In a succinct decision rendered on January 12, the same day as the hearing, the Supreme Court of Canada finally settled the question of whether requirements to pay, issued pursuant to section 317 of the Excise Tax Act ("ETA") prior to the bankruptcy of a tax debtor, but not paid before such time, remain valid against the garnishee.1 Supreme Court Justice LeBel, speaking on behalf of the Court, simply stated that the Court agreed with the reasons of Noël J.A. of the Federal Court of Appeal.

A U.S. bankruptcy judge in Delaware has held that the two-year "look-back" period in which a transfer occurring within two years of the bankruptcy petition filing date may be avoided, under Section 548 of the U.S. Bankruptcy Code, cannot be equitably tolled. After some inconsistent orders about whether the courts may broaden the look-back period, this decision should give greater certainty to lenders when evaluating their exposure upon the commencement of a bankruptcy case by a borrower.

The definition of “eligible wages” under theWage Earner Protection Program Act¹ (“WEPPA”) was amended on December 15, 2011. Under the original definition, employees could claim under the wage earner protection program (“WEPP”) for payment of wages earned during either (i) the six-month period ending on the date of bankruptcy of the former employer, or (ii) the six-month period ending on the first day on which there was a receiver in relation to the former employer. The definition did not deal with CCAA or BIA restructurings.

A liquidator has been appointed to supervise the winding up and sale of the assets of Union of Canada Life, one of Canada's oldest life insurance companies, by order of the Ontario Superior Court of Justice.

Union of Canada applied under the Winding Up and Restructuring Act (WURA) for a Winding Up Order and the appointment of Grant Thornton as liquidator to take possession and control of the company and conduct the sale under the protection of a stay of proceedings.

In Re Indalex Limited, the OCA surprised insolvency, pension and financial services professionals by ruling that pension plan deficiency claims can have priority over the claims of DIP lenders in the context of Companies’ Creditors Arrangement Act proceedings.

Timminco Limited (TSX:TIM) has been granted creditor protection under theCompanies' Creditors Arrangement Act until February 2, 2012 by the Ontario Superior Court of Justice. Timminco produces silicon metal for the chemical, aluminum and electronics/solar industries through its 51%-owned production partnership with Dow Corning, known as Québec Silicon. Timminco is also a producer of solar grade silicon for the solar photovoltaic energy industry, through Timminco Solar, a division of its wholly owned subsidiary, Bécancour Silicon.

On December 1 2011 the Supreme Court of Canada granted leave to appeal the Ontario Court of Appeal's decision in Indalex Limited (Re) (2011 ONCA 265).(1)

Indalex Limited and its US parent sought protection from their creditors under the Companies' Creditors Arrangements Act and under Chapter 11 of the US Bankruptcy Code. The court authorised a loan under a debtor-in-possession credit agreement and gave the lenders a super-priority charge against Indalex's assets.

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.