Secured creditors should take note of Callidus,¹ wherein the Federal Court (the “Court”) held that the bankruptcy of a tax debtor rendered a statutory deemed trust under section 222 of the Excise Tax Act (the “ETA”) ineffective as against a secured creditor who, prior to the bankruptcy, received proceeds from the tax debtor’s assets.

Background

In Aventura², a recent decision of the Ontario Superior Court of Justice (Commercial List) (the “Court”), the Honourable Justice Penny confirmed that a bankruptcy trustee does not have the authority, pursuant to section 30(1)(k) of the Bankruptcy and Insolvency Act (the “BIA”), to disclaim a lease on behalf of a bankrupt landlord. Rather, a trustee’s authority to disclaim a lease is limited to situations where the bankrupt is the tenant.

This Fall the Alberta Surface Rights Board (the “Board”) Panel issued its decision in Lemke v Petroglobe Inc, 2015 ABSRB 740. The Panel decided that it did not have authority to proceed with a claim by a landowner for unpaid compensation that had accrued before the date that the operator was assigned into bankruptcy.

Grant Forest Products Inc. v. The Toronto-Dominion Bank, 2015 ONCA 570

Factoring transactions, in which a buyer purchases outright or acquires an interest in a seller’s accounts receivable, are becoming increasingly common. Initially, the buyer must determine whether the transaction is to be recourse or non-recourse to the seller. In other words, can the buyer seek a remedy against the seller if the receivable is bad, or doesn’t pay, or does the buyer bear the entire credit risk of the deal, irrespective of whether the receivable is good? Both recourse and non-recourse transactions raise a handful of interesting considerations in bankruptcy situations.

The Senate Legal and Constitutional Affairs Legislation Committee (“the Committee”) has endorsed the passing of the Bankruptcy Amendment (Enterprise Incentives) Bill 2017 (“the Bill”) in its report dated 21 March 2018.[1]

1. Section 90K(1)(aa) of theFamily Law Act1975 (Cth) provides that a court may set aside a financial agreement if the court is satisfied that a party to the agreement entered into the agreement for purposes including the purpose of defrauding or defeating creditors, or with reckless disregard to the interests of the creditors.

The Year Brick & Mortar Got a Bankruptcy Makeover

What Fashion and Luxury Goods Companies Need to Know About Restructuring and Bankruptcy

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Introduction

Understanding the Issues, Causes, Tools for Distressed Retail Situations & What Lies Ahead for 2018

Australia is on the cusp of implementing various changes to the Bankruptcy Act 2001 (Cth) that will likely increase the number of people voluntarily entering into personal bankruptcy.

The Bankruptcy Amendments (Enterprise Incentives) Bill 2017 was introduced in the Senate on 19 October 2017. The Bill follows from reforms proposed in the National Innovation and Science Agenda (from which the ‘Safe Harbour’ Reforms also originated).[1]

On 19 October 2017, the Bankruptcy Amendment (Enterprise Incentives) Bill 2017 was introduced into Parliament by the Commonwealth Government in order to reduce the default period of bankruptcy from three years down to just one year. The stated objective of the Bill is “to foster entrepreneurial behaviour and reduce the stigma associated with bankruptcy whilst maintaining the integrity of the regulatory and enforcement frameworks for the personal insolvency regime.”