Overview

This bulletin is the first of a Fasken series about the recent decision of the Court of Appeal of Yukon in the ongoing receivership proceedings of Yukon Zinc Corporation (“Yukon Zinc”), indexed as 2021 YKCA 2. The decision addresses several important issues, including: (i) the scope of Section 14.06(7) of the Bankruptcy and Insolvency Act (“BIA”), which creates the Crown’s super priority charge for environmental remediation over the real property of a debtor; and (ii) Crown claims relating to unfurnished security or future costs.

Le 2 décembre 2020, la Cour d’appel du Québec (la « Cour ») a rendu un arrêt important dans l’affaire Syndic de Montréal c’est électrique confirmant la décision du juge de première instance à l’effet que la Ville de Montréal (la « Ville ») ne détenait pas de sûreté sur les sommes détenues dans le compte bancaire de Montréal C’est Électrique (« MCE » ou la « débitrice »).

The year 2020 is drawing to an end and the construction industry is gearing up for what is typically referred to as the builders break over the December holidays. A lot of construction companies will find the 2020 builder’s break to be very different to those of previous years, due to the negative impact that the COVID-19 pandemic has had on the construction industry, and the world at large.

The Treasurer has announced major proposed reforms to Australia’s insolvency framework aimed at facilitating the restructuring of small to medium businesses (MSMEs) and streamlining their liquidation if rescue is not achievable (Reforms). The Reforms are intended to come into effect from 1 January 2021, after the suite of current insolvency protections introduced to address the economic impact of COVID-19, expire on 31 December 2020.

The Australian Government has announced that the operation of temporary COVID-19 relief measures for businesses in the hope of aiding distressed companies and preventing further economic breakdown will be extended until 31 December 2020.[1]

In its recent judgment involving the PAS Group of companies[1], the Federal Court held that rent payable by the PAS Group during an extension of the period in which an administrator had been excused from personal liability (Standstill Period) is an expense properly incurred by a ‘relevant authority in carrying on the company’s business’ and is therefore a priority debt under s 556(1)(a) of the Corporations

The Supreme Court of New South Wales has helpfully given guidance to the liquidators of the RCR Tomlinson Group on a number of unsettled questions that have challenged insolvency practitioners (particularly liquidators of construction companies) when assessing whether certain intangible rights and assets are circulating assets.

The questions include:

This week, the Federal Court published judgments in three unfair preference claims brought by the liquidators of the Gunns Group. We acted for the liquidators in each proceeding.

Times are changing rapidly with the current flow of Coronavirus measures introduced to support businesses in debt and distress.

We take a look at what creditors can (and can’t) do to help better protect their position.

I’m owed money. What can I do?

Certain recent government measures may impede your ability to take recovery or enforcement action at the present time. The good news is that many avenues remain available.

You cannot (in some cases):

On May 8, 2020, the Supreme Court of Canada (the "SCC") released its reasons for the ruling rendered on January 23, 2020, which allowed the appeal by 9354-9186 Québec Inc. and 9354-9178 Québec Inc. (collectively, "Bluberi")^[1]. The SCC's ruling set aside the Québec Court of Appeal's (the "Court of Appeal") ruling, thereby restoring the first instance judgment of the Superior Court of Québec ("Superior Court").