In Paul L. Schnier v. Her Majesty the Queen,[1]  the Tax Court of Canada (TCC) dismissed a motion to quash an appeal brought on the basis that the appellant did not, as an undischarged bankrupt, have the capacity, pursuant to Section 71 of the Bankruptcy and Insolvency Act, to deal with property, including the ability to bring an appeal. The Appellant believed he was required to file the appeal, but did not obtain the trustee in bankruptcy’s permission when he commenced the appeal.

On May 1, 2015, the Alberta Court of Appeal rendered its decision in 1773907 Alberta Ltd. v. Davidson, 2015 ABCA 150, and allowed an appeal permitting an action, brought in the name of an insolvent company, to proceed, notwithstanding that the company had assigned this claim to a third party. As will be discussed, the assignment of an action to a third party is often found to be caught by the doctrines of champerty and maintenance, and the decision by the Court serves to identify where such an assignment will be permitted.

The Alberta Energy Regulator’s (the “AER”) final phase of changes to the Licensee Liability Rating Program (the “LLR Program”) comes into effect on August 1, 2015. The AER’s Bulletin 2015-13 (found here) says that the implementation date was delayed from May 1 to August 1, 2015, to give licensees more time to understand the implications of, and prepare for, the Phase-3 program changes in light of current market conditions.

In May 2010, Justice Gascon of the Superior Court of Québec issued an important decision in AbitibiBowater Inc. (Arrangement relatif à)1.

TORONTO (May 15, 2015) - On May 12, 2015, the Ontario Superior Court of Justice and U.S. Bankruptcy Court delivered an unprecedented joint ruling in the multi-jurisdictional dispute over the allocation of US$7.3-billion raised from the sale of the Nortel Networks global business units and patent portfolio.

At dispute was how to divide Nortel’s estate between bondholders, pensioners, suppliers and former employees of the parent company in Canada and its U.S. and European subsidiaries.

In a recent unreported decision denying approval of a plan of arrangement under the Canada Business Corporations Act (CBCA) proposed by Connacher Oil and Gas Limited, Justice C.M. Jones of the Alberta Court of Queen's Bench considered the solvency test that corporations must meet in order to obtain a final order approving a plan of arrangement under the CBCA1.

An insolvent entity will often have one or more businesses that, once separated from the insolvent organization or cleansed of their existing liabilities, is quite attractive acquisition targets.

Around 33,000 UK-based pensioners of the Nortel group  look set to receive a greater share of the group’s $7bn worldwide assets, following a joint allocation hearing in the US and Canadian courts. This should mitigate earlier difficulties encountered in trying to use the Pensions Regulator’s anti- avoidance powers to recover monies from non-UK companies.

The decision may also have wider implications for unsecured lenders to a company which is part of a multi-jurisdictional group headquartered in the US or Canada.

WHAT WAS THE BACKGROUND TO THIS?

The biggest insolvency in national retailing history, Target stores’ Canadian subsidiary, is scheduled to take key steps on the road to resolution this month and over the summer.

Target Canada applied for protection under the Companies’ Creditors Arrangement Act (CCAA) last January 15 so that it could restructure and liquidate. It then closed all its 133 stores, eliminating the jobs of more than 14,000 employees and leaving its landlords and almost 1,800 other suppliers on the hook for close to $3 billion. 

Nortel Networks Corporation was a telecommunications firm that filed for protection under the Companies’ Creditors Arrangement Act (“CCAA”) in 2009. At the time, a large number of interrelated companies representing the global business operations of Nortel also filed for protection, including Nortel Networks Limited (“NNL”), its direct Canadian subsidiary and legal owner of the Nortel Group’s worldwide patent portfolio.