You are probably aware of the useful restructuring and creditor protection process available to insolvent entities in the United States under Chapter 11 of the United States Bankruptcy Code. In Canada, more than one insolvency regime is available in respect of debtor companies in financial difficulty and those interested in acquiring such companies or their assets. However, because of its flexibility, the most commonly used Canadian regime for larger debtor companies or complicated restructurings is the Companies’ Creditors Arrangement Act (Canada) (the "CCAA").
We have prepared this Business Law Guide as a general overview of certain legal and business matters that may be relevant to a decision to establish or invest in a business in Canada.
- Introduction
The doctrine of equitable subordination in bankruptcy cases has long been recognized by U.S. courts and subsequently codified in the United States in section 510(c) of the U.S. Bankruptcy Code.1
The Supreme Court of Canada has recently granted leave to appeal from the judgment of the British Columbia Court of Appeal in Edward Sumio Nishi v. Rascal Trucking Ltd. This appeal focuses on the test for a resulting trust in the commercial context.
The U.S. Supreme Court ruled on May 29, 2012, that secured lenders have the right to credit bid their debt instead of having to pay cash in an auction of their collateral as part of a Chapter 11 plan of reorganization.
The U.S. Court of Appeals for the 11th Circuit recently issued its opinion in one of the largest fraudulent transfer litigations against lenders.
On March 9, 2012, the Ontario Superior Court decided several motions regarding five Ontario properties formerly owned by Nortel Networks Corporation, including one property in which Nortel retained a partial interest. The properties had been contaminated as a result of historical manufacturing on the properties.
When a contractor pays money into court to discharge a lien of a sub-contractor, can that money only be used to discharge that lien holder’s claim? Or is it available to pay the liens of all eventual lien holders? In Canadian Western Bank v.
On February 2 and 9, 2012, the Ontario Superior Court released two decisions in the ongoing proceedings of Timminco Limited and Bécancour Silicon Inc. (together, the Timminco Entities) under the Companies’ Creditors Arrangement Act (CCAA) that further develop the law regarding pension claim priorities in insolvency proceedings.
A U.S. bankruptcy judge in Delaware has held that the two-year "look-back" period in which a transfer occurring within two years of the bankruptcy petition filing date may be avoided, under Section 548 of the U.S. Bankruptcy Code, cannot be equitably tolled. After some inconsistent orders about whether the courts may broaden the look-back period, this decision should give greater certainty to lenders when evaluating their exposure upon the commencement of a bankruptcy case by a borrower.