On April 7, 2011, in the context of a liquidating CCAA that achieved a going concern sale of the debtor’s business, the Ontario Court of Appeal held that:

On December 16, 2010, the Supreme Court of Canada ( SCC) released its decision in Re Ted Leroy Trucking Ltd. In its decision, the SCC affirmed the importance of the Companies’ Creditors Arrangement Act (CCAA) as a flexible restructuring tool, and clarified the source and limits of the Court’s authority during CCAA proceedings. Furthermore, the Court overruled the judgment of the B.C.

We know this publication is about dispute resolution, but what we really want to talk about in this article is avoiding insolvency and bankruptcy disputes.

“If Only You Had Come to Us Sooner”

In a recent decision released by Madam Justice Kent of the Alberta Court of Queens Bench (the “Court”) the Court declined to grant Octagon Properties Group Ltd. and certain affiliates (“Octagon” or the “Debtors”) relief pursuant to the Companies’ Creditors Arrangement Act, R.S.C. 1985 c.C36 (“CCAA”).

FDIC Proposes Rules for the Recoupment of Compensation from Executives of Failed Financial Institutions I hope this does not apply to any of you, but on Tuesday, the Board of Directors of the Federal Deposit Insurance Corporation (FDIC) approved a Notice of Proposed Rulemaking (NPR) to clarify application of the orderly liquidation authority contained in Title II of the Dodd-Frank Wall Street Reform and Consumer Protection Act, "Orderly Liquidation Authority" (OLA).

On February 22nd, the Bankruptcy Court overseeing the liquidation of Lehman Brothers' broker-dealer business denied motions seeking to modify the order approving the sale of the business to Barclays Capital. The Court noted the extraordinary circumstances surrounding the sale, the affirmance of that sale order, and movants' failure to challenge the order for one year. The court held that even if the evidence presented here were known in 2008, the result would have been the same, i.e., the sale would have been approved.

On February 8th, the CFTC published for comment proposed regulations that would set forth parameters for the inclusion of an orderly liquidation termination provision in the swap trading relationship documentation for swap dealers and major swap participants. Comments should be submitted on or before April 11, 2011. 76 FR 6708.  

On October 12th, the FDIC published for comment proposed rules on how the agency would treat certain creditor claims under the new orderly liquidation authority established under the Dodd-Frank Act. The proposed rules bar any additional payments to holders of long-term senior debt, subordinated debt or equity interests that would result in those creditors recovering more than other creditors entitled to the same priority of payments under the law.

On May 5th, the Senate voted 93-5 to adopt an amendment proposed by Senators Christopher Dodd and Richard Shelby that would give the FDIC authority to liquidate failing financial institutions without the creation of a controversial $50 billion "bailout" fund. Instead, the FDIC would use a new line of credit with the Treasury Department, supported by the assets of the failed institution, to pay the liquidation expenses.

On March 18th, the Fifth Circuit held that a U.S. bankruptcy court may offer avoidance relief under a foreign country's law in a Chapter 15 bankruptcy proceeding. Plaintiffs had been appointed trustees by a Nevis court in a Nevis winding up petition. Plaintiffs filed a Chapter 15 bankruptcy petition in the U.S. alleging that the debtor had transferred assets to put them out of the reach of the Nevis court. The U.S.