On December 19, 2013, the Ontario Court of Appeal held that the Registrar of Motor Vehicles (the “RMV”) cannot deny vehicle permits to individuals on account of pre- bankruptcy debts owing to the ETR Concession Company Limited (the  “ETR”). Based  on the  intent and  purpose of federal bankruptcy law to permit debtors to obtain a “fresh start,” it was concluded that the provincial act establishing the ETR conflicts with bankruptcy law and was, as a result, unconstitutional in part.

Background

Introduction

Early in his or her appointment a liquidator in a creditors' voluntary liquidation (CVL) should consider applying to the Court to convert the CVL to a Court ordered winding up in insolvency.  Conversion may benefit the unsecured creditors, in whose interests the liquidator acts, by enabling the liquidator to pursue claims and make recoveries not available in a CVL. 

The reasons liquidators have applied for conversion include:

In a November 20,2013 decision in the Companies Creditors’ Arrangement Act (the “CCAA”) proceedings of Aveos Fleet Performance Inc. and Aero Technical US, Inc.

In the 2012 decision of SWP Industries Inc., Re, Justice McLellan of the Court of Queen’s Bench of New Brunswick (the “Court”) declined to lift the stay of proceedings one week in advance of its expiry, despite the assertion of material prejudice advanced by Bank of Nova Scotia (“BNS”).

Voluntary administrators frequently obtain Court orders permitting notices to be issued to creditors electronically. Such orders are made under section 447A of the Corporations Act (the Act) on grounds of efficiency, cost and necessity. See Mothercare Australia Ltd (Administrators Appointed) [2013] NSWSC 263 and Creative Memories Australia Pty Ltd [2013] NSWSC 1294.

Introduction

The Full Court of the Federal Court of Australia has rejected an argument that the applicant for an order for a company to be wound in insolvency must prove that the company was insolvent at the "relation-back day" in addition to proving insolvency at the date of filing the application and the date of the hearing. 

It has long been standard practice for Court-appointed receivers, monitors and trustees in bankruptcy to include comprehensive disclaimer language in the reports they submit to Court in connection with insolvency proceedings. The reason is simple – these reports are relied on by the Court and other parties to the proceedings, and are often prepared using unaudited and unverified information obtained from management of the debtor company.

On April 2, 2013, Justice Mesbur of the Ontario Superior Court of Justice (Commercial List) granted an application brought by Business Development Bank of Canada (“BDC”) for the appointment of a receiver over the assets, undertakings and properties of Pine Tree Resort Inc. and 1212360 Ontario Limited, operating as the Delawana Inn in Honey Harbour, Ontario (together, “Delawana”).

On February 1, 2013, the Supreme Court of Canada (the “SCC”) released its long-awaited decision in Sun Indalex Finance, LLC v. United Steel Workers1 (“Indalex”). By a five to two majority, the SCC allowed the appeal from the 2011 decision of the Ontario Court of Appeal (the “OCA”) which had created so much uncertainty about the relative priorities of debtor-in-possession (“DIP”) lending charges and pension claims in Companies’ Creditors Arrangement Act (the “CCAA”) proceedings.