Regulation is not having the desired effect in reducing insolvency in the construction industry

This is not a ‘shock and awe’ article. I did not design it to scare readers into believing that the industry is about to see a lot of damaging contractor collapses.

On November 10, 2022, the Supreme Court of Canada (the "SCC") released its long-awaited decision in Peace River Hydro Partners v Petrowest Corp., 2022 SCC 41(“Peace River”), which addresses the interaction between insolvency law's single proceeding model and arbitration law’s emphasis on contractually bargained-for rights – an interaction often described as “a conflict of near polar extremes”.

“Controlling the controllables” should be the main focus of contractors.

When I am struggling to focus on tasks, my “go-to aid’’ is to sit and write down things I can control. Invariably, as a result of this process, I end up identifying things that I cannot control. It is always occupying my thinking.

I then proceed to unload these very unhelpful intruders from my thinking and wham, away I go. This time focused on important things I have control of.

The long awaited reforms to Cayman Islands restructuring laws will come into force on 31 August 2022. The formal gazetting of these laws today (29 July 2022) has helpfully provided a hard-and-fast commencement date.

Debtors will now be able to file in the Cayman Islands court for the appointment of restructuring officers and obtain an immediate stay on unsecured creditor action, without the need to file a winding up petition.

These new proceedings, while retaining all that is positive with the prior law, will significantly enhance the Cayman Islands restructuring regime by:

Anti phoenix licensing provisions are catching Security of Payment culprits and victims.

Anti phoenix licensing provisions are catching Security of Payment (SOP) culprits and victims in a Covid-19 ‘perfect storm’. These provisions are designed to prevent people from lawfully and personally contracting if they are associated with company collapses. This also includes being meaningfully involved with the contracting companies.

The Ontario Superior Court of Justice (Commercial List) (the “Court”) in Re Harte Gold Corp.,^[1]issued its first published decision on the use of reverse vesting orders (“RVOs”) finding that the

Industry insolvencies are expected to increase in the construction industry in 2022. I will discuss in this article how Project Trusts will impact affected parties.

The legislation giving effect to Trusts, the Building Industry Fairness (Security of Payment) Act 2017(BIFA), was initially based on the establishment of ‘Project Bank Accounts’ (PBAs).

In this article, I observe that insolvencies in the Queensland construction industry have remained at the same concerning level for years and I ask:

Will Statutory Trusts result in a reduction?

We will only know the answer to this question with certainty after the complete rollout is finished in 2023 but in the meantime, some steps can be taken today to control the risks associated with Trusts Compliance. In this article I consider:

I have written approximately 130 Helix Legal articles where I have focused on conveying information to readers concisely, factually and always looking to be positive.

I do not like ‘shock and awe’ articles where the clear intent is to scare people into doing something. There are much better ways to engage with people.

However, on the other hand, I have never shied away from raising awareness on significant industry issues that are confronting, and indeed very uncomfortable to talk about.

Au cours des deux dernières années, les ordonnances de dévolution inversée (« ODI ») sont passées de concept inaperçu à l’outil de choix dans de nombreuses restructurations complexes menées en vertu de la Loi sur les arrangements avec les créanciers des compagnies (la « LACC »). Comme les spécialistes en restructuration recourent de plus en plus aux ODI, la question se pose : les ODI remplaceront-elles les plans traditionnels pris en vertu de la LACC?