The Supreme Court of Canada granted leave to appeal yesterday in Indalex Limited (Re). This is an appeal from the Ontario Court of Appeal (2011 ONCA 265). Please see our Financial Services and Banking E-news Bulletin dated April 25, 2011, for a detailed summary of the decision of the Ontario Court of Appeal.

The Supreme Court has announced it will hear the appeal in the high profile Indalex Ltd., Re. The appeal is of great interest to the commercial litigation, insolvency and pension bar. Its outcome will be closely watched and may have dramatic impact on Canadian corporate reorganizations.

Background

Oilsands Quest Inc. (AMEX: BQI) has been granted protection under the Companies’ Creditors Arrangement Act until December 21,2011, allowing the insolvent company to continue operating normally as it attempts to reorganize its financial affairs.

“We made the difficult decision to seek creditor protection because we believe this step to be in the best interest of all our stakeholders,” Garth Wong, Chief Executive Officer of Oilsands Quest, said in a news release.

In the midst of the ongoing restructurings of Nortel and AbitibiBowater, the New Democrats introduced Bill C-501 in the spring of 2010 to amend the Bankruptcy and Insolvency Act (the “BIA”) and the Companies’ Creditors Arrangement Act (the “CCAA”) with the goal of better protecting employees’ interests in the context of formal insolvency proceedings, including pension interests. However, Bill C-501 did not become law.

Introduction

In “True Lease v. Security Lease – Is the Distinction Still Relevant?” which appeared in the June 2008 issue of Collateral Matters, Jill Fraser discussed a 2007 amendment to the Personal Property Security Act (Ontario) (the “PPSA”) and whether or not the distinction between a true lease and a security lease was still relevant in light of that amendment.

The Renin Group of companies has been granted protection under the Companies' Creditors Arrangement Act, "to preserve the company as a viable operation and preserve 300 jobs" Ontario Superior Court Justice Mesbur noted in her endorsement of its application for “immediate relief.”

The Renin Group is the parent corporation of Renin Corp., Renin Corp. US and Kingstar Products (Western Inc.) based in Brampton, Ontario. All three companies are named in the court’s order.

On December 1, 2011, the Supreme Court of Canada granted leave to appeal the decision of the Ontario Court of Appeal in Re Indalex Limited, 2011 ONCA 265, which we summarized here.

2011 ONCA 535 (Released July 28, 2007)

Landlord and tenant – Repudiation of Lease – Companies' Creditors Arrangement Act Proceedings

In June 2011, EDS Canada Corp. ("EDS") subleased premises to NexInnovations ("Nex"). On October 2, 2007, Nex obtained creditor protection under the CCAA (the "Initial Order"). The Initial Order gave Nex the right to "vacate, abandon or quit any leased premises and/or terminate or repudiate any lease…"

A Toronto-based clothing retailer that operates more than 100 locations in shopping malls across Canada has received court protection to support its restructuring and eventual sale.

Clothing for Modern Times Ltd. (“CMT”) designs and markets men's and women's clothing and accessories through its Urban Behaviour (“UB”), Costa Blanca (“CB”) and Costa Blanca X (“CBX”) branded stores.

Cellfor, a privately held company that bills itself as the world's first and largest commercial supplier of conifer varietal seedlings to the forest industry, has obtained a court order granting it protection under the Companies' Creditors Arrangement Act.

The initial order of Mr. Justice Harris of the Supreme Court of British Columbia grants a stay of proceedings against all actions and creditors until January 16, 2012, when a further hearing is scheduled to consider a possible extension of the stay period.