In 2018, several insolvency cases were litigated that will be of interest to commercial lenders in restructuring and insolvency proceedings. This article summarizes the core issues of importance to lenders in each of these cases. Status updates on the cases reported in our 2017 roundup of key developments in Canadian insolvency case law are included at the end of this article.

May 25, 2018

PRIORITY OF HST DEEMED TRUSTS

Canada v.Toronto-Dominion Bank

The recent Court of Appeal decision in the case of Doherty -v- Fannigan Holdings Ltd [2018] EWCA Civ 1615 considers the issue of whether a failure to pay for shares, as provided for under an agreement between the parties is a debt on which a statutory demand can be based.

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.

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.

The Advocate General Kokott (AG) has given her opinion in Grenville Hampshire -v- The Board of the Pension Protection Fund [2018] (Case C-17/17). This challenges the level of compensation offered by the Pension Protection Fund (PPF) and could result in increased payments for members.

Background

Mr Hampshire initially brought the case to the Court of Appeal in July 2016, claiming that his pension was cut by 67 per cent when his company scheme was transferred into the PPF.

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.

There are two aspects of wrongful trading and misfeasance that are of interest (i) board directors (and those advising the board) must be aware of the duties that the directors are subject to in performing their role as directors and the liability that attaches to breach of those duties and (ii) companies may be affected by the wrongful trading/misfeasance of customers/suppliers which impacts on trading.

Jurisprudence canadienne récente en matière d’insolvabilité : ce que les prêteurs doivent savoir Linc Rogers, Caitlin McIntyre et Ilia Kravtsov L’issue d’un certain nombre de dossiers d’insolvabilité portés devant les tribunaux de diverses provinces du Canada en 2017 pourrait avoir une incidence importante sur les droits de réalisation et de recouvrement des prêteurs commerciaux dans le cadre de procédures de restructuration et d’insolvabilité.

Alberta Energy has increasingly been targeting insolvent lessees and the historical gas cost allowances claimed by those insolvent companies.

Alberta Energy deducts allowances for capital and operating costs and custom processing fees incurred and paid in Alberta for compressing, gathering and processing its royalty share of gas and gas products through the Crown share of allowable costs. Accordingly, there are three allowances available from the Crown: capital cost, operating cost and custom processing fee allowance.