On March 9, 2017, the Supreme Court of Canada granted leave to appeal from the Ontario Court of Appeal’s ruling that there was no jurisdiction to grant equitable subordination under Canada’s Company Creditors and Arrangement Act (“CCAA“) which is often compared to Chapter 11 proceedings in the U.S.

When a financing statement is registered to perfect a security interest in collateral, it is the responsibility of the secured party to monitor the registration to ensure that a new financing statement is filed if the goods move jurisdictions. A recent decision by the Ontario Superior Court of Justice1 emphasizes this point.

Facts

This month we review the court's view on open ended suspension of discharge from bankruptcy and the difficulty of 'substituting' a defendant in proceedings where the relevant limitation period has expired:

Suspension of discharge from bankruptcy should not be open ended

The High Court has held that only in the most serious cases of non-co-operation should a discharge from bankruptcy be suspended otherwise than on a specified period or condition basis.

In Caetano v Quality Meat Packers, 2017 ONSC 1199, Justice Belobaba of the Ontario Superior Court recently had opportunity to consider whether two representative proceedings commenced on behalf of two separate groups of employees against an insolvent employer ought to be struck because, despite the actions having been commenced within the applicable two year limitation period, the plaintiffs in those two actions had failed to obtain the necessary representation orders within the two year period.

La Cour du Banc de la Reine de l’Alberta (la « Cour ») a clarifié la façon dont seront traitées les demandes en cas d’abus dans le cadre de procédures en vertu de la Loi sur les arrangements avec les créanciers des compagnies (la « LACC »). Dans sa décision récente concernant l’affaire Lightstream Resources Ltd.

​On April 24, 2017, the Alberta Court of Appeal issued a decision in Orphan Well Association v Grant Thornton Limited, 2017 ABCA 124. The decision is arguably the past year’s most hotly anticipated and discussed decision in Alberta, despite involving bankruptcy proceedings of a relatively small junior oil and gas company. The Court of Appeal, in a 2-1 split, upheld the trial judge’s decision that a receiver can disclaim or renounce uneconomic assets that are subject to costly environmental liabilities.

The Alberta Court of Appeal has dismissed the appeal brought by the Alberta Energy Regulator and the Orphan Well Association from the decision of the Court of Queen’s Bench of Alberta in Re Redwater Energy Corporation. A majority of the panel held that the provisions of the provincial legislation governing certain actions of licensees of oil and gas assets do not apply to receivers and trustees in bankruptcy of insolvent companies, given the paramountcy of the Bankruptcy and Insolvency Act over provincial legislation where the governing provisions conflict.

In a majority two to one decision released on April 24, 2017, the Alberta Court of Appeal has upheld the lower court ruling in Re Redwater Energy Corporation.

Last year we reported (here) that Alberta’s Redwater Energy Corporation decision signaled good news for lenders and noteholders secured by Alberta O&G assets because the federal Canadian Bankruptcy and Insolvency Act (“BIA”) prevailed over conflicting provisions in the provincial regulations promulgated by the Alberta Energy Regulator (“AER”).

In a much anticipated decision, a 2-1 majority of the Alberta Court of Appeal (the ABCA) has upheld the Alberta Court of Queen’s Bench (ABQB) decision in Re Redwater Energy Corporation, 2016 ABQB 278.