The Third Circuit recently held that claims purchased from trade creditors by a claims trader will be disallowed under section 502(d) of the Bankruptcy Code when the seller of the claim received, and did not repay, a preference. In doing so, the United States Court of Appeals for the Third Circuit expressed its disagreement with a relatively recent decision in the United States District Court for the Southern District of New York which reached the opposite conclusion.

In the 2012 decision of SWP Industries Inc., Re, Justice McLellan of the Court of Queen’s Bench of New Brunswick (the “Court”) declined to lift the stay of proceedings one week in advance of its expiry, despite the assertion of material prejudice advanced by Bank of Nova Scotia (“BNS”).

A make-whole premium is a lump-sum payment that becomes due under a financing agreement when repayment occurs before the stated maturity date, thereby depriving the lender of all future interest payments bargained for under the agreement. Make-whole provisions, ubiquitous in the bond market, are becoming more prevalent in commercial loan transactions, including in the distressed context. That trend is spurred by favorable court rulings for lenders enforcing make-whole premiums when the borrower files for bankruptcy protection.

Unsecured creditors in chapter 11 cases face the prospect of two financial blows: the possibility of not receiving full payment of their claims and the cost of attorney's fees for defending their interests. But these creditors may be able to take comfort in a small but growing trend -- the ability to have the attorney's fees paid from the debtor's assets under the debtor's chapter 11 plan. This outcome occurs in only a small number of cases, and unsecured creditors would be advised to not assume their attorney's fees will be reimbursed by the debtor.

The "WARN Act" (Worker Adjustment and Retraining Notification Act) requires that larger employers provide 60 days' notice in advance of plant closings or other mass layoffs. This has long been in conflict with bankruptcy practice. A recent Fifth Circuit decision, In re Flexible Flyer Liquidating Trust, 2013 WL 586823, at *1 (5th Cir. Feb. 11, 2013), confirms that exceptions to the WARN Act apply in bankruptcy and interprets these exceptions more broadly than previous decisions.

It has long been standard practice for Court-appointed receivers, monitors and trustees in bankruptcy to include comprehensive disclaimer language in the reports they submit to Court in connection with insolvency proceedings. The reason is simple – these reports are relied on by the Court and other parties to the proceedings, and are often prepared using unaudited and unverified information obtained from management of the debtor company.

On April 2, 2013, Justice Mesbur of the Ontario Superior Court of Justice (Commercial List) granted an application brought by Business Development Bank of Canada (“BDC”) for the appointment of a receiver over the assets, undertakings and properties of Pine Tree Resort Inc. and 1212360 Ontario Limited, operating as the Delawana Inn in Honey Harbour, Ontario (together, “Delawana”).

On February 1, 2013, the Supreme Court of Canada (the “SCC”) released its long-awaited decision in Sun Indalex Finance, LLC v. United Steel Workers1 (“Indalex”). By a five to two majority, the SCC allowed the appeal from the 2011 decision of the Ontario Court of Appeal (the “OCA”) which had created so much uncertainty about the relative priorities of debtor-in-possession (“DIP”) lending charges and pension claims in Companies’ Creditors Arrangement Act (the “CCAA”) proceedings.

The Companies’ Creditors Arrangement Act¹ (the “CCAA”) is by far the most flexible Canadian law under which a corporation can restructure its business. When compared against theBankruptcy and Insolvency Act² (the “BIA”), the CCAA looks like a blank canvass and lends itself well to invention and mutual compromise.

In bankruptcy proceedings, is a class action superior to the claims administration process as a vehicle for resolving claims under the federal and New York State Workers Adjustment and Retraining Notification Act (the “WARN Act”)?  In Schuman v. The Connaught Grp., Ltd. (In re The Connaught Grp., Ltd.), Case No. 12-01051, Slip Op. (Apr.