Introduction
A ruling on December 7, 2012, by the Supreme Court of Canada has determined that orders made under provincial environmental protection legislation can be compromised as part of insolvency proceedings. While not all regulatory claims will be compromised in this way, those that meet certain criteria of "monetary claims" can be. The decision in Newfoundland and Labrador v. AbitibiBowater Inc. has important ramifications for debtor companies and their stakeholders in respect of contaminated property and other regulatory matters.
Today the Supreme Court of Canada (“SCC”) released a decision finding that the Province of Newfoundland and Labrador is not exempt from claims proceedings under the Companies’ Creditors Arrangement Act (“CCAA”) relating to unfulfilled remediation obligations of an insolvent company. Due to general financial stress, AbitibiBowater Inc. ended industrial operations in the Province and filed for insolvency protection.
After reserving judgment for more than a year, the Supreme Court of Canada (“SCC”) has released its decision in the matter of Her Majesty the Queen in Right of the Province of Newfoundland and Labrador v. AbitibiBowater Inc., et al [1].
On December 7, 2012, the Supreme Court of Canada issued its ruling in Newfoundland and Labrador v. AbitibiBowater Inc., 2012 SCC 67 and in so doing, closed an important chapter in the successful cross-border restructuring of AbitibiBowater Inc. - now Resolute Forest Products - under the Companies' Creditors Arrangement Act (the "CCAA") and Chapter 11 of the U.S. Bankruptcy Code.
Facts of the Case
In Newfoundland and Labrador v. AbitibiBowater Inc., 2012 SCC 67, the Supreme Court of Canada was called upon to consider whether orders issued by a regulatory body with respect to environmental remediation work are “provable claims” in a proceeding commenced under the Companies’ Creditors Arrangement Act, R.S.C. 1985, c.C-36 (the “CCAA”).
introduction
October 30, 2012 - The UK Supreme Court has released a decision that significantly impacts cross-border insolvency proceedings: Rubin v. Eurofinance SA and New Cap Reinsurance Corporation v. A E Grant [2012] UKSC 46.