On April 1, 2021, the Supreme Court of Canada dismissed an application for leave to appeal the decision of the Court of Appeal of Québec (QCA) in Séquestre de Media5 Corporation, 2020 QCCA 943, which had put an end to a long-lasting debate on the availability of ‘national’ receivers to Québec secured creditors. The decision of the QCA is now final.

Along with a tense election south of the border, 2020 brought COVID-19 and its attendant devastating loss of life and far-ranging economic implications, both positive and negative. The world now looks to 2021 with significant uncertainty with respect to what comes next. Certain sectors of the economy, in particular, may be irreparably damaged.

Now that HMRC has become a preferential creditor for certain debts, other creditors – such as suppliers – could lose out.

Under the Finance Act 2020, from 1 December 2020, HMRC became a preferential creditor in insolvency proceedings. This may have significant impact on what’s left for other creditors.

In Chandos Construction Ltd. v Deloitte Restructuring Inc., the Supreme Court of Canada confirmed the application of the common law anti-deprivation rule in the context of a Bankruptcy and Insolvency Act (BIA) proceeding.

Earlier this year, the Ontario Court of Appeal released its decision in Urbancorp Cumberland 2 GP Inc. (Re)[PDF], which clarifies the scope and effectiveness of a section 9(1) vendor’s trust under the Ontario Construction Lien Act in insolvency proceedings.

Life has a habit of testing us, personally and in business. In challenging circumstances, corporate insolvency can threaten even the strongest businesses, large or small.

Here are some tips to help you minimise the threat of insolvency.

On July 20, 2020, the Court of Appeal of Québec (the QCA) released its reasons in Séquestre de Media5 Corporation,^[1] putting an end to a long-lasting debate on the availability of national receivers to Québec secured creditors.

The Corporate Insolvency and Governance Act (CIGA) came into force on 26 June 2020, introducing significant reforms intended to provide breathing space for companies during the coronavirus pandemic.

These measures may be a welcome relief to some struggling companies. However, they could prove problematic for suppliers, who will need to tread especially carefully when dealing with distressed or insolvent companies.

What has CIGA changed?

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).