You ship goods to a customer that is having financial difficulties. The customer sends you a check for the goods. What do you do?

Cash it and potentially be sued for a preference after the customer files for bankruptcy

or

Don’t cash it, and have a claim in the ensuing bankruptcy

We are heading into the holiday season. It’s a Wonderful Life will be on television. And cryptocurrency bankruptcies will be in the news. Yesterday, BlockFi filed for bankruptcy. What does a seventy year old Frank Capra movie – about a bank run in a small town during the Great Depression – tell us about the latest crypto platform’s liquidity crisis? Will depositors get their money back? Is there any insurance for the creditors?

Introduction

The Ontario Superior Court of Justice’s decision in Carillion Canada Inc. clarifies how the principles in Montréal (City) v. Deloitte Restructuring Inc. (Montréal) should be applied to contingent obligations that are only quantified after the debtor company files for creditor protection.

In the receivership proceedings of Distinct Infrastructure Group Inc.

On July 13, 2022, the Court of Appeal for Ontario allowed an appeal from the Order of a bankruptcy judge in Sirius Concrete Inc. (Re), 2022 ONCA 524 (Sirius), which ruled that certain funds paid by a trade creditor formed part of the bankrupt’s estate. The issue on appeal was whether a constructive trust should be imposed over certain funds due to a claim of unjust enrichment arising from alleged fraudulent misrepresentations made by the bankrupt on the eve of its bankruptcy filing.

What this means for the shareholders of a business facing insolvency

A key temporary bankruptcy related response to the pandemic has been re-implemented and extended with the passage of the Bankruptcy Threshold Adjustment and Technical Corrections Act (the “Act”) which extends the increase in the subchapter V debt limit for eligible businesses to $7.5 million for another two years.

Overview

Au Québec, le droit de la consommation évolue régulièrement et la Loi sur la protection du consommateur (L.P.C.) continue de faire l’objet de plusieurs décisions des tribunaux chaque mois.

À l’occasion de la publication de ce nouveau bulletin de notre série en droit de la consommation, nous présentons les développements récents dans ce domaine sous l’angle des décisions des quelque 12 derniers mois de la Cour d’appel du Québec, qui apportent un éclairage sur des règles de la L.P.C.