Good afternoon.
Following are our summaries of the civil decisions of the Court of Appeal for Ontario for the week of March 14, 2022.
Topics covered this week included property of a bankrupt (beneficial interest in trust property), testamentary capacity and extensions of time to perfect appeals.
Wishing everyone an enjoyable weekend.
Table of Contents
Civil Decisions
The concept of a single purpose entity is often present in the purchase and financing of commercial real estate. A lender may require its borrower to be a single purpose entity in order to lessen the lender’s bankruptcy risk in the event that the borrower or any of its parent entities file for bankruptcy, and also to ensure that no other businesses of the borrower adversely affect the property that is the subject of the loan.
Historically, the French restructuring system has always been perceived as a debtor-friendly system. In recent years, however, changes to the French legislation have favoured creditors' interests and the courts have favoured a number of lender-led restructures, enabling lenders to take control of the debtor from its existing shareholders.
As a result of recent high profile Chapter 11 cases, such as Purdue Pharma and Johnson & Johnson, there has been great Congressional and media attention to controversial Chapter 11 practices. These include debtors’ forum and judge shopping, nonconsensual third-party releases of nondebtors in the Plan of Reorganization, and the use of divisional mergers to isolate liabilities into special purpose entities.
In 2021, to address these concerns, two bills were introduced in the U.S. Senate and House of Representatives:
El Ministerio de Economía con el objetivo de reactivar la economía del país ha presentado varias iniciativas de ley[1] para aprobación del Congreso de la República de Guatemala, entre las cuales se encontró la Iniciativa 5446 proponiendo una ley especial en materia de insolvencia para apoyar tanto a personas individuales como a sociedades afectadas por la falta de liquidez para el pago de sus deudas, lo cual no debe ser equiparado con la mora de un d
The case of Re Premier FX Limited (in Liquidation) highlights the potentially dire consequences for a creditor who does not file their proof of debt by a set deadline - and makes clear that mistakenly forgetting to do so is not a sufficient excuse.
Premier FX was in business as a foreign exchange dealer and money transfer agent. Financial advice was sought when it became clear to the (newly appointed) directors that the claims received from customers exceed the balance of the funds held by the company.
The Bankruptcy Protector
The Ministry of Economy has presented a series of bills to the Congress of the Republic of Guatemala with the purpose of reactivating the national economy. [1] Among these was Bill number 5446, which proposed a special law on insolvency matters to provide support to natural and legal persons that cannot make payment of their debts due to specific circumstances.
How should liquidators deal with the administrative burden of adjudicating thousands of low-value proof of debts in a liquidation estate, without exhausting the limited assets available in the liquidation estate? The Grand Court recently sanctioned a pragmatic solution.
Introduction
The High Court today gave the first decision, globally, of a Court of ultimate appeal on the question of the construction of Article XI(2) of the Cape Town Convention's protocol on Matters Specific to Aircraft Equipment (Aircraft Protocol), which is of seminal importance for financiers and lessors of aircraft property, insolvency administrators globally.