If severe losses and insolvency occur, the directors’ duty to seek wind -up no longer applies if the company files for insolvency and is declared insolvent. While the composition is being carried out, the duty to seek wind-up and the directors’ resulting liability will not arise.

This ruling clarifies the role of the directors’ corporate duties in the event that legal grounds can be attributed to the company for wind-up due to losses, and the obligation to file for insolvency if the company becomes insolvent.

The Supreme Court reiterates the doctrine in its rulings of February 12 and 19, 2013, although in this case, unlike the above rulings, in which the credits were classified as insolvency credits, it concluded that instalments resulting from one finance lease agreement falling due after the declaration of insolvency are claims against the insolvency estate.

In 2011, the Spanish legislator introduced the court-sanctioned refinancing agreement (‘Spanish Scheme’) in the Spanish insolvency system. While the introduction of the Spanish Scheme has been praised for providing new tools for debtors to reorganise out-of-court while addressing the collective action problem, certain of its provisions have made this instrument too rigid and, thus, ineffective for tackling Spanish restructurings.

Judgment of the Court of Appeal of Porto of 05-12-2013

Contract Termination in Favor of the Insolvency Assets – Conditional Termination – Requirements – Bad Faith – Judicial Presumption

On October 28, 2013, the Ontario Ministry of the Environment (MOE) announced that it had reached a settlement with the former directors and officers of Northstar Aerospace whereby those former directors and officers agreed to pay $4.75 million for costs associated with the remediation of contaminated lands owned by the now-bankrupt company. The Environmental Review Tribunal approved the Minutes of Settlement at the hearing held on October 28.

Upon the filing of an appeal of a bankruptcy order, that order is stayed pursuant to section 195 of the Bankruptcy and Insolvency Act (“BIA”). In Msi Spergel v. I.F. Propco Holdings (Ontario) 36 Ltd., 2013 ONCA 550, the Ontario Court of Appeal had to decide whether that stay suspends the limitation period applicable to a motion by a trustee to set aside a preferential payment by a bankrupt under s. 95 of the BIA.

Act 14/2013, of September 27, 2013, favoring entrepreneurs and their internationalization (the “Act”), introduces a wide range of reforms on insolvency, corporate, tax and labor matters. Regarding insolvencies, it takes a more flexible approach to the quorum of financial creditors required for court-sanctioned refinancing agreements and it regulates out-of-court agree-ments for payment as mechanisms for out-of-court negotiation with creditors.

REFINANCING AGREEMENTS

I ARTICLE 233(5) OF THE CODE OF INSOLVENCY AND RECOVERY OF COMPANIES

In a decision rendered on August 15, 2013, the Ontario Court of Appeal in Re Nortel denied a motion for leave to appeal in a CCAA proceeding, reiterating the stringent test for leave to appeal in such circumstances. More importantly for our purposes, the court reiterated the necessity for a motion for leave to adduce fresh evidence where the moving party seeks to rely upon such evidence.

The test for granting leave to appeal in Companies Creditors’ Arrangement Act proceedings is well-settled: