In the past two years, reverse vesting orders (“RVOs”) have gone from obscurity to being the tool of choice in many complex restructurings under the Companies’ Creditors Arrangement Act (the “CCAA”). As restructuring practitioners increasingly employ RVOs, it begs the question: Will RVOs replace traditional CCAA plans?
Distressed transactions in bankruptcy court have become big business. Sales under Section 363 of the bankruptcy code provide predictability and reliability (in the form of a court order delivering “free and clear” assets) under even the most turbulent of circumstances. Commonly known simply as “363 sales,” these transactions can provide an opportunistic purchaser with significant upside under the right circumstances. But the truly opportunistic buyer will need to buckle up and be prepared to move with lightning speed in a highly competitive and transparent forum.
Though bankruptcy filings are down in 2021, the expiration of the Paycheck Protection Program and reopening of the courts nationwide could lead to a rise in bankruptcy filings with many businesses still struggling to cope with the economic and supply chain aftereffects of the pandemic and consumer purchasing habits. These bankruptcies, in turn, will have an inevitable ripple effect on creditors and other claimants, whose abilities to collect on claims and exercise rights, are significantly restricted by the automatic stay.
On June 10, the Federal Trade Commission (FTC) filed an amended complaint for civil money penalties and other relief under Section 5 of the FTC Act prohibiting “unfair or deceptive acts or practices” and Section 521 of the Gramm-Leach-Bliley Act (GLBA) prohibiting the use of fraudulent statements to obtain consumer information.
On June 17, 2021, President Biden signed Senate Bill 475 into law, making “Juneteenth” a federal holiday. Because June 19th (tomorrow) falls on a Saturday this year, the day will be observed by federal government offices on June 18, 2021 (today).
This new law, revising the list of federal holidays in the U.S. Code, will affect consumer credit lenders’ operations. It is important for lenders to review their processes to determine how this new holiday will impact their operations.
In its recent decision in Atlas (Brampton) Limited Partnership v. Canada Grace Park Ltd., 2021 ONCA 221, the Ontario Court of Appeal (ONCA) clarified the requirements for foreclosure on investment property under the Personal Property Security Act (Ontario) (the PPSA).
Cryptocurrency has been recognized as “property” for the purposes of the Bankruptcy and Insolvency Act by the Ontario Superior Court of Justice (Commercial List) in Re Quadriga Fintech Solutions Corp. et al.,[1]the first Canadian case of its kind.
On September 2, 2020, the Fifth Circuit declined to void a fee award of nearly $2.3 million in favor of an employer that had prevailed on its trade secret theft claim against its former employee, because the employee willfully failed to comply with the bankruptcy court’s “extremely explicit” order regarding his objections to the award.
Background
The Ninth Circuit on June 1 affirmed a key bankruptcy principle that liens may survive and “pass through” the bankruptcy process even if the underlying claim secured by the lien is disallowed. The facts in Lane v. The Bank of New York Mellon (Ninth Cir. Ct. Of Appeals, No. 18-60059, June 1, 2020) are all too familiar – a mortgage loan originated by Countrywide Home Loans wound up in a huge pool of securities with The Bank of New York Mellon serving as trustee for the certificate holders. Countrywide had endorsed the promissory note in blank, which made it payable to the bearer.
This significant recent decision of the Supreme Court of Canada confirms (i) that a CCAA supervising judge enjoys broad discretion and the necessary jurisdiction to prevent a creditor from voting on a plan of arrangement when the creditor is acting for an improper purpose, and (ii) that litigation funding is not intrinsically illegal and that a litigation funding agreement can be approved by the Court as an interim financing in insolvency.