In In re Lehman Bros. Holdings Inc. 855 F.3d 459 (2d Cir. 2017), the United States Court of Appeals for the Second Circuit affirmed a district court order subordinating the claims of former Lehman Bros.
Asarco LLC v. Noranda Mining, Inc., 844 F.3d 1201 (10th Cir. 2017). In a Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) contribution action, the Tenth Circuit ruled that a mining company, whose liability for a contaminated site had been resolved in a settlement agreement approved by the bankruptcy court, could still seek contribution against other potentially responsible parties (PRPs), claiming that it overpaid its fair share of cleanup costs for the site. Id. at 1208.
On April 24, 2017, the Alberta Court of Appeal issued a decision in Orphan Well Association v Grant Thornton Limited, 2017 ABCA 124. The decision is arguably the past year’s most hotly anticipated and discussed decision in Alberta, despite involving bankruptcy proceedings of a relatively small junior oil and gas company. The Court of Appeal, in a 2-1 split, upheld the trial judge’s decision that a receiver can disclaim or renounce uneconomic assets that are subject to costly environmental liabilities.
The Court of Appeal of Ontario found in Toronto-Dominion Bank v. Konga that the interpretation of a guarantee is a question of mixed fact and law, entitled to deference on appeal. Further, for a guarantor to obtain a discharge from the guarantee, he must establish that the bank's demand caused the debtor's default.
The Lightstream decision confirms that Canadian courts have the jurisdiction under the CCAA to both: (i) incorporate and apply the oppression remedy; and (ii) where appropriate, when oppressive conduct has occurred, grant an order requiring a corporation to issue additional securities. However, such jurisdiction is limited and defined by the scheme and purpose of the CCAA.
In Re Lightstream Resources Ltd, 2016 ABQB 665 (Lightstream), the Court of Queen’s Bench of Alberta (Court) confirmed that it had jurisdiction to remedy oppressive conduct while a business is restructuring under the Companies’ Creditors Arrangement Act (CCAA). The decision also provides insight as to when a court might exercise its equitable jurisdiction to remedy oppressive conduct in a CCAA proceeding.
Background
On March 22, 2017, the Supreme Court in Czyzewski v. Jevic Holding Corp., 580 U.S. __ (2017) held that a bankruptcy court does not have the power to approve a structured dismissal of a bankruptcy case that violates the Bankruptcy Code’s priority scheme unless the affected parties consent.
From the public policy standpoint, there has been a shift towards more environmental stewardship in Canada, evidenced by heightened media attention on environmental issues and by an expanded legal framework relating to the management of environmental liabilities. For example, directors may be personally liable for violation of environmental statutes1 and may face reputational harm if the corporations they manage are found to have breached environmental rules or norms.
On December 10, 2016, the Forfeited Corporate Property Act, 2015 ("FCPA") came into force in Ontario. The FCPA has the effect of amending the Ontario Business Corporations Act ("OBCA") and the Corporations Act. There are also similar amendments made to the Ontario Not-for-Profit Corporations Act ("ONPCA"), but they have not yet come into force. The legislation effects changes to forfeiture of corporate real estate and corporate record-keeping requirements.
Does a fine imposed on a debtor by the disciplinary committee of the Chambre de la sécurité financière after the date of the debtor's bankruptcy constitute a provable claim pursuant to section 121(1) of the Bankruptcy and Insolvency Act (the "BIA")?
Introduction