Dans le contexte en constante évolution des lois canadiennes en matière d’insolvabilité, le regroupement de patrimoines se révèle comme un recours puissant. Bien qu’il soit rarement utilisé, il est susceptible d’entraîner des répercussions importantes pour les entités débitrices visées et leurs créanciers. C’est d’ailleurs ce que souligne une décision récente de la Cour d’appel du Manitoba, laquelle met en avant cet élément complexe, mais crucial, du droit de l’insolvabilité.

REGROUPEMENT DE PATRIMOINES

This is the second in a series of four articles on why Fed.R.Bankr.P. 9031, titled “Masters Not Authorized,” needs to be amended to authorize the utilization of special masters in complex bankruptcy cases.

The focus of this second article is on how the exclusion of special masters from bankruptcy cases: (i) is without a sound reason, and (ii) is based on a history of haste and uncertainty.[Fn. 1]

Bankruptcy Rule 9031—The Prohibition

This overview is intended as an introductory summary to the Companies' Creditors Arrangement Act (CCAA), Canada’s principal statute for the reorganization of a large insolvency corporation. The CCAA applies in every province and territory of Canada, and even purports to have worldwide jurisdiction.

This is the first in a series of four articles on why Fed.R.Bankr.P. 9031, titled “Masters Not Authorized,” needs to be amended to authorize the utilization of special masters in complex bankruptcy cases.

The focus of this first article is on how special masters are already utilized, effectively, by federal district courts under Fed.R.Civ.P. 53 (titled, “Masters”).[Fn. 1]

Special Masters in Federal Courts

–A Brief History

In the ever-changing landscape of Canadian insolvency law, substantive consolidation emerges as a powerful yet rare remedy with substantial implications for debtor entities and their creditors, as highlighted by a recent decision from the Manitoba Court of Appeal, which sheds light on a complex yet crucial aspect of insolvency law.

SUBSTANTIVE CONSOLIDATION

Can the contempt remedy for a creditor’s violations of the discharge injunction in multiple bankruptcy cases throughout the land be imposed in a class action lawsuit?

Here’s a due process question that’s percolating before the U.S. Supreme Court and a related mediation issue:

A helpful analysis of statute of limitations issues for fraudulent transfer claims brought by a bankruptcy trustee under § 544(a)&(b) is provided in a recent Circuit opinion.

• The opinion is Lewis v. Takacs (In re Stone Pine Investment Banking, LLC), Case No. 21-1423, U.S. Tenth Circuit Court of Appeals (decided 12/19/2023).

Overview

You can’t make this stuff up. The legal issues are pedestrian. But the facts behind those issues are incredible!

Litigation History

Here’s the boring stuff first.

On January 8, 2024, the U.S. Supreme Court denies certiorari in Mann v. LSQ Funding Group, L.C. (Case No. 23-425). Here’s the procedural background:

Oral arguments happened on January 9, 2024, at the U.S. Supreme Court in U.S.Trustee v. Hammons.Here is a link to the transcript of those arguments.

The Hammons question is this: