Recent changes to the Bankruptcy and Insolvency Act have given certain unpaid pension plan contributions priority over a lender’s security if the employer is bankrupt or in receivership. How can a lender monitor the debtor’s pension arrears to assess the extent of the lender’s loss of priority?

The Bankruptcy and Insolvency Act now provides that certain unpaid pension plan claims rank ahead of a lender’s security in bankruptcy or receivership proceedings. Effective July 7, 2008, sections 81.5 and 81.6 give super-priority status to:

On Feb. 11, 2009, the United States Court of Appeals for the Fourth Circuit issued its opinion in Hutson v. E.I. Dupont de Nemours and Co. (In re National Gas Distributors), attempting, in a matter of first impression, to define "commodity forward agreement" for purposes of eligibility for protection under the safe harbor provisions of the Bankruptcy Code. At first blush, this decision appears to provide the additional certainty that participants in the commodities markets require.

The Humber Valley Resort Corporation and related companies (collectively, “Humber Valley”) applied for, and was granted, an Initial Order from the Newfoundland and Labrador Supreme Court (Trial Division) staying proceedings against it for one month under the CCAA. On this same date, the Court authorized a DIP lending facility of up to $600,000.00, with a first priority charge over various of Humber Valley’s assets. At the end of the initial stay period, Humber Valley brought two further applications.

In Mendlowitz & Associates Inc. v. Chiang, an Order was granted in 2006 compelling the bankrupt and others to attend for an examination by the trustee under section 163(1) of the Bankruptcy and Insolvency Act (Canada). In 2008, the trustee applied under the same section to examine the bankrupt and others again.

Section 163(1) of the BIA provides:

In this article, Dentons gives its inside view on the pre-pack evaluator's report, made compulsory earlier this year to improve the confidence of creditors in pre-pack administration sales to connected persons. We consider the practicalities of selecting the right evaluator for the job, the potential for "opinion shopping" from evaluators and whether these new regulations have achieved what was intended.

A recap on pre-packs

Judgment has now been handed down by Marcus Smith J in another important case regarding the Lehman estate. This gives much needed clarity on how subordinated debts rank as between themselves.

The judgment concerned:

The Court of Appeal has considered whether interim dividends paid to a shareholder at a time when the company did not have sufficient distributable reserves, making the payments unlawful, could later be reclassified as salary payments.

Facts

The Pre-Action Protocol for Debt Claims comes into force on 1 October 2017. This note deals with the key elements to be aware of.

Applicability

While the Protocol is named the Pre-Action Protocol for Debt Claims the first thing to note is that it only applies to businesses claiming payment of debts from an individual (including individual sole traders) and does not apply to business-to-business debts.

Introduction

Although the sum involved was small, the High Court’s decision inOne Investment and Consultancy Limited and another v Cham Poh Meng (DBS Bank Ltd, garnishee) [2016] SGHC 208 is one which would have a great impact in the area of enforcement of a judgment debt – A joint account held in the names of a judgment debtor and third parties jointly cannot be subject to attachment under a garnishee order.

On 14 June 2016 the Verkhovna Rada of Ukraine adopted the Law “On Financial Restructuring” (the Law), which aims to solve many conflicts and assist in debt restructurings in Ukraine.

The Law provides a new procedure for restructuring financial debt of Ukrainian corporate debtors (the Restructuring).

Special features of new Restructuring procedure include: