Yesterday, the Office of the Commissioner of Financial Institutions of the Commonwealth of Puerto Rico closed R-G Premier Bank of Puerto Rico, headquartered in Hato Rey, Puerto Rico, and the FDIC was appointed receiver.
This article has been contributed to the blog by Caitlin Fell and Justine Erickson. Caitlin Fell is an associate in the insolvency and restructuring group of Osler, Hoskin & Harcourt LLP and Justine Erickson is a summer student at Osler, Hoskin & Harcourt LLP.
In a decision issued on April 20th, 2012, Justice Robert Mongeon of the Superior Court of Quebec gave a decisive answer to one of the most troubling questions facing debtors and DIP lenders in reorganizations under the Companies' Creditors Arrangement Act(CCAA).
A recent decision of the Ontario Court of Appeal illustrates that secured creditors should address their priority position relative to all other creditors of their borrower in order to achieve a complete subordination of competing security. Failure to do so in this case resulted in circular priorities that the Court was left to resolve. In light of the Court of Appeal’s decision, secured creditors should ensure they are a party to all subordination agreements with the debtor in order to achieve their expected result.
The Facts and Agreements
This article has been contributed to the blog by Caitlin Fell and Justine Erickson. Caitlin Fell is an associate in the insolvency and restructuring group of Osler, Hoskin & Harcourt LLP and Justine Erickson is a summer student at Osler, Hoskin & Harcourt LLP.