Introduction
Commercial insolvencies are expected to steadily increase in the near-term due to higher interest rates, supply chain disruption and corresponding increased commodity costs. A rise in commercial insolvencies will increase the likelihood that businesses will be impacted by a formal insolvency proceeding, whether as a creditor, supplier, customer or other stakeholder. It is, therefore, important for businesses to understand how to strategize in the context of both newly initiated and ongoing insolvency proceedings.
Commercial insolvencies are expected to steadily increase in the near-term due to higher interest rates, supply chain disruption and corresponding increased commodity costs. A rise in commercial insolvencies will increase the likelihood that businesses will be impacted by a formal insolvency proceeding, whether as a creditor, supplier, customer or other stakeholder. It is, therefore, important for businesses to understand how to strategize in the context of both newly initiated and ongoing insolvency proceedings.
"Job-Cuts", "Lay-Offs" and "Restructures" are all common words that have recently featured in global media reports. It is no different in New Zealand, with a number of companies making cost-saving measures including shrinking their pool of employees. Restructures and redundancies can be difficult and sometimes messy processes and are not easy for anyone involved. Even more so, New Zealand has robust employment legislation that includes multiple safeguards that should be considered before a lawful decision is made to disestablish a role.
The Supreme Court has brought the Mainzeal saga to an end by holding the directors liable and awarding compensation of $39.8 million (plus 10 years of interest). The outcome effectively endorses the lower courts' criticisms of the directors' conduct and awards a similar amount of compensation to that of the High Court in February 2019.
Le 27 avril 2023, le projet de loi C-228, Loi sur la protection des pensions (« LPP ») a reçu la sanction royale et est entré en vigueur au Canada. Comme la LPP vient modifier considérablement le traitement des exigences au titre des régimes de retraite dans le cadre des procédures d’insolvabilité, il y a lieu pour les prêteurs de veiller à bien comprendre la nature et les répercussions de cette loi.
Background
Last Friday in California, Silicon Valley Bank (SVB) was shut down by its local regulator and the Federal Deposit Insurance Corporation (FDIC) was appointed as receiver. Urgent regulatory action to prevent systemic risk in the USA and UK has followed.
Restructuring and Insolvency 2022/23: The year that was and what's to come
We take a look back at all the major developments in Restructuring and Insolvency law for 2022 and get a taste of what's yet to come in 2023 and beyond.
You can access the summary version of this update HERE (PDF).
Court exercises discretion to grant examination order
18 February 2022
Commercial insolvency can affect stakeholders located in multiple jurisdictions and possessing diverse legal rights. A recent notable trend in Canadian insolvency law is the centralization in insolvency proceedings, where courts have recognized that an effective restructuring of an insolvent business may depend on the centralization of stakeholder claims in a single proceeding. This applies even when such an approach would be inconsistent with the parties’ contractual rights, statutory laws or Canada’s federal structure outside of the insolvency context.
In the recent case of Peace River Hydro Partners v. Petrowest Corp., 2022 SCC 41 (Peace River), the Supreme Court of Canada (the SCC) clarified the circumstances in which an otherwise valid arbitration agreement may be held to be inoperative in the context of a court-ordered receivership under the Bankruptcy and Insolvency Act, R.S.C., 1985, c. B-3 (the BIA).
BACKGROUND