​Iona Contractors Ltd. v. Guarantee Company of North America

The Alberta Court of Appeal released its much anticipated decision addressing the interaction between the trust provisions of the Builders’ Lien Act (“BLA”) and the Bankruptcy and Insolvency Act (“BIA”) in Iona Contractors Ltd. v Guarantee Company of North America, 2015 ABCA 240 on July 16, 2015.

The recent British Columbia Supreme Court decision in Yukon Zinc Corporation (Re), 2015 BCSC 836, provides some rare insight into the operation of provincial “miners lien” legislation in an insolvency context.

Background

The Alberta Energy Regulator’s (the “AER”) final phase of changes to the Licensee Liability Rating Program (the “LLR Program”) comes into effect on August 1, 2015. The AER’s Bulletin 2015-13 (found here) says that the implementation date was delayed from May 1 to August 1, 2015, to give licensees more time to understand the implications of, and prepare for, the Phase-3 program changes in light of current market conditions.

What is a Stalking Horse?

In the distressed M&A context, a stalking horse refers to a potential purchaser participating in a stalking horse auction who agrees to acquire the assets or business of an insolvent debtor as a going concern. In a stalking horse auction of an insolvent business, a preliminary bid by the stalking horse bidder is disclosed to the market and becomes the minimum bid, or floor price, that other parties can then outbid. 

Recent decisions in the Ontario courts have brought this issue to the forefront, which is salient during this time of economic uncertainty for the oil industry and its related environmental obligations. The courts have had to focus on balancing competing public interests: those of creditors and the general health and safety of the public when a debtor has an outstanding obligation to remediate its pollution.

Today, the Vermont Supreme Court issues its opinion in the Ambassador in Liquidation case striking down the estate’s previously-published 12/31/13 bar date for final Proofs of Claim. The Ambassador Ins. Co. liquidation has been in process since 1987.  After the estate obtained over $300,000,000 in reinsurance and settlement proceeds from its former auditing firm, the estate essentially became “solvent”—paying Priority Four claims at 100 percent (plus interest).

On October 27, 2014, the Delaware Supreme Court ruled that even inadvertent mistakes in UCC filings count, and the burden rests on the filing party to detect errors, and not on affected parties who come across them in a search. This ruling upsets a 2013 decision of a bankruptcy court and will ultimately determine the character of a $1.5 billion security interest in the General Motors (GM) bankruptcy.

Background

On Oct. 27, the Delaware Supreme Court ruled that even inadvertent mistakes in UCC filings count – the burden rests on the filing party to detect errors, and not on affected parties who come across them in a search. This ruling upsets the 2013 decision of the bankruptcy court and will ultimately determine the character of a $1.5 billion security interest in the General Motors (GM) bankruptcy.

Background

​The doctrine of federal paramountcy provides that where there is an inconsistency between validly enacted but overlapping provincial and federal legislation, the provincial legislation is inoperative to the extent of the inconsistency and the remainder of the provincial legislation is unaffected.

As bankruptcy practitioners will recall, the Supreme Court held in Stern v. Marshall, 564 U.S., 131 S.Ct. 2594, 2620 (2011) that bankruptcy courts, as non-Article III courts, “lack[] the constitutional authority to enter a final judgment on a state law counterclaim that is not resolved in the process of ruling on a creditor’s proof of claim,” even though Congress had classified these types of proceedings as core – and thus authorized federal bankruptcy courts to hear and decide them.