This is another post-Indalex pension deficit priority case. Due to factual differences from Indalex, however, the pension claims were largely rejected.
Companies restructuring under the Companies’ Creditors Arrangement Act (“CCAA”) depend on a supply of critical products and services in order to continue operations during the proceedings. An interruption in the supply of such goods and services would likely be fatal to any restructuring. Prior to 2009, the CCAA was silent about how the post-filing supply of such goods and services was to be obtained. The CCAA provided only that a supplier could not be forced to supply on credit.
On March 3, 2012, the Ontario Superior Court of Justice released its decision in Dodd v. Prime Restaurants of Canada Inc. (2012 ONSC 1578). The decision acts as a caution to franchisors to ensure their franchisees are fully informed and properly advised prior to entering into settlement agreements. Without such steps, franchisors may find releases rendered ineffective against subsequent statutory claims by the application of section 11 of the Arthur Wishart Act (the Act).
Background
ASIC has made a brand new start to the way insolvency notices will be published in Australia. From 1 July 2012 the previous obligations for publications have melted away.
The law in Canada concerning priorities between the statutory deemed trusts relating to pension plan contributions and certain pension fund shortfalls on the one hand, and court ordered charges in favour of DIP lenders on the other hand has been in a state of flux ever since the decision of the Ontario Court of Appeal (the “OCA”) in Re Indalex.
In Re LightSquared LP, the Ontario Court of Superior Justice [Commercial List] (the “Canadian Court”) refined the test for determining the location of a debtor’s center of main interest (“COMI”) under Part IV of the Companies’ Creditors Arrangement Act (the “CCAA”), which is the Canadian equivalent of Chapter 15 of the U.S. Bankruptcy Code.
In Ontario, a debtor-in-possession (“DIP”) lender is usually granted a charge by the Ontario Superior Court of Justice (Commercial List) (the “Court”) over the assets of the debtor which is under the protection of the Companies’ Creditors Arrangement Act (the “CCAA”) to secure the repayment of the DIP loan. The priority of the charge is set out in the order granting the charge. Most such orders provide that prior to exercising its rights and remedies against the debtor after an event of default, the DIP lender must appl
While the winding up of a company is a last resort in the context of shareholder oppression, the discretion to order a winding up will be exercised by the Courts if the circumstances dictate that it is the most appropriate remedy, such as where it will provide finality and certainty for the shareholders without undermining the value of the company’s projects to a potential purchaser on winding up.
In Re Crystallex, 2012 ONCA 404, the Ontario Court of Appeal unanimously upheld unusually broad DIP financing arrangements granted pursuant to section 11.2 of the Canadian Companies' Creditors Arrangement Act (CCAA) despite the vociferous objections of substantially all of Crystallex’s creditors. By dismissing the appeal, the Court endorsed the supervising CCAA judge’s approval of: