Canada’s insolvency and restructuring regime consists primarily of two separate statutes that have been substantially amended in recent years to align their restructuring provisions. Despite some similarities with its U.S. counterpart, the amended Canadian regime remains distinct.

In Re: IC Creative Homes Inc. (2005) Carswell BC 3157 (Master) the Bankruptcy Court had previously granted an order under section 38 of the BIA allowing a creditor of the bankrupt to commence proceedings against the bankrupt’s accounting and business advisor for alleged misconduct and negligence relating to the operations of the bankrupt prior to its bankruptcy.

In the recent decision of Re Rieger Printing Ink Co., Justice Pepall of the Ontario Superior Court of Justice (Commercial List) considered the right to protection against selfincrimination in a Section 163 examination conducted under the Bankruptcy and Insolvency Act (the "BIA").

The Supreme Court of Canada recently released its decision in Saulnier v. Royal Bank of Canada1 ("Saulnier"), an important case involving fishing licences in the context of a secured lending transaction and an assignment in bankruptcy. This case contains what we believe is significant commentary on classifying certain governmental licences as "property" under the Bankruptcy and Insolvency Act (Canada) (the "BIA") and "personal property" under the Personal Property Security Act (Nova Scotia) (the "Nova Scotia PPSA").

In Re EarthFirst Canada Inc., Justice Romaine had to consider establishing a “hardship fund” that would be used to allow EarthFirst Canada Inc. (“EarthFirst”) to pay pre-filing obligations owing to certain suppliers and contractors operating in a remote community where EarthFirst is developing a wind farm project.

Section 81.1 of the Bankruptcy and Insolvency Act (“BIA”) grants a temporary super priority to suppliers who provided goods to a bankrupt purchaser or where a receiver has been appointed in relation to the purchaser. The section requires the supplier to provide a written demand to the purchaser and allows the supplier to repossess the goods within thirty days of the date of the delivery of goods.

The recent economic turmoil has brought to the forefront concerns by licensees as to what happens to their rights to licensed intellectual property upon the bankruptcy of a licensor. Unfortunately, under Canadian law, the answer to that question is not clear.

Background

Section 147 of the Bankruptcy and Insolvency Act (“BIA”) provides that the Superintendent’s Levy is applied to defray the supervisory expenses of the Superintendent, will be charged on dividend payments made by the trustee.

The recent decision of the Supreme Court of Canada in Saulnier (Receiver of) v. Saulnier has changed the basis for determining whether a licence is property under a provincial Personal Property Security Act (“PPSA”) and the federal Bankruptcy and Insolvency Act (“BIA”).

Currently, neither the Bankruptcy and Insolvency Act nor the Companies’ Creditors Arrangement Act defines “director.” However, pending legislative amendments to the Bankruptcy and Insolvency Act (BIA) and Companies’ Creditors Arrangement Act (CCAA) will include an expansive definition of “director” that includes any person “occupying the position of director,” regardless of his or her formal title.