Once a Chapter 7 debtor receives a discharge of personal debts, creditors are enjoined from taking action to collect, recover, or offset such debts. However, unlike personal debts, liens held by secured creditors “ride through” bankruptcy. The underlying debt secured by the lien may be extinguished, but as long as the lien is valid it survives the bankruptcy.

A recent decision of the Ontario Superior Court of Justice (Commercial List) (the “Court”) in the receivership proceedings of The Clover on Yonge Inc.[1] (the “Clover Project”) has addressed the question of whether a debtor in receivership can avoid a sales process by redeeming its outstanding debt.

A recent decision in the Companies’ Creditors Arrangement Act (“CCAA”) proceedings of Bellatrix Exploration Ltd.[1] (“Bellatrix”) serves as a useful reminder to professionals that a

A Chapter 13 bankruptcy plan requires a debtor to satisfy unsecured debts by paying all “projected disposable income” to unsecured creditors over a five-year period. In a recent case before the U.S.

As Canadian businesses continue to grapple with decreased cash flow as a result of COVID-19, many are looking for ways to generate cash and remain viable. One such way is to sell non-core assets or divisions through a pre-packaged sale transaction.

Pre-Packaged Sale Overview

One of the objectives of the Bankruptcy Code is to ensure that each class of creditors is treated equally. And one of the ways that is accomplished is to allow the debtor’s estate to claw back certain pre-petition payments made to creditors. Accordingly, creditors of a debtor who files for bankruptcy are often unpleasantly surprised to learn that they may be forced to relinquish “preferential” payments they received before the bankruptcy filing.

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”).

A party who believes that a bankruptcy court erred in either granting or denying relief from the automatic stay needs to act fast to appeal such a decision. In the recently decided case of Ritzen Group, Inc. v. Jackson Masonry, LLC, the U.S. Supreme Court held that: “[A]djudication of a motion for relief from the automatic stay forms a discrete procedural unit within the embracive bankruptcy case” which “yields a final, appealable order when the bankruptcy court unreservedly grants or denies relief.”

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