In the recently released Judgment in Bank of Montreal v. Peri Formwork Systems Inc.1, the British Columbia Court of Appeal was called upon to decide whether a Monitor, under the Companies’ Creditors Arrangement Act (“CCAA”)2, or a Receiver, under the Builders Lien Act 3, could borrow monies to complete a development project in priority to claims of builder’s liens registered against the project.
Catalyst Paper Corporation (TSX:CTL) has taken the unusual step of publicly announcing that, although it is not in bankruptcy, the company is seeking court protection under Chapter 15 of the US Bankruptcy Code.
The Richmond, BC-based company reported earlier that it had received an initial court order under the Canada Business Corporations Act (CBCA) to begin a consensual restructuring process with its noteholders. It made the new announcement to correct allegations of bankruptcy that appeared in some media reports following its initial statement.
In a decision dated January 11, 2012, a New York court applied the “separate entity rule” to dismiss a judgment creditor’s special proceeding against a garnishee bank, confirming that the rule remains alive and well in New York. Under the separate entity rule, bank branches are treated as separate legal entities for the purposes of attachment and garnishment. Where the rule applies, a judgment creditor seeking to restrain a judgment debtor’s bank account must serve the post-judgment restraining notice upon the bank branch where the account is maintained.
On Thursday, December 1, 2011, a three-judge panel of the Supreme Court of Canada granted leave to appeal from the decision of the Court of Appeal for Ontario in Re Indalex.
In the decision of Justice Morawetz of the Ontario Superior Court of Justice (Commercial List) (the “Court”) in In the Matter of Aero Inventory (UK) Limited and Aero Inventory PLC, the Court held that proceeds of a fraudulent preference action recovered by a trustee in bankruptcy under section 95 of the Bankruptcy and Insolvency Act (“BIA”) may be subject to the rights of secured creditors, to the extent secured creditors had rights in the collateral in question at the time of the impugned transaction.
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.
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.