The treatment of shareholder and other equity-related claims in the context of insolvency and reorganization proceedings in Canada was initially judge-determined and the case law generally accepted the premise that shareholders were not entitled to share in the assets of an insolvent corporation until after all the ordinary creditors have been paid in full.  In 2009 further clarity was brought to the issue by introduction of the “

There are a number of similarities between restructuring legislation in Canada and the United States.  Each of Canada and the United States have adopted a form of the UNCITRAL Model Law Cross-Border Insolvency in order to facilitate cooperation and efficient administration of cases with an international component.  In Canada this has occurred through implementation of both Part XIII of the 

Individuals who serve as directors or offices of public companies in Canada face an increasing amount of shareholder litigation and a complex web of legal and regulatory provisions that must be  managed, navigated and adhered to.  The challenge to directors only increases when the company is insolvent, on the eve of insolvency or otherwise in some form of financial distress.  If the insolvency is driven by a liquidity crisis the company may be hard-pressed to maintain day-to-day operations and preserve going concern value for stakeholder groups.  Alternatively, if the pr

A Commentary on Recent Legal Developments by the Canadian Appeals Monitor

Since our last post, the Supreme Court has released a significant trilogy of judgments involving issues of federal paramountcy and the Bankruptcy and Insolvency Act (the “BIA”).

In the spring of 2010, BioSyntech, a start-up biotechnology company, developing a cartilage-repair product, BST-Car Gel, filed a Notice of Intention to make a proposal under the Bankruptcy and Insolvency Act. In the subsequent bankruptcy proceedings, the intellectual property relating to the BST-Car Gel was sold.

The recent decision of the Supreme Court of the United Kingdom in Jetivia S.A. and Another v Bilta (UK) Limited (in liquidation) and Ors should make it easier to pursue claims against rogue directors. The Supreme Court held that, in instances where a company has suffered as a result of the unlawful behaviour of its directors, that behaviour cannot be attributed to the company to disallow the company, or its liquidators, from raising claims against directors for breach of their duties.

Background

On 29 April 2015 The Insolvency Service of the UK Government published updated insolvency statistics which include a breakdown of insolvencies that occurred in 2014 across various industry sectors including the construction industry.  There are separate tables of statistics for England and Wales and for Scotland.

The insolvency of Scottish Coal Company Ltd ("SCC") has given rise to two recent Scottish Court of Session cases regarding performance bonds – East Ayrshire Council ("EAC") v Zurich Plc (24 June 2014) and South Lanarkshire Council ("SLC") v Coface SA (27 January 2015). 

The insolvency trade body R3 have issued a useful guide to the insolvency process for creditors.  The guide can be found here.

A frequent criticism is that the insolvency process (and indeed insolvency practitioners) do not do enough to engage with creditors.  Partly this will be because of creditor apathy (who wants to throw good time after bad money?) but partly it is because creditors do not see the insolvency process as being structured to assist them.

The news that USC has taken steps to commence an insolvency process is further proof (if proof were needed) that despite what TS Elliot may have claimed, January really is the cruellest month.