Unprecedented times call for unprecedented solutions. This has never been more true than now as our world struggles through impactful changes to our lives, both at work and at play, as a direct result of the COVID-19 pandemic. As social distancing, stay-at-home orders, and sheltering-in-place have forced the closing of shopping centers and retail stores, bars and restaurants, movie theaters, and other venues, “business as usual” has largely, but hopefully only temporarily, ground to a halt.

On March 26, 2020, leave to appeal the decision of the Alberta Court of Appeal (the “Alberta CA”) in Canada v. Canada North Group Inc.¹ (“Canada North Group”) was granted by the Supreme Court of Canada (the “SCC”).² No reasons were given.

The global COVID-19 pandemic has resulted in widespread closures and suspension of operations, including within the justice system in Ontario. Ontario courts have issued a number of notices detailing the changes to regular court operations. In an effort to simplify the complicated situation already facing insolvency practitioners and their clients, we have summarized the current status of court operations germane to bankruptcy and insolvency matters.

Superior Court of Justice

Buried in the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act, which is expected to be passed by Congress and signed by the President today, are revisions to the Bankruptcy Code that are relevant to creditors dealing with distressed debtors. Most notably, the bill will impact the recently-enacted Small Business Reorganization Act of 2019 (the “SBRA”) by increasing the potential pool of qualified debtors.

The business, economic and financial fallout from the COVID-19 pandemic cannot be understated. While our families, friends, and clients are adjusting to these difficult, uncertain and stressful times – protecting our families, friends and communities from the spread of the virus, working from home, avoiding public spaces, and social distancing – businesses large and small are suffering from shutdowns, closures, breaks in supply chains, and the loss of business and revenue.

On March 6, 2020, the Ontario Court of Appeal (the “OCA”) released its decision in Royal Bank of Canada v. Bodanis (“Bodanis”),¹ holding that two debtors, each having an estate exceeding $10,000 in value, had appeals of their bankruptcy orders as of right under section 193 of the Bankruptcy and Insolvency Act²(the “BIA”) and thus did not need to seek leave to appeal.

Section 193 reads as follows:

On December 30, 2019, the Supreme Court of Newfoundland and Labrador (the “NLSC”) released its decision in Re Norcon Marine Services Ltd.¹ (“Norcon Marine”), dismissing both an application by a debtor for continuance of its Bankruptcy and Insolvency Act² (“BIA”) proposal proceedings under the Companies’ Creditors Arrangement Act³ (“CCAA”) and a competing application by a secured creditor for the appointment of a receiver.

On October 10, 2019, the Supreme Court of British Columbia (the “BCSC” or the “Court”) released its decision in 8640025 Canada Inc. (Re)¹ (“8640025 Canada”), denying an application to replace the monitor (the “Monitor”) in a Companies’ Creditors Arrangement Act² (the "CCAA") proceeding because the applicant was not a creditor and therefore had no standing to bring such an application.

On January 29, 2020, the Alberta Court of Appeal (the “Alberta CA”) released its decision in PricewaterhouseCoopers Inc. v Perpetual Energy Inc.¹ (“Perpetual Energy”), granting applications requiring a trustee in bankruptcy (the “Trustee”) to post security for costs on appeals brought by the Trustee.

The Quebec Court of Appeal’s unanimous decision in Gestion Éric Savard¹ reaffirms the super-priority ranking of CCAA² DIP financing³ over regular unpaid post-filing obligations, absent steps being taken to reverse this usual order of priorities.