In 7636156 Canada Inc. v. OMERS Realty Corporation¹ (“7636156 v. OMERS”), the Ontario Superior Court of Justice (Commercial List) (the “Court”) held that a bankrupt’s landlord was only entitled to have drawn down on a letter of credit by an amount equal to the landlord’s priority claim for three months’ accelerated rent, rather than by the full amount of the letter of credit, and ordered that the landlord pay over the excess to the bankrupt’s trustee.

On December 3, 2019, the Ontario Court of Appeal (the “OCA”) released its decision in 1732427 Ontario Inc. v. 1787930 Ontario Inc.¹ At issue was a pre-authorized debit payment processed by a supplier after a debtor filed a notice of intention to file a proposal under the Bankruptcy and Insolvency Act (the “BIA”). The motion judge had found this payment to be an exercise of a creditor remedy prohibited by the stay provisions of subsection 69(1) of the BIA.

Currently there are no clear laws specifically addressing the means for addressing insolvency issues for debtors and creditors involved in the Cannabis industry. Like the industry itself, the laws are evolving. Using a Cannabis grower business as an example, at this time the Federal Court system is not available to address such entities insolvency issues.

On November 14, 2019, the Alberta Court of Appeal (the “ABCA”) released its decision in PricewaterhouseCoopers Inc. v. 1905393 Alberta Ltd. (“1905393 Alberta”),¹ dismissing an appeal of an approval and vesting order made in the context of a receivership proceeding.

In Canada v. Canada North Group Inc., 2019 ABCA 314, the Court of Appeal of Alberta (the “ABCA”) upheld the decision of the Court of Queen’s Bench of Alberta (the “Lower Court”), which held that the Companies’ Creditors Arrangement Act (the “CCAA”) permits courts to subordinate statutory deemed trusts in favour of the Crown to court-ordered insolvency priming charges.

On November 1, 2019, a number of amendments to the Bankruptcy and Insolvency Act (the “BIA”) and the Companies’ Creditors Arrangement Act (the “CCAA”) will come into force pursuant to the Canadian federal government’s budget implementation legislation for 2018 and 2019.

Over the years, much has been written about the Bankruptcy Code’s treatment of small businesses, and the American Bankruptcy Institute Commission’s testimony to Congress this summer made clear that the existing law fell short of providing necessary relief for small businesses. For example, of the 18,000 small business bankruptcy cases filed between 2008 and 2015, less than 27% of those cases resulted in confirmed plans of reorganization. And these numbers excluded countless small businesses that, for a variety of reasons, did not or could not seek bankruptcy relief. See Robert J.

Over the past several years, much has been written about how numerous bankruptcy courts have interpreted and enforced bankruptcy and insolvency-related provisions in intercreditor agreements, subordination agreements and other “agreements among lenders” when they may affect a debtor and its estate.

Vesting orders have become one of the most powerful tools in an insolvency professional’s toolkit, providing a purchaser with the comfort that the encumbrances contributing to the debtor’s financial difficulties cannot follow to the new owner. In light of their importance, Canadian insolvency and banking professionals were understandably anxious when the Ontario Court of Appeal (the “OCA” or the “Court”) recently asked for submissions on whether receivership vesting orders can extinguish third party interests in land in the nature of a Gross Overriding Royalty (a “GOR”).1

In an April 30, 2019 endorsement accompanying a receivership order made in the matter of Royal Bank of Canada and D.M. Robichaud Associates Ltd. (“D.M. Robichaud”), Justice Hainey of the Ontario Superior Court of Justice, Commercial List (the “Court”) held that the receiver’s charge and the receiver’s borrowings charge should have priority over deemed trusts under provincial construction legislation.1