Individuals undergo bankruptcy proceedings for many reasons, chief among them to seek relief from their debts and obtain a fresh financial start. However, the opportunity for a fresh start can be limited when the bankrupt’s debts arise from securities fraud. In the Supreme Court of Canada’s recent decision in Poonian v.

On June 27, 2024, the United States Supreme Court issued its decision in Harrington v. Purdue Pharma LP, addressing the question of whether a company can use bankruptcy to resolve the liability of non-debtor third parties. The Supreme Court, in a 5-4 decision, held that the bankruptcy code does not authorize a release and an injunction that, as part of a plan of reorganization under Chapter 11, effectively seek to discharge the claims against a nondebtor without the consent of the affected claimants.

On June 27, 2024, the Supreme Court issued its opinion in Harrington v. Purdue Pharma L.P., 603 U.S. ____ (2024) holding that the Bankruptcy Code does not allow for the inclusion of non-consensual third-party releases in chapter 11 plans. This decision settles a long-standing circuit split on the propriety of such releases and clarifies that a plan may not provide for the release of claims against non-debtors without the consent of the claimants.

Corporate governance practices are truly put to the test in two instances: 1) the commencement of litigation; and 2) entry into the zone of insolvency. The latter (distressed circumstances) increases the likelihood of the former (claims against directors and officers).

When distressed circumstances do arise, it is critical to ensure that best practices are in place and adhered to. Often, there may be little time in a crisis to consider and adopt new governance practices given the speed at which events may unfold. Directors need to get it right, and quickly.

Fund sponsors continue to face a challenging fundraising market and many are sensitive to increasing investor demand for liquidity. Higher interest rates and public market dislocation continue to make capital-raising difficult, while decreased fund distributions are limiting capital available for new commitments, leading investors to prioritize liquidity and invest cautiously.

The Court of King’s Bench of Alberta (the Court) recently revisited the stringent boundaries on the types of claims that can be brought against court-appointed officers. The decision in North v Davison, 2024 ABKB 242 (the Decision) highlighted the protective measures that courts employ to safeguard the integrity and function of receivership proceedings against unfounded or speculative claims. In the Decision, the Court struck down a counterclaim against Ernst & Young Inc.

For most businesses, a decision to undertake an organisational change can mean a reduction in operational costs, a reduction in roles, an increase in efficiencies and streamlined decision-making. However, the announcement of a restructure can often leave staff of all levels feeling tense and uncertain. Effectively navigating organisational change is not something that happens by chance, it requires a clear plan, effective communication and a recognition of risks.

This article will help employers plan for organisational change, identify risks and manage communication.

In a proceeding brought by Mr Curran, in his capacity as the trustee for June Ellen Investment Trust (Plaintiff), to wind up Fitzgerald Housing Limited (formerly known as Kay Fitzgerald Housing Charity Limited) (Defendant), the New South Wales Supreme Court considered whether it was necessary to adjourn the winding up proceeding to allow the Defendant to advance a small business restructuring process (Restructuring).

Bankruptcy litigation can stem well beyond the primary bankruptcy proceedings. Continued litigation may be born out of disputes between bankrupts, bankruptcy trustees and other interested parties in respect of methods of asset liquidation.

In its recent German Pellets decision, the Fifth Circuit held that a creditor could not assert its indemnification defenses in a suit brought by the trustee of a liquidation trust because the Chapter 11 plan’s express language permanently enjoined the defenses and the creditor chose not to participate in the debtor’s bankruptcy despite having actual knowledge of it.