The Alberta Energy Regulator’s (the “AER”) final phase of changes to the Licensee Liability Rating Program (the “LLR Program”) comes into effect on August 1, 2015. The AER’s Bulletin 2015-13 (found here) says that the implementation date was delayed from May 1 to August 1, 2015, to give licensees more time to understand the implications of, and prepare for, the Phase-3 program changes in light of current market conditions.

What is a Stalking Horse?

In the distressed M&A context, a stalking horse refers to a potential purchaser participating in a stalking horse auction who agrees to acquire the assets or business of an insolvent debtor as a going concern. In a stalking horse auction of an insolvent business, a preliminary bid by the stalking horse bidder is disclosed to the market and becomes the minimum bid, or floor price, that other parties can then outbid. 

Recent decisions in the Ontario courts have brought this issue to the forefront, which is salient during this time of economic uncertainty for the oil industry and its related environmental obligations. The courts have had to focus on balancing competing public interests: those of creditors and the general health and safety of the public when a debtor has an outstanding obligation to remediate its pollution.

​The doctrine of federal paramountcy provides that where there is an inconsistency between validly enacted but overlapping provincial and federal legislation, the provincial legislation is inoperative to the extent of the inconsistency and the remainder of the provincial legislation is unaffected.

A recent decision at the Ontario Superior Court of Justice (Commercial List) brought to the fore the role of fairness opinions in solvent arrangement transactions. In Re ChampionIron Mines Limited (Champion) the court approved the arrangement but deemed the fairness opinion inadmissible on the basis that it failed to disclose the reasons underlying its conclusion.

Unlike real estate transactions where a lender can obtain title insurance, secured lenders are often relying upon the representations and warranties in their loan agreement and the borrower’s audited financial statements, if and when determining whether the collateral securing their loans is owned by the borrower or another pledgor.  After default, a lender may find itself in a precarious position whereby it is unable to foreclose on the collateral because it is not owned by its borrower and it does not have a pledge from the person that actually does own the property.  According

In Susi v. Bourke, 2014 O.J. No. 11

A Summary

In Susi v. Bourke, [2014] OJ No 11, the Ontario Superior Court of Justice held that when all of the directors of a corporation fail to comply with their fiduciary duties, none of them can seek a remedy for oppression.

Since the financial crisis, sales under Section 363 of the Bankruptcy Code have provided an increasingly popular way for secured creditors of distressed businesses to recover their loans.  However, despite the advantages of Section 363 sales, the significant expense and time required to conduct a Bankruptcy sale has caused secured creditors to pursue less comprehensive solutions.  One alternative for recouping value from a troubled loan is an Article 9 foreclosure sale under the Uniform Commercial Code (UCC).

A June 2013 decision from the United States Bankruptcy Court for the Eastern District of North Carolina Greenville Division, In re L.L. Murphrey Company, 2013 WL 2451368 (Bankr. E.D.N.C. June 6, 2013), highlights the importance of due diligence in connection with assignments of security interests.

On October 3, 2013, the Court of Appeal for Ontario issued two significant decisions1 on the interplay between provincial environmental remediation and federal insolvency orders. The cases are of interest to environmental and insolvency lawyers across Canada. They are equally of interest to taxpayers who foot remediation costs shifted through insolvency.

Background