The Take-Away

Missing the limitations period for bringing a court action to recover a debt does not extinguish other legal rights and remedies in respect of that debt, such as bringing an application for bankruptcy or proving a claim in a bankruptcy estate.

The Case

A recent case illustrates the importance of clarity in the contractual arrangements associated with the disposition of a debtor’s assets. In the case, the Court appointed receiver was given Court approval for an auction services agreement. Under that agreement, the auctioneer was to conduct an auction sale of the debtor’s assets and was entitled to charge and collect a buyer’s premium equal to a minimum of 12% of the sales price.

Where an insured deposit taking institution (and let’s just call it abank to make things easy) is subject to a receivership order under the Canada Deposit Insurance Corporation Act (CDIC Act) the government can incorporate a bridge bank to take over the good assets and run the bank until it can be sold. If it does so the usual exemptions from the statutory stays for termination, netting and collateral enforcement for el

Bill C-45 proposes changes to the Payment Clearing and Settlement Act to enhance certainty that clearing house default rules will be enforceable in the event of a clearing member default. These reforms are an important aspect of financial markets reforms

On September 6, 2012, the Commission des lésions professionnelles (the CLP) deliberated on the interpretation of article 316 of An Act Respecting Industrial Accidents and Occupational Diseases(the Act) which states that the Commission de la santé et de la sécurité du travail (the CSST) can require from an employer that retains the services of a contractor to pay the assessment due by said contractor.

In the recent decision of Frank v. Farlie, Turner & Co., LLC, 2011 ONSC 5519, Mr. Justice Perell of the Ontario Superior Court of Justice found, among other things, that punitive damages are not available under Part XXIII.1 of the Ontario Securities Act as such damages are inconsistent with the scheme and purpose of Ontario’s statutory secondary market disclosure liability regime.  In so doing, the court confirmed the fundamental importance of liability limits in continuous disclosure claims against directors and officers.

introduction

October 30, 2012 - The UK Supreme Court has released a decision that significantly impacts cross-border insolvency proceedings: Rubin v. Eurofinance SA and New Cap Reinsurance Corporation v. A E Grant [2012] UKSC 46.

On January 27, 2012, Justice Newbould of the Ontario Superior Court of Justice (Commercial List) (the “Court”) released his decision in Temple (Re),1 holding that the Ontario Limitations Act, 20022 (the “Act”) does not apply to a bankruptcy application and does not operate to extinguish a debt owing to a creditor.

The Ontario Limitations Act, 2002

Introduction

Does the dissolution of a corporation that is in receivership terminate the receivership? Until the recent decision of Meta Energy Inc. v. Algatec Solarwerke Brandenberg GMBH, 2012 ONSC 175, 2012 ONSC 4873, there was no previous court decision directly on point. The answer to the question is “no.”

Background