The Bottom Line

KERPs (Key Employee Retention Plans) and KEIPs (Key Employee Incentive Plans), otherwise referred to as “pay to stay” compensation plans, are commonly offered by employers to incent key employees to remain with the company during an insolvency restructuring proceeding when so-called “key employees” may be tempted to find more stable employment elsewhere.

The Alberta Court of Queen's Bench has issued several conflicting decisions on whether a stay of proceedings in an insolvency matter should be temporarily lifted to allow enforcement of a contractual right to immediately replace an operator of oil and gas assets in the event of the operator's insolvency.

With the growing concern over the environmental impacts of commercial activity, provinces have enacted and expanded environmental legislation in order to hold companies accountable for the costs of remediating the environmental harm they cause. However, regulators have struggled with how to hold companies accountable for environmental harm when they become insolvent. For many years, clean-up obligations have been treated as unsecured claims lacking priority over secured claims.

In a decision handed down on January 31, 2019, the Supreme Court ordered that a bankrupt oil and gas company fulfil its obligation to reclaim abandoned oil wells before paying any creditors. This decision has since sparked conflicting reactions across the country: first, because it gives clear precedence to environmental protection in the event of bankruptcy, and second, because of the influence it will likely have over business decisions in industries where environmental risks are involved.

Dans un arrêt du 31 janvier 2019, la Cour suprême ordonne qu’une société pétrolière faillie s'acquitte d’abord de ses obligations de remise en état des puits de pétrole abandonnés, avant de procéder à tout paiement en faveur de ses créanciers. Une décision qui suscite des réactions opposées d’un bout à l’autre du pays, puisque, d’une part, elle donne clairement préséance à la protection de l’environnement en cas de faillite, mais que, d’autre part, elle risque d’influencer les décisions d’affaires dans des industries où des risques environnementaux sont en jeu.

In McGoey (Re), 2019 ONSC 80, Justice Penny of the Ontario Superior Court of Justice found trusts over two properties held by a bankrupt were void as shams. In his decision, Justice Penny noted that had he not found the trusts to be sham trusts, he would still have set them aside as fraudulent conveyances, making us ask: “what is the difference between a sham trust and a fraudulent conveyance?”

1. Introduction

With the growing concern over the environmental impacts of commercial activity, provinces have enacted and expanded environmental legislation in order to hold companies accountable for the costs of remediating the environmental harm they cause. However, regulators have struggled with how to hold companies accountable for environmental harm when they become insolvent. For many years, clean-up obligations have been treated as unsecured claims lacking priority over secured claims. On January 31, 2019, the Supreme Court o

In the recent landmark decision of The Guarantee Company of North America v.