St. Mary's Hospital is the first hospital in New Jersey to emerge from Chapter 11 bankruptcy and did so in less than one year. Since 2007, six hospitals have filed for bankruptcy, five of which have either closed or sold their assets in bankruptcy.
We know this publication is about dispute resolution, but what we really want to talk about in this article is avoiding insolvency and bankruptcy disputes.
“If Only You Had Come to Us Sooner”
In a recent decision released by Madam Justice Kent of the Alberta Court of Queens Bench (the “Court”) the Court declined to grant Octagon Properties Group Ltd. and certain affiliates (“Octagon” or the “Debtors”) relief pursuant to the Companies’ Creditors Arrangement Act, R.S.C. 1985 c.C36 (“CCAA”).
The bankruptcy and insolvency reforms passed by Parliament in 2005 and 2007 will at last come into force today, September 18th, 2009. While a small initial round of reforms dealing with employee wages were implemented in July 2008, today marks a more radical shift in Canadian insolvency law as the remaining amendments come into effect. The reforms will be applicable to any bankruptcy or insolvency proceedings started on or after today’s date. Key elements of the reforms will include:
Interim Financing, Administrative and D&O Charges
In theMatter of Forest and Marine Financial Corporation (2009) BCCA 319, the British Columbia Court of Appeal was called upon to consider whether a limited partnership qualifies for protection under the Companies Creditors’ Arrangement Act (“CCAA”). The Court also considered whether, in the circumstances of the case, a stay of proceedings should have been issued with respect to the limited partnership.
On May 8, 2009, the Honourable Madam Justice Hoy of the Ontario Superior Court of Justice (Commercial List) granted an Initial Order under the Companies’ Creditors Arrangement Act, R.S.C. 1985, c. C36, as amended (the “CCAA”) in respect of Gandi Innovations Limited (“Gandi Canada”), Gandi Innovations Holdings LLC (“Gandi Holdings”) and Gandi Innovations LLC (“Gandi Texas”) (collectively, the “Gandi Group”).
A. THE PROBLEM
Many charities and associations have cash flow challenges, particularly in the current economic situation. They usually budget to break even financially. If some funding does not materialize as expected, they may be forced to close down. Their directors may be at financial risk as a result.
As widely expected, GM and all of its domestic subsidiaries filed voluntary petitions under Chapter 11 of the Bankruptcy Code in the U.S. Bankruptcy Court for the Southern District of New York on June 1, 2009. Besides General Motors Corporation, the other three associated debtors are: Chevrolet-Saturn of Harlem, Inc., Saturn, LLC and Saturn Distribution Corporation. Please note that GMAC is not included in these bankruptcy filings.
Judge Arthur J. Gonzalez presided over hearings May 20, 2009, in this mega bankruptcy case. There were 21 matters on the agenda, as well as an emergency motion, that were heard or adjourned to a later date, in approximately two and a half hours of hearings (click here for a link to the audio file provided by the Clerk of the U.S. Bankruptcy Court for the Southern District of New York; it may take a moment to load before playing).
Our first update1 discussed various initial proceedings in the Chrysler bankruptcy cases. This update provides certain information on the Order Approving Bidding Procedures for the Sale of Substantially all of the Debtors’ Assets, which was entered by the court on May 7, 2009, and the Interim Order Approving a DIP Credit Facility and Authorizing the Debtors to Obtain Post-Petition Financing, which was entered by the court on May 4, 2009. The final DIP Financing and Sale hearings are scheduled for May 20, 2009, and May 27, 2009, respectively.