Recent regulations confirm that the GST/HST deemed trust has priority over all security interests and charges except for land or building charges. That exception has its own limitations. It is limited to the amount owing to the secured creditor at the time the tax debtor failed to remit the GST/HST. It also forces the secured creditor to look first to its other security; a kind of forced marshalling.

On December 16, 2010, the Supreme Court of Canada ( SCC) released its decision in Re Ted Leroy Trucking Ltd. In its decision, the SCC affirmed the importance of the Companies’ Creditors Arrangement Act (CCAA) as a flexible restructuring tool, and clarified the source and limits of the Court’s authority during CCAA proceedings. Furthermore, the Court overruled the judgment of the B.C.

On October 26, 2010, the British Columbia Court of Appeal (the Court) released its decision in Canadian Petcetera Limited Partnership v. 2876 R Holdings Ltd., 2010 BCCA 469 (Petcetera), an important case that addresses the rights of landlords when a tenant has filed a Notice of Intention to make a proposal (NOI) under the Bankruptcy and Insolvency Act (the BIA).

In the recent decision of Justice Cumming In the Matter of the Proposal of Hypnotic Clubs Inc. (“Hypnotic” or the “Debtor”) the court dismissed a motion by the Debtor for a sale of its assets pursuant to s.65.13 of the Bankruptcy and Insolvency Act (“BIA”).

On January 23, 2020, the Supreme Court of Canada unanimously allowed the appeal from the Québec Court of Appeal’s decision in 9354-9186 Québec Inc. et al. v. Callidus Capital Corporation, et al., opening the doors to third-party litigation funding in insolvency proceedings in Canada.

Background

In a recent decision released by Madam Justice Kent of the Alberta Court of Queens Bench (the “Court”) the Court declined to grant Octagon Properties Group Ltd. and certain affiliates (“Octagon” or the “Debtors”) relief pursuant to the Companies’ Creditors Arrangement Act, R.S.C. 1985 c.C36 (“CCAA”).

FT ENE Canada Inc. (“FECI”) was in the nanofibre business, and was a wholly owned subsidiary of Finetex ENE Inc. (“Finetex”). As a result of insolvency difficulties separate and apart from the Canadian business, Finetex was engaged in bankruptcy proceedings in Korea (its home jurisdiction). There was animosity between Finetex and the director of FECI.

The bankruptcy and insolvency reforms passed by Parliament in 2005 and 2007 will at last come into force today, September 18th, 2009. While a small initial round of reforms dealing with employee wages were implemented in July 2008, today marks a more radical shift in Canadian insolvency law as the remaining amendments come into effect. The reforms will be applicable to any bankruptcy or insolvency proceedings started on or after today’s date. Key elements of the reforms will include:

Interim Financing, Administrative and D&O Charges

On November 8, 2018, in a decision delivered unanimously from the bench, the Supreme Court of Canada confirmed that the Crown’s superpriority over unremitted Goods and Services Tax/Harmonized Sales Tax (GST/HST) is ineffective against a secured creditor who received, prior to a tax debtor’s bankruptcy, proceeds from that taxpayer’s assets.1

In theMatter of Forest and Marine Financial Corporation (2009) BCCA 319, the British Columbia Court of Appeal was called upon to consider whether a limited partnership qualifies for protection under the Companies Creditors’ Arrangement Act (“CCAA”). The Court also considered whether, in the circumstances of the case, a stay of proceedings should have been issued with respect to the limited partnership.