU sanctions.

This enables the liquidators to deal with the assets without costly and time-consuming derogation applications.

Background

The Court of Appeal has upheld the High Court decision of Mr Justice Fancourt in Denaxe Limited v Cooper & Anor [2022] EWHC 764 (Ch) striking out a substantial damages claim brought against court appointed receivers concerning the 2019 sale of Blackpool Football Club.