In a decision with sweeping consequences for equipment lessors, the bankruptcy court (SDNY) in Republic Airways held that a liquidated damages provision in a true lease is an unenforceable penalty if it provides for the unconditional transfer of residual value risk or market risk only upon default, without a cognizable connection to any anticipated harm caused by the default itself. Importantly for lessors and lenders alike, the bankruptcy court held that the unconditional guaranties of such obligations in favor of the lessor violated public policy and were unenforceable.
Background
Virginia Hills Oil Corp. was a small publicly traded oil producer with assets in north central Alberta. Some of its assets were held through its subsidiary Dolomite Energy Inc. (collectively the "Debtors"). The Debtors' main secured creditors were the Alberta Treasury Branches and the Bank of Nova Scotia (the "Banks"). The Debtors also owned a pipeline that passed through three municipalities (the "Municipalities").
In the recent landmark decision of The Guarantee Company of North America v.
In Jaycap Financial Ltd v Snowdon Block Inc, 2019 ABCA 47 [Jaycap], the Alberta Court of Appeal recently reminded Receivers that they have a duty to be transparent and provide the Court with evidence to meet the burden of proof to the requisite standard for each application it brings.
On January 31, 2019, the Supreme Court of Canada released its landmark decision in Orphan Well Association v Grant Thornton Ltd, 2019 SCC 5 ("Redwater").
On January 31, 2019, the Supreme Court of Canada released its decision in Orphan Well Association v. Grant Thornton Ltd., popularly known as Redwater. In a 5-2 split decision, a majority of the Supreme Court allowed the appeal and held that the Alberta Energy Regulator’s (AER/Regulator) assertion of its statutory enforcement powers over an insolvent licensee’s assets does not create a conflict with the federal Bankruptcy and Insolvency Act (BIA) as to trigger the constitutional doctrine of federal paramountcy.
Today, the Supreme Court of Canada released its decision in Orphan Well Association v. Grant Thornton Ltd., known as Redwater.
Virtually all bankruptcy courts faced with the question of whether growers or dispensers of cannabis and cannabis products can take advantage of the protections afforded by the federal bankruptcy laws have said, no, they cannot.
R&I Alert Restructuring & Insolvency News January 2019, Issue 1 In This Issue: • Can a junior lien holder obtain discovery from a senior lien holder? 1 • Watch your language.
On August 26, 2018, the UK government issued its response to its consultation on insolvency and corporate governance. The consultation sought views on how the risk of company failure could be reduced by improving the corporate governance and insolvency framework.