Background

The claimant, Close Brothers Ltd (“Close”), a London based bank, sought to enforce its right to sell the defendant’s, AIS (Marine) 2 Limited (“AIS”) secured property following AIS’s default on repayment of a loan. The asset in question was a vessel and AIS mortgaged shares in the vessel to Close in order to secure a loan of €2,247,000 (the “Loan”). The purpose of the Loan was to assist AIS in purchasing the vessel, which cost €3,210,000.

Agreement

The recent restructuring proceedings of Concordia International Corp. (Concordia) demonstrate that the arrangement provisions of the Canada Business Corporations Act (CBCA) remain as a powerful tool for balance sheet restructurings in Canada. These provisions allow a company to submit a plan of arrangement for creditor and court approval in order to affect a balance sheet restructuring in a timely and efficient manner.

The Consultation

In March 2018, the Government published a consultation on its proposed reforms to the UK’s insolvency and corporate governance landscape. It sought views on ways to reduce the risk of company failures occurring through poor governance, whilst improving the insolvency framework to create a stronger business environment. The Government has now published its response to the consultation and we consider the key changes below.

Parent Company Director Accountability

Retail Insolvencies in Canada Series, #4: Lender Perspectives

By Linc Rogers and Aryo Shalviri

This is the fourth and final instalment in a series examining large retail insolvencies in Canada from the perspective of various stakeholders. This article discusses retail insolvencies from the perspective of lenders to distressed Canadian retailers.

This article trails the successful emergence of Toys "R" Us Canada from Companies' Creditors Arrangement Act (Canada) (CCAA) protection following the acquisition of its shares by Fairfax Financial Holdings Limited.

Introduction

Background to the Case In this case, the High Court scrutinised the conduct of the administrators appointed by a secured lender, Dunbar Assets plc, over a company, Angel House Developments Limited, whose sole asset was an office block in the London Docklands. The sole shareholder of the company had accused the administrators of breaching a number of duties.

Background to the Case

The Facts

Mr Walker (the “First Respondent”) was appointed as liquidator of Domestic & General Insulation Limited (the “Company”) under the member’s voluntary liquidation procedure. Several months later the liquidation of the Company was converted into a creditor’s voluntary liquidation and Scott Bevan and Simon Chandler (together, the “Applicants”) were appointed as joint liquidators. The appointment took place during a creditors meeting which was convened by the First Respondent.

Justice R. Graesser of the Court of Queen’s Bench of Alberta (Court) recently released his decision in Royal Bank of Canada v.Reid-Built Homes Ltd. (Decision), where he held that the Court has the discretion, but not the obligation, to grant a super priority for receivers’ fees and disbursements ahead of the claims of secured creditors.

This is the third instalment in a series examining large retail insolvencies in Canada from the perspective of various stakeholders. This article discusses insolvencies from the perspective of corporate parents of distressed Canadian retailers.