In Re Farmpure Seeds Inc. (2008 CarswellSask. 639) the Saskatchewan Court of Queen’s Bench considered the proposal of a debtor which was conditional upon the Court approving DIP financing and a super priority charge.

The debtor company had an active business, however became insolvent as a result of rapid expansion and some improvident contracts. The debtor could not meet its immediate obligations such as payroll, and the need to pay its suppliers upon receipt of their seed product. As a result, the debtor could not maintain its business without immediate interim financing.

Law No.  176-V "On Rehabilitation and Bankruptcy" came into effect on 25 March 2014.

The Law "On Rehabilitation and Bankruptcy" (Law) has replaced the Law “On Bankruptcy” dated 21 January 1997. The law applies to legal entities and individual entrepreneurs. As with its predecessor, the Law does not apply to state owned entities, pension funds, banks, and insurance companies (for which special provision is made in the relevant legislation). 

As compared with the previous law, the Law focuses more on rehabilitation procedure.

Introduction

The decision of the Supreme Court of Canada last month in Century Services Inc. v. Canada1 is of striking interest to the tax and insolvency bars. The Court considered Crown priorities, in particular, the various “deemed trust” provisions found in section 227 of the Income Tax Act (Canada),2 section 86 of the Employment Insurance Act,3 section 23 of the Canada Pension Plan (the “CPP”)4 and in particular section 222 of the Excise Tax Act (GST Portions).5

Magna Enterprises Corp. (“MEC”), a foreign bankrupt corporation, brought an application for ancillary relief pursuant to s. 18.6 of the CCAA. Section 18.6 gives the court the power to “make such orders and grant such relief as it considers appropriate to facilitate, approve or implement arrangements that will result in a co-ordination of proceedings under this Act with any foreign proceeding”.

Late the night of Nov. 25, LandAmerica Financial Group, Inc. and its subsidiary, LandAmerica 1031 Exchange Services, Inc., filed a Chapter 11 petition in the U.S. Bankruptcy Court for the Eastern District of Virginia ("Bankruptcy Court"), seeking bankruptcy protection for both entities. The action does not cover Commonwealth Land Title Insurance Company or Lawyers Title Insurance Company, two LandAmerica subsidiaries that are each domiciled in the State of Nebraska.

Ruling description

In its judgment of January 15, 2014, the Provincial Administrative Court (WSA) in Warsaw (case no. III SA/Wa 1928/13) ruled that a bankruptcy receiver was not required to correct input tax under the procedure set forth in Art. 89b (1) of the VAT Act (in the version which took effect on January 1, 2013) if the creditor cannot correct output tax under the “bad debt relief” procedure due to the debtor being bankrupt.

In the recent decision of Century Services Inc. v. Canada (Attorney General), 2010 SCC 60, the Supreme Court of Canada has, for the first time, interpreted key provisions of the Companies’ Creditors Arrangement Act (“CCAA”).

The judgment of the Court, which was pronounced December 16, 2010, overrules appellate authority from Ontario and British Columbia that previously conferred a priority for unremitted GST on the Crown in CCAA proceedings, and endorses the broad discretionary power of a CCAA court.

The Wage Earner Protection Program Act, S.C. 2005, c. 47 (the “WEPPA”), came into force on July 7, 2008. This paper will set out the implications of the WEPPA on insolvency practice and provide a brief analysis of Ted LeRoy Trucking Ltd. and 383838 B.C. Ltd. (Re), 2009 BCSC 41 (“LeRoy Trucking”), the only reported decision regarding the WEPPA (as at the date of this paper) since the legislation came into force.

I. Introduction to the WEPPA

The US Court has approved a bankruptcy settlement under which a US-listed parent company is liable for the buy-out deficits in its UK subsidiary's pension schemes. Key to the court's considerations was the issue of Financial Support Directions (FSDs) by the UK Pensions Regulator against the US parent company.

The court decided that:

The Government has fed back on the responses to DBIS’s consultation on the effect of bankruptcy on the ability to access a basic bank account. Responses to the consultation have shown that only 27% of people subject to a bankruptcy order are able to retain their bank account. A bank's decision not to offer a bank account to a bankrupt is mainly based on the bankrupt's credit record, rather than on the risk of the trustee making a claim against the bank, a risk that the consultation process has shown is more perceived than real.