The Alberta Court of Queen's Bench recently permitted a debtor to establish a "hardship" fund to pay obligations incurred prior to the debtor's CCAA filing to local suppliers operating in the debtor’s community.
As previously reported, the International Insolvency Institute will hold its Ninth Annual International Insolvency Conference at Columbia University in New York on June 18 and 19, 2009. This Conference is likely to be the finest international insolvency Conference of the year and has an exceptionally talented and prominent faculty that will address today’s critical international insolvency issues and developments. Among the highlights of the Conference are the following:
AbitibiBowater
As a result of the meltdown of the financial markets, lenders are severely constricting new credit facilities and refusing to renew expiring facilities. The Bankruptcy Code's chapter 11 provides a powerful mechanism for an otherwise viable business to restructure and extend its outstanding debt and in many cases, reduce interest rates on loan facilities.
As the pace of restructuring activity in Canada continues to accelerate (see the partial listing below), international creditors should be aware that there are credit risks in doing business with a company that is restructuring in either of Canada's two restructuring systems. (These are, briefly, the Bankruptcy and Insolvency Act which is generally used for small to medium sized restructurings and the Companies Creditors' Arrangement Act which is generally used for large cases and resembles proceedings under Chapter 11 of the United States Bankruptcy Code).
Canadian Superior
When H. Jason Gold was appointed liquidating trustee for the bankruptcy estate of Dornier Aviation (North America), Inc., (DANA) in early 2003, creditors were expected to receive as little as three cents per claim dollar. Despite these daunting prospects, Mr.
Liquidations of struggling enterprises can take several forms. While many people are familiar with the concept of a "bankruptcy liquidation," the structure of a liquidation in bankruptcy may vary depending upon the specific type of case. Additionally, bankruptcy is not the only forum for liquidation of distressed companies, only the most common. This article provides a synopsis of some of the various types of liquidations.
Chapter 11 Liquidations
On January 14, 2009, Nortel Networks Corporation obtained protection from its creditors under theCompanies' Creditors Arrangement Act. From a historical perspective, it represents a Canadian icon's fall from grace. It was once an industry heavyweight - at its height its market cap was $250 billion and accounted for two thirds of the total value of the Toronto Stock Exchange. As North America's largest maker of telephone equipment (and now into its 113th year), its problems were compounded by the global financial crisis and North American recession as well as by global competition.
As a result of the meltdown of the financial markets, lenders are severely constricting new credit facilities and refusing to renew expiring facilities. The Bankruptcy Code's chapter 11 provides a powerful mechanism for an otherwise viable business to restructure and extend its outstanding debt and in many cases, reduce interest rates on loan facilities.