Novel corona virus and the global COVID-19 pandemic have had devastating impacts on financial markets and the economy generally as well as everyday life. All Canadian businesses now face challenges that were unimaginable even a month ago. Canadian corporations that entered 2020 with weak balance sheets and tightening access to capital, however, may find themselves standing at the precipice of difficult decisions.
The global COVID-19 pandemic, coupled with an ill-timed crude oil price war between Saudi Arabia and Russia, has in a matter of mere weeks materially disrupted the global marketplace. While we are months or years away from understanding the full impact of the coronavirus pandemic on the economy at large, it is increasingly likely that we may be sliding into a recessionary period. We anticipate that businesses will need to restructure in one way or another to deal with immediate liquidity needs, or long-term financial health.
The construction industry is one of many that may be strained as a result of the current COVID-19 global pandemic. And the insolvency of any party in the construction pyramid often impacts many of the other parties in the same structure. Consequently, prudence in the construction business calls for general awareness of key issues at the intersection of construction and insolvency law.
Coronavirus (COVID-19) has sent shock waves through global markets, businesses and supply chains. Boards of directors and senior management of businesses are likely asking themselves some tough questions. For instance:
1. What should we be doing to protect our employees and operations?
2. Can boards be responsible if employees get sick from COVID-19?
3. Do we really understand the risks to our business operations from COVID-19?
4. What happens if our supply chain vendors fail to perform their contracts with us?
The U.S. Court of Appeals for the Ninth Circuit recently rejected a loan servicer’s appeal from a Bankruptcy Appellate Panel’s ruling to remand to the lower bankruptcy court a punitive damages award for alleged discharge violations.
In so ruling, the Court held that it lacked appellate jurisdiction regarding the Bankruptcy Appellate Panel’s ruling as to the punitive damages award, but affirmed the Bankruptcy Appellate Panel’s denial of the debtors’ motion for appellate attorney’s fees.
The U.S. Bankruptcy Court for the Eastern District of Pennsylvania recently held that a debtor alleged a plausible claim against a mortgage loan servicer under the federal Fair Debt Collection Practices Act (FDCPA) based on the servicer’s proof of claim filed after obtaining a foreclosure judgment.
The U.S. Court of Appeals for the Ninth Circuit recently affirmed the dismissal of a consumer’s Truth in Lending Act (TILA) claim for lack of subject matter jurisdiction, holding that the claim was barred by the jurisdiction-stripping provision of the federal Financial Institutions Reform, Recovery, and Enforcement Act (FIRREA).
A copy of the opinion in Shaw v. Bank of America is available at: Link to Opinion.
Canada and Brazil share a long and significant common history of business and investment. Over a century ago, Canadian companies were heavily involved in building electrical and other infrastructure in São Paulo and Rio de Janeiro. Today, over 50 public companies listed on the TSX and TSX-V have substantial assets and operations in Brazil. In 2018, direct investment between the two countries exceeded $14 billion in each direction.
The U.S. Court of Appeals for the Fifth Circuit recently reversed the denial of a lender’s motion to compel arbitration in an adversary bankruptcy proceeding for allegedly violating the federal Truth in Lending Act (TILA), holding that — despite conflicting clauses in two different relevant agreements — the parties had entered into a valid arbitration agreement that delegated the threshold issue of arbitrability to the arbitrator.
Over the past year, bankruptcy filings have increased. We are projecting 768,000 filings by the end of the 2019 year — 61% of the filings as chapter 7, 37% as chapter 13, and 2% as chapter 11 and 12 filings. This is a 2% increase from the prior year. Commercial filings are at 5,542 filings compared to 5,108 in 2018.
Increased Filings in Commercial Sector, Especially Retail, Medical and Transportation