The Alberta Court of King’s Bench (the Court) has delivered an important decision in the insolvency proceedings of Wolverine Energy and Infrastructure Inc. (WEI), voiding insider payments and imposing personal liability on a former executive. The ruling highlights the significant risks associated with insider transactions during financial distress and clarifies how courts apply statutory remedies under the Bankruptcy and Insolvency Act (BIA), the Fraudulent Preferences Act (FPA), and the Statute of Elizabeth (SOE).

In the recent decision of AlphaBow Energy Ltd. (Re) (“AlphaBow”),^[1] the Alberta Court of King’s Bench dismissed AlphaBow’s application to stay the Alberta Energy Regulator’s (“AER”) request for a security deposit for the duration of its restructuring proceedings.

Background

This past year has featured a diverse range of consequential, precedent-setting insolvency disputes across various industries, reflecting both the breadth of challenges facing Canadian businesses and the adaptability of Canada’s insolvency framework in resolving these issues. The most consequential decisions in which we have been involved are described below, alongside key takeaways for stakeholders participating in insolvency proceedings in 2026 and beyond.

In Yeo (liquidator), in the matter of Tuftex Carpets Pty Ltd (in liquidation) [2025] FCA 1200 the liquidators sought approval from the court to enter into a settlement agreement. The claims underlying the settlement agreement were against the former director and parent company for insolvent trading and the resulting loss.

Key Takeaways

In Re Resource Development Group Limited (Administrators Appointed) [2025] WASC 408, the Court granted relief to the voluntary administrators of Resource Development Group Ltd (RDG) from personal liability under a loan arrangement and extended time for the registration of a related security interest.  

Key Takeaway

In Re Bayview Health – Matilda Bay Pharmacy Pty Ltd; ex parte Smith & Jacobs [No 2] [2025] WASC 405, the Court held that a failure to provide the 14 days’ notice of a board meeting, required by a shareholder agreement, to appoint a voluntary administrator, was a procedural irregularity that could be cured.

Key Takeaway

According to the latest statistics from the Australian Securities and Investments Commission (ASIC), the construction industry has faced sustained and accelerating financial distress over the past four years. Since FY 2021-2022, the number of insolvency appointments has almost tripled, with nearly 4,900 cases in FY 2024-2025 alone. And, the 744 cases already recorded for FY 2025-2026 indicate the construction industry continues to suffer severe financial distress.