Registering a financing statement under the Ontario PPSA[1] to perfect a security interest is a key means of protecting a secured creditor’s priority over collateral. It is important for secured creditors to be cognizant however that there are situations where other claims that are not subject to traditional registration requirements may still trump a secured creditor’s registered security interest.

This month we review the court's view on open ended suspension of discharge from bankruptcy and the difficulty of 'substituting' a defendant in proceedings where the relevant limitation period has expired:

Suspension of discharge from bankruptcy should not be open ended

The High Court has held that only in the most serious cases of non-co-operation should a discharge from bankruptcy be suspended otherwise than on a specified period or condition basis.

What do a car crash in Alberta, a delinquent farm mortgage in Saskatchewan and an unpaid highway toll ticket in Ontario have in common?

They all ended up in the Supreme Court of Canada.

What does the U.S. doctrine of equitable subordination have to do with Canada? Superficially, the answer may be: not much. But for many financing and insolvency professionals here in Canada, there remains a palpable sense that the U.S. doctrine will eventually, if not inevitably, find its way fully across the U.S. border into Canada. So, perhaps the more appropriate response really ought to be: not much, at least not yet! It is because of this anticipation that it is worthwhile, from time to time, to summarize the central aspects of the U.S.

In Rhinegold Publishing Ltd v Apex Business Development Ltd, Rhinegold and another company owed debts to the defendant in the sums of approximately £22,000 and £31,000 respectively. The defendant presented a winding-up petition against both companies which resulted in settlement being reached. The settlement provided that the companies would pay off the debts owed in full by monthly payments and that no proceedings would be issued in relation to the debts referred to in the original statutory demand if payment was made.

In June 2007 we reported on the decision in Prudential Assurance Company Ltd v PRG Powerhouse Limited. Although the case has given rise to a great deal of debate, until now there has been no subsequent reported case in which the court has had to consider whether and how a company voluntary arrangement (CVA) might fairly effect a compromise of a landlord's claim against a guarantor of its tenant.

To avoid an asset reverting to a bankrupt after the end of his period of bankruptcy, the asset must be realised. An assignment of a beneficial interest for a future price does not amount to a realisation.

The court will not always set aside a property transfer order in matrimonial proceedings where the party transferring the property, as part of a clean break order, becomes bankrupt shortly afterwards, and there are allegations of lack of consideration or transfer at an undervalue.

The claimant appealed against a decision that her former husband’s one third interest in the matrimonial home vested in his trustee in bankruptcy (the first defendant) free from any rights asserted by her, so permitting an order for possession and sale of the property. The claimant argued that pursuant to a matrimonial consent order made prior to the bankruptcy, she had a right of exclusive occupation of the property until remarriage, cohabitation or death.

In 2017, the Quebec Court of Appeal had issued a decision in the matter of Arrangement relatif à Métaux Kitco inc., 2017 QCCA 268 ("Kitco") to the effect that the Companies' Creditors Arrangement Act (the "CCAA") prohibited the exercise of all rights of set-off between pre-filing and post-filing claims.