The Director of the Justice Department’s U.S. Trustee Program (USTP), which oversees the administration of bankruptcy cases, is about to change for the first time in nearly 20 years. Clifford White will be stepping down from the role and consumer advocate Tara Twomey will be taking up the mantle.

In the recent decision of Chin v Beauty Express Canada Inc. (“Chin”), the Ontario Superior Court of Justice considered the impact of an employee’s service with a prior employer on the employee’s entitlement to reasonable notice of termination.

A recent decision of the Ontario Court of Appeal invalidated an arbitration and forum selection clause in a commercial agreement in favour of having a dispute between the debtor and its former customer adjudicated within a receivership proceeding.

As discussed in prior posts and articles (here, here and

Reverse vesting orders (or “RVOs”) have become an increasingly popular and useful tool for maximizing recovery in complex insolvencies in Canada, particularly in circumstances where traditional alternatives of asset sales or restructuring plans are not effective or practical. RVOs are very attractive to purchasers of distressed businesses because they can efficiently preserve the value of permits, tax losses and other assets which cannot be easily transferred to a purchaser through an asset transaction.

The automatic stay is a procedural tool in a bankruptcy case that effectively halts efforts by creditors to collect on a debtor’s outstanding obligations. As discussed in more detail in our prior post, immediately upon the filing of a bankruptcy petition, a “bankruptcy estate” is created, which includes virtually all assets of the debtor.

Federal Rule of Bankruptcy Rule 3002.1 went into effect December 1, 2011. It was implemented to address a perceived problem in “cure and maintain” Chapter 13 cases (cases in which the debtor cures any pre-petition arrearage and maintains monthly post-petition payments on long-term loans) – that mortgage creditors were not providing the debtor with notice of post-petition payment changes and fees assessed post-petition, causing debtors to often exit a successful Chapter 13 with a delinquent loan.

On December 10, 2021, the Supreme Court of Canada (“SCC”) rendered its decision in Montréal (City) v.

Many creditors have been warned of the need to halt collection efforts once they are put on notice that a debtor has filed for bankruptcy. However, the “why” behind this warning, mainly the automatic stay, is often misunderstood or disregarded. Since violations of the automatic stay can have serious ramifications, it is crucial that creditors know what the automatic stay is, what it protects, and how to get relief from the stay so that the creditor can proceed with collection efforts.

What Is the Automatic Stay? What Does It Protect?

The Second Circuit’s August 2021 decision in In re Gravel, 6 F. 4th 503, has already received considerable attention and generated much debate over the last few months.