Almost every year amendments are made to the rules that govern how bankruptcy cases are managed — the Federal Rules of Bankruptcy Procedure. The amendments address issues identified by an Advisory Committee made up of federal judges, bankruptcy attorneys, and others. The rule amendments are ultimately adopted by the U.S. Supreme Court and technically subject to Congressional disapproval.

Secured Creditor’s Priority Over Unremitted GST/HST: SCC Grants Callidus Capital Corporation Leave to Appeal

On March 22, 2018, the Supreme Court of Canada granted Callidus Capital Corporation (the “Secured Creditor”) leave to appeal the Federal Court of Appeal decision that interpreted subsection 222(3) of the Excise Tax Act (Canada) (the “ETA”) as giving the Crown super priority to property received by a secured creditor from a tax debtor before bankruptcy.

On March 22, 2018, the Supreme Court of Canada granted Callidus Capital Corporation (the “Secured Creditor”) leave to appeal the Federal Court of Appeal decision that interpreted subsection 222(3) of the Excise Tax Act (Canada) (the “ETA”) as giving the Crown super priority to property received by a secured creditor from a tax debtor before bankruptcy.

Le 22 mars 2018, la Cour suprême du Canada a accordé à Callidus Capital Corporation (le « créancier garanti ») l’autorisation d’interjeter appel de la décision de la Cour d’appel fédérale dont l’interprétation du paragraphe 222(3) de la Loi sur la taxe d’accise (Canada) (la « LTA ») donne à la Couronne la priorité absolue sur les biens reçus par un créancier garanti d’un débiteur fiscal avant la faillite.

Over the last twenty years, courts have increasingly insulated transactions from avoidance as fraudulent transfers by invoking the so-called “settlement payment” defense codified in section 546(e) of the Bankruptcy Code. The safe harbor has been interpreted in the Second and Third Circuits and elsewhere as precluding debtors, trustees and creditors committees from clawing back otherwise objectionable pre-bankruptcy transfers solely because the money at issue flowed through a bank or other financial institution.

The Tempnology Trademark Saga. When it comes to decisions on bankruptcy and trademark licenses, the In re Tempnology LLC bankruptcy case is the gift that keeps on giving.

Just about every year amendments are made to the rules that govern how bankruptcy cases are managed — the Federal Rules of Bankruptcy Procedure. The amendments address issues identified by an Advisory Committee made up of federal judges, bankruptcy attorneys, and others. As the photo above reminds us, the rule amendments are ultimately adopted by the U.S. Supreme Court (and technically subject to Congressional disapproval).

Earlier this year, we wrote here about the decision in I.D.H. Diamonds NV v Embee Diamond Technologies Inc., 2017 SKQB 79, where Mr. Justice Layh held:

Affinity Credit Union 2013 v. Vortex Drilling Ltd. 2017 SKQB 228

The Supreme Court recently agreed to review the applicability of the safe harbor provision in section 546(e) of the Bankruptcy Code after differing interpretations of the statute created a split among the circuit courts. The ultimate outcome on the issue currently before the Supreme Court will undoubtedly impact how parties choose to structure their debt and asset transactions going forward.