The Federal bank regulators which supervise banks have made a statement encouraging workouts necessitated by the coronavirus. Loans which would otherwise be classified as TDRs (Troubled Loan Restructurings) will not have to be classified as such under certain conditions. For example, if the workout was necessitated by the pandemic and if the loan was otherwise in good standing as of December 31, 2019. The government’s intent is clear: Everyone gains more by a workout or restructuring than by liquidation or litigation. Value is often severely diminished in bankruptcy or in a liquidation.

In previous weeks our Financial Services Updates have discussed certain proactive measures that lenders and borrowers can take in light of the COVID-19 pandemic. This week our update focuses on the ability of companies to terminate contracts in accordance with their provisions or disclaim or resiliate contracts in the context of a restructuring.

On March 11, 2020, the Court of Appeal for Ontario released its decision in Urbancorp Cumberland 2 GP Inc. (Re) 2020 ONCA 197 (“Urbancorp”), stating that a s.9(1) trust under Ontario’s Construction Act R.S.O. 1990, c. C.30 (“CA” or the “Act”) can be effective in insolvency proceedings under the federal Companies’ Creditors Arrangement Act R.S.C. 1085, c. C-36 (“CCAA”).

Faced with constantly evolving circumstances in these challenging times, officers and directors should not lose sight of what is arguably their most important corporate role–that is, as a fiduciary. The question, particularly as a corporation’s financial situation changes and restructuring is being considered, is: Who is that fiduciary duty owed to? Unfortunately, the answer depends on whether the corporation is insolvent or near insolvent, which is why being vigilant now will help avoid scrutiny by creditors later.

When Financial Stress Turns to Distress–Restructuring Tools to Avoid Disaster

Parts 1 and 2: Chapter 11 Checklist and What Else Is in the Toolbox

Introduction

A recent decision from the United States District Court for the Southern District of New York (the District Court) in the bankruptcy cases of Sears Holdings Corp. may loom large in a day and age when shopping mall operators are seeking creative alternatives to the traditional, retail-oriented anchor-store business model.

As we reported last week, on November 1, 2019, amendments to both the Bankruptcy and Insolvency Act (the “BIA”)

On November 1, 2019, major amendments to theBankruptcy and Insolvency Act (Canada) (the “BIA”) and the Companies’ Creditors Arrangement Act (Canada) (the “CCAA”) included in Bill C-97[1] and Bill C-86

Yesterday, the Alberta insolvency community breathed a collective sigh of relief as the Alberta Court of Appeal issued its long-awaited decision in Canada v.

As we summarized in a recent Financial Services & Insolvency Communiqué, Saskatchewan has introduced Bill 151 (the Bill) which amends The Personal Property Security Act, 1993 (Saskatchewan) (the PPSA or the Act).