In his recent decision inRoyal Bank of Canada v.Atlas Block Co. Limited, 2014 ONSC 3062 (“Atlas Block”), Justice Penny of the Ontario Superior Court of Justice (Commercial List) held that trust claims pursuant to section 8 of the Construction Lien Act (Ontario) (the “CLA”) do not survive the bankruptcy of the would-be trustee debtor.

In 2012, the Fifth Circuit ruled in In re Chilton that inherited IRAs constituted retirement funds within the “plain meaning” of §522 of the Bankruptcy Code and were thus exempt from the bankruptcy estate, under § 522(d)(12) (the federal exemptions). See our prior discussion of this case here.

After Chilton, many thought the issue was settled.

On December 19, 2013, the Ontario Court of Appeal held that the Registrar of Motor Vehicles (the “RMV”) cannot deny vehicle permits to individuals on account of pre- bankruptcy debts owing to the ETR Concession Company Limited (the  “ETR”). Based  on the  intent and  purpose of federal bankruptcy law to permit debtors to obtain a “fresh start,” it was concluded that the provincial act establishing the ETR conflicts with bankruptcy law and was, as a result, unconstitutional in part.

Background

The English Court of Appeal decision in Caterpillar v John Holt & Company, and its analysis of “retention of title” and “no set-off” clauses, will be of interest to commodity traders, compliance officers and legal counsel in industries dealing with energy and natural resources internationally.

On January 17, 2014, Chief Judge Kevin Gross of the Bankruptcy Court for the District of Delaware issued a decision  limiting the right of a holder of a secured claim to credit bid at a bankruptcy sale. In re Fisker Auto. Holdings, Inc.,  Case No. 13-13087-KG, 2014 WL 210593 (Bankr. D. Del. Jan. 17, 2014). Fisker raises significant issues for lenders who  are interested in selling their secured debt and for parties who buy secured debt with the goal of using the debt to  acquire the borrower’s assets through a credit bid.

Northern District of Oklahoma Chief Bankruptcy Judge Terrence L. Michael’s introduction to the opinion in In re Harrison (2013 WL 6859303) serves as a good introduction to this post:

In a November 20,2013 decision in the Companies Creditors’ Arrangement Act (the “CCAA”) proceedings of Aveos Fleet Performance Inc. and Aero Technical US, Inc.

One of the ironic issues for failing banks has been the fact that banks that they have had to continue to deal with their borrowers and depositors in the ordinary course of business even though they are already in the queue for resolution by the FDIC. So for example, loans continue to get renewed and documents executed. What happens if you renew a loan shortly before the bank fails, do you have some sort of defense to enforcement of the loan when the successor bank or the FDIC makes demand on you?

In the 2012 decision of SWP Industries Inc., Re, Justice McLellan of the Court of Queen’s Bench of New Brunswick (the “Court”) declined to lift the stay of proceedings one week in advance of its expiry, despite the assertion of material prejudice advanced by Bank of Nova Scotia (“BNS”).