The economies of the United States (U.S.) and Canada are closely intertwined. As operations expand across the border, so too do the complexities associated with carrying on business - particularly the insolvency of a company spanning both jurisdictions. As such, understanding how to navigate the complexities of Canadian insolvency regimes is essential to successfully doing business in the country.
1. Legislation and court system
The year is 2012, and the biotech you founded has just received FDA approval for a wildly promising product with significant differentiation from other products in its class. You only have 35 employees, but begin to build a lean, incentive-based salesforce to launch your novel commercialization strategy built on a specialty distribution model, high-touch reimbursement support, aggressive marketing tactics, and premium pricing. Hiring a compliance officer is not a priority at this time.
On July 28, 2021, the Supreme Court of Canada (the "SCC") released its decision in Canada v Canada North Group Inc.[1] (2021 SCC 30) confirming that court-ordered super-priority charges ("Priming Charges") granted pursuant to the Companies' Creditors Arrang
Many describe the United States as Canada's most important trade partner. Cross-border insolvency proceedings between the two jurisdictions are frequent and the recognition by one country's court of the other's bankruptcy orders is an important tool in facilitating the restructuring of companies with operations that spread across North America. A recent decision from the Ontario Court of Appeal (leave to appeal of which was denied by the Supreme Court of Canada) invites us to reflect on the delicate balance between comity for foreign orders and Canada's sovereignty over domestic laws.
In In re KarcreditLLC [1], the U.S. Bankruptcy Court for the Western District of Louisiana was faced with two lenders with claims to one original stock certificate as collateral.
On July 15, the U.S. Court of Appeals for the Second Circuit ruled that private student loans are not explicitly exempt from a debtor’s Chapter 7 bankruptcy discharge.
The Uniform Commercial Code was established to provide predictability and conformity in commercial transactions. Certain states have adopted nonstandard UCC provisions, which create an unreliable and unpredictable market for secured creditors. In addition, statutory liens, which are liens arising under federal and state statute, may disrupt the priority of secured creditors’ interest in a debtor’s assets. In re First River Energy, L.L.C. (986 F.3d 914, 917 (5th Cir.
A strata wind-up is an excellent way to realize the economic potential of a multi-unit residential property (the "strata") by leveraging the value of each unit in the strata as a whole to a developer that may want to re-develop on the strata's property. This article summarizes the onset and development of this emerging sector in light of recent case law and current events.
Introduction to strata wind-ups
The Virgin Active restructuring plan judgment was released last week, with a resounding win for Virgin Active over the opposing landlords. Melanie Leech, on behalf of the British Property Federation, said, "This Restructuring Plan sets a dangerous precedent and demonstrates how the law is now allowing wealthy individuals and private equity backers to extract value from their businesses in good times but later claim insolvency, as simply a means to get out of their contractual obligations with property owners.
On March 19, in a matter of first impression, the Third Circuit Court of Appeals (Court) held that triangular setoff is not permissible in bankruptcy due to Bankruptcy Code Section 553(a)’s mutuality requirement, and that parties cannot evade that requirement by contracting around it. See In re Orexigen Therapeutics, Inc., 990 F.3d 748 (3d Cir. 2021).