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

UBS terminated its ISDA Master and FX transactions with Lehman Brothers Inc., was obligated to return about $23 million in collateral, wanted to set-off against that $23 million amounts owing by LBI to UBS affiliates as contemplated by the cross-affiliates set-off provision.

If you were waiting to hear what the English Court of Appeal had to say about the lower court decision in Marine Trade S.A. v. Pioneer Freight Futures Co. Ltd. you’ll be disappointed, as the appeal was dismissed by consent of the parties on October 22, 2010.

That darn Lehman Brothers bankruptcy sure is raising some interesting insolvency issues for derivatives market participants (and their lawyers of course). It’s interesting (at least for us insolvency nerds) to think about how some of those issues might play out under Canadian insolvency laws. Here are some thoughts on one of the recent cases with my Canadian spin.

The recent economic turmoil has brought to the forefront concerns by licensees as to what happens to their rights to licensed intellectual property upon the bankruptcy of a licensor. Unfortunately, under Canadian law, the answer to that question is not clear.

Background