Given the substantial amount of capital invested in Canadian businesses by American investors a considerable number of trust indenture documents are governed by US law and are “qualified” under the Trust Indenture Act of 1939 (the “TIA”).
As we reported in our March 2017 bulletin "And then there were none; Ontario has repealed the Bulk Sales Act", the Bulk Sales Act (Ontario) (the “BSA”) was repealed as a result of the coming into force of Schedule 3 of Bill 27, the Burden Reduction Act, 2017.
When a lender makes an interest bearing loan to a borrower for a fixed term, the contract may provide that the borrower cannot repay the principal sum before maturity. This is often referred to as a “no call” provision. The intent of this provision is to protect the lender’s expected return on its investment during the term of the contract. Otherwise, the lender could be faced with the loss of interest payments that the borrower would have otherwise paid to the lender.
WHO SHOULD READ THIS
- Insolvency practitioners, mortgagees or other secured creditors and their advisors.
THINGS YOU NEED TO KNOW
- Whilst the foreign resident capital gains withholding provisions (FRCGW) contain insolvency exceptions that exclude most asset disposal transactions undertaken in the insolvency area, it is important to recognise that not all insolvency transactions are excluded. Transactions by a mortgagee in possession may not be excluded.
WHAT YOU NEED TO DO
WHO SHOULD READ THIS
- Restructuring and insolvency professionals.
THINGS YOU NEED TO KNOW
- Understanding liabilities from a payroll tax perspective can be complex, particularly due to the broad nature of the grouping provisions.
- Unless care is taken situations may arise where restructuring and insolvency professionals will be grouped with client entities, potentially exposing personal entities to joint and several liability for client entity debts.
WHAT YOU NEED TO DO
Readers will recall that on 23 September 2016 we posted an article about recognition under the UNCITRAL Model Law on Cross-Border Insolvency (Model Law) of the Korean rehabilitation proceedings for Hanjin Shipping.
On November 16, 2016, the Ontario Ministry of Government and Consumer Services (“MGCS”) posted the Fall 2016 report (the “Report”)[1] of the Business Law Advisory Council (the ”Council”), which was formed by the MGCS in March 2016 to put forward recommendations for modernizing Ontario’s corporate and commercial statutes.
The insolvency profession (and the Queensland market in particular) has been abuzz this year with the issue of CORA – a shorthand reference to theEnvironmental Protection (Chain of Responsibility) Amendment Act 2016 (Qld).
What does it mean for insolvency practitioners? Can banks really be hit with a bill to clean up their borrowers’ environmental damage? Will turnaround and restructuring professionals refuse to accept appointments out of fear of falling foul of the new regime?
This post explains what you need to know.
‘Shipping steel, shipping steel . . .
Nobody knows, the way it feels
Caught between Heaven and the Highway
Shipping steel, shipping steel . . .’ 1
On 7 April 2016, Administrators were appointed to South Australian-based steelmaker and iron ore miner Arrium, which reportedly owed approximately AUD4.3 billion to its lenders, suppliers and staff. The appointment covered 94 direct and indirect subsidiaries of Arrium Limited (the Arrium Companies), which at the time employed around 8,100 employees and contractors.
Unscrupulous advisors, unconscionably preying on desperate directors driven by the fear of losing everything, have created a boom in illegal phoenix activity. The below article, originally published on the McCullough Robertson white collar crime blog, Collared, sheds some light on the illegal phoenix, the gravity of the problem in Australia and considers what is being done to monitor and control the issue.