In 2017, the Alberta Court of Appeal upheld the lower court’s decision that the BIA prevailed over a conflicting provision in the provincial regulations promulgated by the Alberta Energy Regulator (AER).

On January 31, 2019, the Supreme Court of Canada (SCC) released its decision in Orphan Well Association, et. al. v. Grant Thornton Limited, et. al. – a case commonly known as Redwater.

On January 17, 2019, the Fifth Circuit held that a creditor is not impaired for the purpose of voting on a plan if it is the Bankruptcy Code (as opposed to plan treatment) that impairs a creditor’s claim. The court further held that a make-whole premium is a claim for unmatured interest which is not an allowable claim under Bankruptcy Code, absent application of the “solvent-debtor” exception which may or not apply—the issue was remanded to the bankruptcy court for decision.

On January 15th, 2019, the U.S. Bankruptcy Court for the Northern District of Ohio held that the end user of an electricity forward contact was not entitled to the benefits of the safe harbor provisions under Section 556 of the Bankruptcy Code. Section 556 allows a “forward contract merchant” to terminate a forward contract post-petition based on an ipso facto clause in the contract and exempts such actions from the automatic stay.

In 2018, several insolvency cases were litigated that will be of interest to commercial lenders in restructuring and insolvency proceedings. This article summarizes the core issues of importance to lenders in each of these cases. Status updates on the cases reported in our 2017 roundup of key developments in Canadian insolvency case law are included at the end of this article.

May 25, 2018

PRIORITY OF HST DEEMED TRUSTS

Canada v.Toronto-Dominion Bank

The recent restructuring proceedings of Concordia International Corp. (Concordia) demonstrate that the arrangement provisions of the Canada Business Corporations Act (CBCA) remain as a powerful tool for balance sheet restructurings in Canada. These provisions allow a company to submit a plan of arrangement for creditor and court approval in order to affect a balance sheet restructuring in a timely and efficient manner.

Retail Insolvencies in Canada Series, #4: Lender Perspectives

By Linc Rogers and Aryo Shalviri

This is the fourth and final instalment in a series examining large retail insolvencies in Canada from the perspective of various stakeholders. This article discusses retail insolvencies from the perspective of lenders to distressed Canadian retailers.

This article trails the successful emergence of Toys "R" Us Canada from Companies' Creditors Arrangement Act (Canada) (CCAA) protection following the acquisition of its shares by Fairfax Financial Holdings Limited.

The Eleventh Circuit recently found in favor of Blue Bell Creameries, Inc. by rejecting its own earlier dicta and explicitly expanding the preference payment defense known as “new value.” This provides additional protection for companies doing business with a debtor in the 90 days prior to bankruptcy.

THE SCOOP: BRUNO’S V. BLUE BELL

On May 22, 2018, the United States Court of Appeals for the Fifth Circuit issued its decision in Franchise Services of North America v. United States Trustees (In re Franchise Services of North America), 2018 U.S. App. LEXIS 13332 (5th Cir. May 22, 2018). That decision affirms the lower court’s holding that a “golden share” is valid and necessary to filing when held by a true investor, even if such investor is controlled by a creditor.

Justice R. Graesser of the Court of Queen’s Bench of Alberta (Court) recently released his decision in Royal Bank of Canada v.Reid-Built Homes Ltd. (Decision), where he held that the Court has the discretion, but not the obligation, to grant a super priority for receivers’ fees and disbursements ahead of the claims of secured creditors.