On April 20, 2016, the Canadian federal government introduced Bill C-15, which is legislation that provides for, among other things, a bank recapitalization or “bail-in” regime for domestic systemically important banks (“D-SIBs”).

BAIL-IN

The treatment of shareholder and other equity-related claims in the context of insolvency and reorganization proceedings in Canada was initially judge-determined and the case law generally accepted the premise that shareholders were not entitled to share in the assets of an insolvent corporation until after all the ordinary creditors have been paid in full.  In 2009 further clarity was brought to the issue by introduction of the “

On March 2, 2016, Sports Authority, Inc. (“Sports Authority”) and six of its affiliates filed for Chapter 11 bankruptcy in Delaware.  The filing will significantly impact Sports Authority’s landlords and trade creditors.  In a press release, Sports Authority stated that it intends to close or sell approximately 140 locations and two distribution centers in the coming months.  The company is also seeking $595 million in post-bankruptcy financing to continue operations.  Sports Authority is a sporting goods retailer with 463 locations in 41 states and Puerto Rico.

Employers scored a big victory in In re Trump Entertainment Resorts, a case of first impression in the Third Circuit, which held that a debtor-employer can terminate their obligations under an expired Collective Bargaining Agreement (CBA) and implement the terms of a final offer.

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There are a number of similarities between restructuring legislation in Canada and the United States.  Each of Canada and the United States have adopted a form of the UNCITRAL Model Law Cross-Border Insolvency in order to facilitate cooperation and efficient administration of cases with an international component.  In Canada this has occurred through implementation of both Part XIII of the 

Individuals who serve as directors or offices of public companies in Canada face an increasing amount of shareholder litigation and a complex web of legal and regulatory provisions that must be  managed, navigated and adhered to.  The challenge to directors only increases when the company is insolvent, on the eve of insolvency or otherwise in some form of financial distress.  If the insolvency is driven by a liquidity crisis the company may be hard-pressed to maintain day-to-day operations and preserve going concern value for stakeholder groups.  Alternatively, if the pr

A Commentary on Recent Legal Developments by the Canadian Appeals Monitor

Since our last post, the Supreme Court has released a significant trilogy of judgments involving issues of federal paramountcy and the Bankruptcy and Insolvency Act (the “BIA”).

In the spring of 2010, BioSyntech, a start-up biotechnology company, developing a cartilage-repair product, BST-Car Gel, filed a Notice of Intention to make a proposal under the Bankruptcy and Insolvency Act. In the subsequent bankruptcy proceedings, the intellectual property relating to the BST-Car Gel was sold.

The Issue and Background

A recent court ruling highlights the need for robust governance practices for nonprofits, particularly those facing financial difficulties.  The Third Circuit Court of Appeals affirmed a jury’s award of $2.25 million in compensatory damages against former directors and officers of a bankrupt nonprofit corporation - personal liability for breach of fiduciary duties and “deepening insolvency.”¹  The court also affirmed punitive damages against the officer defendants, but vacated the award of punitive damages against the director defendants.