On December 30, 2019, the Supreme Court of Newfoundland and Labrador (the “NLSC”) released its decision in Re Norcon Marine Services Ltd.¹ (“Norcon Marine”), dismissing both an application by a debtor for continuance of its Bankruptcy and Insolvency Act² (“BIA”) proposal proceedings under the Companies’ Creditors Arrangement Act³ (“CCAA”) and a competing application by a secured creditor for the appointment of a receiver.

In the Matter of System Building Services Group Limited (In Liquidation) [2020] EWHC 54 (Ch), the court confirmed that a director’s fiduciary duties continued after the appointment of an administrator or liquidator and that the subsequent purchase from the administrator/liquidator of a property at an undervalue was in breach of those duties. As a result, the property was declared to be held by the director on a constructive trust for the company.

On October 10, 2019, the Supreme Court of British Columbia (the “BCSC” or the “Court”) released its decision in 8640025 Canada Inc. (Re)¹ (“8640025 Canada”), denying an application to replace the monitor (the “Monitor”) in a Companies’ Creditors Arrangement Act² (the "CCAA") proceeding because the applicant was not a creditor and therefore had no standing to bring such an application.

On January 29, 2020, the Alberta Court of Appeal (the “Alberta CA”) released its decision in PricewaterhouseCoopers Inc. v Perpetual Energy Inc.¹ (“Perpetual Energy”), granting applications requiring a trustee in bankruptcy (the “Trustee”) to post security for costs on appeals brought by the Trustee.

The Quebec Court of Appeal’s unanimous decision in Gestion Éric Savard¹ reaffirms the super-priority ranking of CCAA² DIP financing³ over regular unpaid post-filing obligations, absent steps being taken to reverse this usual order of priorities.

In 7636156 Canada Inc. v. OMERS Realty Corporation¹ (“7636156 v. OMERS”), the Ontario Superior Court of Justice (Commercial List) (the “Court”) held that a bankrupt’s landlord was only entitled to have drawn down on a letter of credit by an amount equal to the landlord’s priority claim for three months’ accelerated rent, rather than by the full amount of the letter of credit, and ordered that the landlord pay over the excess to the bankrupt’s trustee.

The famous and respected Beales department store chain has entered into administration, an insolvency procedure provided under the Insolvency Act.

It is always depressing when any company fails and is forced to enter into administration, let alone a prestigious business such as Beales with its 139-year-old history. The ripples of such an insolvency not only impact upon its 1300 employees, but it is also painfully felt amongst its suppliers, landlords and of course the greater community.

Retail, as a sector, has long been under pressure from increased competition from online retailers, which has resulted in reduced footfall on the high street, affecting many companies, including many well-known names.

Between 2016 and 2019, 13 of 23 company voluntary arrangements (CVAs), which are used by UK businesses to reduce their debts, saw their group going into administration, while other companies that did not agree a CVA ended up seeking investors to buy the business.

What is a CVA?

On December 3, 2019, the Ontario Court of Appeal (the “OCA”) released its decision in 1732427 Ontario Inc. v. 1787930 Ontario Inc.¹ At issue was a pre-authorized debit payment processed by a supplier after a debtor filed a notice of intention to file a proposal under the Bankruptcy and Insolvency Act (the “BIA”). The motion judge had found this payment to be an exercise of a creditor remedy prohibited by the stay provisions of subsection 69(1) of the BIA.

It is extremely sad to hear the news that Katie Price has been declared bankrupt.

Although the stigma of bankruptcy may have disappeared, it is still an extremely sobering event when an individual fails financially and is declared bankrupt by a court. In an increasingly materialistic world, bankruptcy is an ever-common event in society.