On April 6, 2011, the Ontario Superior Court of Justice released its decision in the priority disputes between the lessors and aviation authorities resulting from the Skyservice receivership. The Court, in interpreting and applying the decisions in Canada 3000 and Zoom Airlines, may have raised the bar for lessors to defeat the seizure and detention rights of the aviation authorities in Canada.
The Ontario Court of Appeal in Meridian Credit Union Limited v Baig1 made it clear that misinforming a receiver during the purchase of a property, even by omission, will not be tolerated. Purchasers in the context of a receivership have an obligation to ensure that the receiver is aware of all of the facts. The court also took the opportunity to remind corporate directors that they will be held personally responsible for their tortious conduct, even if that conduct was directed in a bona fide manner to the best interests of the company.
On April 7, 2011, the Ontario Court of Appeal released its judgment in theRe Indalex Limited case (Indalex).1 The decision addresses the interplay between the deemed trust provision in the Ontario Pension and Benefits Act (PBA)2 and the federal Companies’ Creditors Arrangement Act (CCAA),3 as well as the fiduciary duties of pension plan administrators in CCAA proceedings. Indalex is important for pension plan sponsors and administrators for a number of reasons:
In Walchuk v. Houghton, the Ontario Court of Appeal held that the stay of all proceedings against a bankrupt pursuant to the Bankruptcy and Insolvency Act applies to a contempt motion brought by a judgment creditor where the contempt arises after the bankruptcy.
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:
The recent decision inErnst & Young Inc. v. Aquino, the Ontario Court of Appeal (OCA) analyzed the criteria for establishing voidable transfers at undervalue under section 96 of theBankruptcy and Insolvency Act RSC 1985, c B-3 (BIA), with a particular focus on the application of “corporate attribution” in the context of insolvency.
In a decision released April 27, 2016 in LBP Holdings Ltd. v. Allied Nevada Gold Corp., Justice Belobaba dismissed a motion by a representative plaintiff to add certain underwriters as defendants to a securities class proceeding. The defendant gold mining company, Allied Nevada, effected a secondary public offering financed as a "bought deal" by two underwriters.
On May 8, 2009, the Honourable Madam Justice Hoy of the Ontario Superior Court of Justice (Commercial List) granted an Initial Order under the Companies’ Creditors Arrangement Act, R.S.C. 1985, c. C36, as amended (the “CCAA”) in respect of Gandi Innovations Limited (“Gandi Canada”), Gandi Innovations Holdings LLC (“Gandi Holdings”) and Gandi Innovations LLC (“Gandi Texas”) (collectively, the “Gandi Group”).
In the face of increased tenant bankruptcies caused by the COVID-19 pandemic, a key question arises for commercial landlords: what protection do I have from the security provided by my tenant? Tenant-supplied security under a lease can take many forms, including a third party guarantee or indemnity, prepaid rent, a cash deposit, and a letter of credit (an LOC). Crucially, certain forms of security will be more beneficial to a landlord in the face of a tenant bankruptcy, especially where the lease has been disclaimed by the tenant’s trustee in bankruptcy.
Financial institutions need to be mindful of the effect of the engagement of financial advisors with respect to their special loan clients.