CMIC Mortgage Investment Corp v Rodriguez, 2010 BCSC 308; [2010] BCJ No 425

The bankrupt farmer ran an equestrian operation. She acquired two fabric covered barns, with one anchored by solid concrete blocks resting on the ground, and the second anchored into concrete foundations.

Fairbanx Corp v Royal Bank of Canada, 2010 ONCA 385 (Ont CA), on appeal from 2009 CanLII 55376 (Ont SC)

Fairbanx factored accounts for the debtor, Friction Tecnology Consultants Inc. Fairbanx made its Ontario PPSA registration misspelling the name as Technology, with an “H”. Two years later, the debtor obtained a line of credit from the Bank, which correctly named the debtor in its Ontario PPSA registration.

Caines, Re, 2010 NLTD 72

The bankrupt was the holder of a commercial fishing licence. He was discharged from his bankruptcy before the Supreme Court of Canada released its decision inRoyal Bank of Canada v. Saulnier (2008), 298 D.L.R. (4th) 193, in which that Court concluded that a fishing licence was “property” for purposes of the PPSA and BIA.

Able Automotive Ltd v Cameron-Okolita Inc, 2010 SKQB 34

Able brought a motion to appeal the bankruptcy Registrar’s decision that Able was a secured creditor for a certain amount, but disallowing its claim for certain costs, including insurance, a new engine for the vehicle, and storage charges, legal fees and costs.

The recent Ontario Court of Appeal decision in Murphy v Sally Creek Environs Corporation, 2010 ONCA 312 (“Sally Creek”) is a cautionary tale for Trustees in bankruptcy (“Trustees”) and the counsel who represent them.1 In that case, the Trustee’s fees and those of its legal counsel were drastically reduced on a taxation, a cost award was made against the Trustee personally and the Trustee’s conduct was impugned in a detailed decision of the Bankruptcy Registrar and the Court of Appeal.

In our Distressed Investor Alert dated December 23, 2009, we wrote that Bankruptcy Rule 2019, an often ignored procedural rule in U.S. bankruptcies, had returned to the public eye in light of the controversial revisions to Rule 2019 (“Revised Rule 2019”)1 proposed by the Committee on Rules of Practice and Procedure of the Judicial Conference of the United States (the "Rules Committee").

Scenario:

One more province has joined the ranks of extending creditor protection to registered savings plans. Alberta’s Civil Enforcement Amendment Act came into force on October 1, 2009 (the “Act”). It applies to registered retirement savings plans (RRSPs), registered retirement income funds (RRIFs), deferred profit sharing plans (DPSPs) and registered disability savings plans (RDSPs).

Fair Treatment

In dealing with collateral provided by a third party to support the obligations of the prime debtor, lenders and their counsel need to remember the impact of the federal Bankruptcy and Insolvency Act.

Ontario’s Personal Property Security Act (PPSA) was amended to broaden the definition of the word “debtor.” However, the Bankruptcy and Insolvency Act’s (BIA) definition of a “secured creditor” is still restricted to a person holding a charge or a lien “as security for debt due or accruing to the person (lender) holding the debt.”

Lehman Brothers Holdings Inc. (“LBHI”) and its affiliate and subsidiary debtors (collectively, “Lehman”) filed their proposed chapter 11 plan of reorganization in their jointly administered chapter 11 proceedings on Monday, March 15, 2010 (Docket No. 7572). Monday was the last day for Lehman to file a plan pursuant to section 1121(d) of the Bankruptcy Code in order for Lehman to maintain the exclusive right to file and obtain confirmation of a plan.¹