The Supreme Court in Pioneer Urban Land and Infrastructure Limited vs. Union of India (Pioneer Judgment)[1], has upheld the constitutionality of the Insolvency and Bankruptcy Code (Second Amendment) Act, 2018 (Amendment Act)[2].
The Insolvency and Bankruptcy Code, 2016 (IBC) has been widely considered a landmark legislation that has brought about a paradigm shift in the recovery and resolution process.
However, during the implementation of the IBC over the past two years and eight months, several challenges have emerged, including:
The 2005 Report of the Expert Committee on Company Law (JJ Irani Committee Report) had noted that an effective insolvency law:
“should strike a balance between rehabilitation and liquidation. It should provide an opportunity for genuine effort to explore restructuring/ rehabilitation of potentially viable businesses with consensus of stakeholders reasonably arrived at. Where revival / rehabilitation is demonstrated as not being feasible, winding up should be resorted to.
The Reserve Bank of India (“RBI”) has issued the Reserve Bank of India (Prudential Framework for Resolution of Stressed Assets) Directions, 2019 (“New Framework”) on June 07, 2019[1] in which the RBI has continued the core principles of its circular dated February 12, 2018 (“February 12 Circular”) and has added provisions encouraging both informal and formal restructuring in India.
On February 12, 2019, the Court of Appeal of Alberta (Court) released its long-anticipated decision in Northern Sunrise County v. Virginia Hills Oil Corp. (Virginia Hills).
On February 4, 2019, the Quebec Court of Appeal (Court of Appeal) ruled in the restructuring proceedings of Bluberi Gaming Technologies Inc., now 9354‑9186 Québec Inc., et al. (Bluberi) that under the Companies’ Creditors Arrangement Act (Canada) (CCAA), creditors have a right to vote in their own self-interest. In so doing, the Court of Appeal reversed the lower court’s decision.
On January 31, 2019, the Supreme Court of Canada (SCC) released its decision in Orphan Well Association, et. al. v. Grant Thornton Limited, et. al. – a case commonly known as Redwater.
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 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.