One of the most vexing commercial insolvency issues is the competition between creditors with security on environmentally troubled property and environmental authorities looking for deep pockets to fix the environmental problems. From a creditor’s point of view, a recent Alberta decision is a potential respite from environmental obligations being imposed on creditors of the owners of environmentally troubled property.
As discussed in our May 2016 bulletin, New Rules for Asset Sales by Insolvent Producers (at least for now), the decision of the Court of Queen's Bench of Alberta in Re Redwater Energy Corporation, 2016 ABQB 278 ("Redwater") determined that provisions of the provincial legislation governing the actions of licensees of oil and gas assets did not apply to receivers and trustees in bankruptcy of insolvent companies, given the paramountcy of the Bank
Introduction
Introduction
The Alberta Court of Queen’s Bench decision in Redwater Energy Corporation Re, 2016 ABQB 278, written by Chief Justice Neil Wittmann, clarifies that the provisions of the Bankruptcy and Insolvency Act (BIA) addressing the environmental liability of trustees render certain provisions of provincial regulatory legislation addressing wells and pipelines inoperative to the extent they conflict with the BIA.
In a pivotal decision released May 19, an Alberta court ruled in favour of Grant Thornton Limited, the Receiver and Trustee in the Redwater Energy Corporation (Redwater) receivership and bankruptcy proceedings, upholding its right to disclaim Redwater’s non-producing oil wells and sell its producing ones. Gowling WLG served as co-counsel to Grant Thornton throughout the proceedings.
On May 18, 2016, the Court of Queen’s Bench of Alberta released its much anticipated decision in Re Redwater Energy Corporation, 2016 ABQB 278, which addressed the Oil and Gas Conservation Act (OGCA), the Pipeline Act and the
The Alberta Court of Queen’s Bench has released its highly anticipated decision in Redwater Energy Corporation (Re), 2016 ABQB 278 (“Redwater”).
In Alberta, regulations have historically prohibited purchasers of oil and gas assets from cherry picking operating interests in economic properties while leaving behind interests in uneconomic wells. This has had a significant negative impact on the ability of a receiver or trustee to market and sell assets owned by insolvent companies and on the prices those assets are able to attract.
A recent Alberta case1 has addressed the proposed use of a plan of arrangement under theCanada Business Corporations Act (“CBCA”) where proceedings under insolvency statutes may be more appropriate. In Connacher Oil, Connacher Oil and Gas Limited (“Connacher”) and 9171665 Canada Ltd.
The Supreme Court of Canada today released its highly anticipated decision in Iona Contractors Ltd. v Guarantee Company of North America, 2015 ABCA 240 dismissing the application for leave to appeal by the Trustee in Bankruptcy (the "Trustee") of the bankrupt, Iona Contractors Inc. ("Iona").