A ruling on December 7, 2012, by the Supreme Court of Canada has determined that orders made under provincial environmental protection legislation can be compromised as part of insolvency proceedings. While not all regulatory claims will be compromised in this way, those that meet certain criteria of "monetary claims" can be. The decision in Newfoundland and Labrador v. AbitibiBowater Inc. has important ramifications for debtor companies and their stakeholders in respect of contaminated property and other regulatory matters.
On December 7, 2012, the Supreme Court of Canada issued its ruling in Newfoundland and Labrador v. AbitibiBowater Inc., 2012 SCC 67 and in so doing, closed an important chapter in the successful cross-border restructuring of AbitibiBowater Inc. - now Resolute Forest Products - under the Companies' Creditors Arrangement Act (the "CCAA") and Chapter 11 of the U.S. Bankruptcy Code.
Facts of the Case
In Newfoundland and Labrador v. AbitibiBowater Inc., 2012 SCC 67, the Supreme Court of Canada was called upon to consider whether orders issued by a regulatory body with respect to environmental remediation work are “provable claims” in a proceeding commenced under the Companies’ Creditors Arrangement Act, R.S.C. 1985, c.C-36 (the “CCAA”).
This bulletin is a cross-country update presented by the national Restructuring & Insolvency Group. It discusses the key cases across the country involving debtor-inpossession (DIP) financing, court-ordered charges and other priority claims and disputes in recent Canadian insolvency proceedings.
Introduction
After reserving judgment for more than a year, the Supreme Court of Canada (“SCC”) has released its decision in the matter of Her Majesty the Queen in Right of the Province of Newfoundland and Labrador v. AbitibiBowater Inc., et al [1].
- Historical Background
Unlike the United States, Canada was not created by a unilateral declaration of independence from the colonial occupation of England.
Except where otherwise noted, this paper is current as of September, 2011 and provides preliminary information on Canadian and British Columbia legal matters to assist you in establishing a business in British Columbia and provides general guidance only.
On March 9, 2012, the Ontario Superior Court decided several motions regarding five Ontario properties formerly owned by Nortel Networks Corporation, including one property in which Nortel retained a partial interest. The properties had been contaminated as a result of historical manufacturing on the properties.