Canadian restructuring and liquidation legislation provides struggling companies and bankruptcy trustees with powerful tools to restructure their affairs and maximize value for stakeholders. For example, in the right circumstances valuable contracts can be assigned, on notice to the counterparties, to buyers prepared to pay well for the rights conferred under the contracts. In such circumstances, the counterparty’s bargained for right to withhold its consent to an assignment can be effectively overridden by court order.
Bankruptcy trustees should clearly communicate to the bankrupt their intent to make a claim against the non-exempt equity in the bankrupt's property at the time of the assignment into bankruptcy, according to the recent decision of the British Columbia Supreme Court in Re Barter.1 A failure to communicate such an intent may result in the trustee being unable to realize the non-exempt equity or, as in Re Barter, the absolute discharge
In the recent decision of the Alberta Court of Appeal in Orion Industries Ltd. (Trustee of) v Neil's General Contracting Ltd.1("Orion Industries") the Court interpreted and applied the rule added as part of the 2009 amendments to section 95(2) of theBankruptcy and Insolvency Act ("BIA") which deals with preferential payments. That amendment provides that evidence of pressure by a creditor is inadmissible to support a preferential payment.
InRe Bock inc.1, a recent case decided under the Companies' Creditors Arrangement Act ("CCAA"), the Superior Court of Quebec made an order reviving a dealership agreement that was purported to be validly terminated by the manufacturer prior to the commencement of any insolvency proceedings.
On June 1, 2013, British Columbia's new Limitation Act (the "New Act")1 came into force, changing the limitation periods for filing civil lawsuits in British Columbia.
The Supreme Court handed down an important judgement last week in the case of BNY Corporate Trustee Services Limited v Eurosail - UK 2007 - 3BL PLC ("the Eurosail Case"), which needs to be considered by anyone who is a party to a contract which contains events of default relating to the insolvency of a party to that contract.
Background
On 8 March 2013 the Insolvency Service released details of a director's disqualification undertaking given by a John Boyd Blackwood, a Director of a rural business in Midlothian. He had given the undertaking not to act as a director of a limited company from 15 March 2013 for five years.
Matthew Purdon Henderson v. Foxworth Investments Limited and 3052775 Nova Scotia Limited
Inner House case of some complexity in which the Liquidator of the Letham Grange Development Company sought reduction of a security over the Letham Grange resort near Arbroath. The case involves a number of companies all controlled by a Mr Liu and his family.
The highly anticipated decision of the Supreme Court of Canada in Re: Indalex was released this morning.
Here are the key highlights:
It is fairly common for solicitors to act for both the petitioning creditor in an insolvency as well as for the insolvency practitioner appointed as liquidator. Of course, there is always the potential for a conflict of interest to arise and it can be tricky for solicitors, once involved, to be objective and determine when it is appropriate to withdraw from acting.