Ernst & Young Inc. was appointed by the Court of Queen’s Bench of Alberta as the Receiver and Manager of an Alberta Corporation named Klytie’s Development Inc., its Colorado subsidiary, and the two primary shareholders of the debtor companies

The Ontario Court of Appeal recently held that Royal Bank of Canada ("RBC") was unperfected as against a trustee in bankruptcy (the "Trustee"), because RBC failed to comply with section 48(3) of the Personal Property Security Act (Ontario) (the "PPSA") by failing to file a financing change statement to reflect a change of the debtor’s name after assets of the debtor were sold by a court appointed interim receiver.

Imagine that a critical part of your business is dependent on a software program that you license from a software supplier. This scenario is not that hard to imagine, because in fact most businesses and other organizations are indeed reliant on licensed software – it is simply a fact of life in the computer age.

In Royal Bank v. 2021847 Ontario Ltd. et al. (2007), Carswell Ont. 8283, the plaintiff Royal Bank sought summary judgment against the guarantors of a credit facility it granted to 2021847 Ontario Ltd. (“2021847”). The amount the plaintiff sought against the guarantors was the deficiency remaining after the plaintiff had appointed a receiver over the assets of the debtor company. The proceeds from the realization of the receivership were insufficient to payout 2021847’s credit facility.

Second and third time personal bankruptcies are uncommon, but fourth time bankruptcies are so rare they deserve recognition. The Supreme Court of British Columbia was recently presented with one such instance when Mr. Douglas Kusch applied for a discharge from his fourth bankruptcy.

In the Spring of 2007, Canada’s Parliament amended several federal insolvency statutes so as to transfer the definition of the class of protected contracts known as “eligible financial contracts” (EFCs) from the federal insolvency statutes themselves to their respective associated regulations. On November 15, the Treasury Board approved the finalized regulations to the Bankruptcy and Insolvency Act, the Winding-up and Restructuring Act, the Companies’ Creditors Arrangement Act, and the Canada Deposit Insurance Corporation Act.

The Debtor’s Freeze: Protecting Your Client’s Assets

I. INTRODUCTION

A. Protecting Assets

On December 14, 2007, Bill C-12 was given Royal Assent. The Bill involves a comprehensive reform of Canada’s insolvency system. A key component of these reforms was the creation of the Wage Earner Protection Program (WEPP). The WEPP provides statutory wage protection for workers when a) their employer becomes bankrupt or subject to a receivership, and b) their employment is terminated as a result.

In Father & Son Investments Inc. v. Maverick Brewing Corp. (2007), 2007 CarswellAlta 1452 (Alta. Q.B.), Maverick Brewing Corporation (“Maverick”) operated a brewery in Edmonton in space leased from Five Oaks Inc. (“Five Oaks”). The two major creditors of Maverick were Father & Son Investments Inc. (“Father & Son”) and Five Oaks. Pursuant to a postponement and subordination of security interest document, Five Oaks had priority over Father & Son to the assets of Maverick.

A statutory demand is a formal demand for payment of a debt made by a creditor to a debtor. It may be used as the basis for an application for a petition to wind up a Cayman company.

Service and content of Statutory Demand

The Companies Winding up Rules 2008 (as amended) provide guidance as to the form and content of a statutory demand as well as the mode of service within the Cayman Islands.

A statutory demand should be in the format of CWR Form 1 and must be signed by: