MLT Aikins LLP
Serving as an ambassador of the Canadian insolvency system on the international stage was probably not on Bill Skelly’s mind when he was a student at the University of Manitoba (the Harvard of the Prairies), but he’s covered a lot of kilometers since then, both figuratively and literally. Holding the distinction of being the first Canadian to serve as Chairman of the Turnaround Management Association, Bill shares with us how the global insolvency scene has evolved over the years and how Canada’s insolvency system is viewed by practitioners abroad.
I joined TMA as a member of the Pacific Northwest Chapter. At that time, we had members in Vancouver and Seattle. We expanded to Portland, Calgary and Edmonton. There were many volunteers required to coordinate local meetings, arrange speakers, and we held a cross border conference which goes on to this day. I was encouraged to participate in TMA by some very good people who turned into great friends. I served as the Chapter President and I joined the International Board. Together with a number of other board members, we struck a strategic plan to expand out of North America. “Global Insolvencies” were on the rise and many parts of the world were thirsty for knowledge of the restructuring methods used in the US and Canada. We capitalized on that by arranging meetings in many parts of Europe, Australia, South Africa, Japan and Mexico with the top restructuring and turnaround professionals in each jurisdiction. I was very fortunate to have been able to attend many of those inaugural meetings. TMA now has chapters in 23 countries in the world. Around the same time as the expansion of TMA in the mid-nineties, the United Nations had struck an insolvency committee of the United Nations Commission on International Trade Law (UNCITRAL) which is a legal body with universal membership specializing in commercial law reform worldwide. This insolvency committee (which had several prominent Canadian members) drafted a Model Law on Cross Border Insolvency (1997) (the “Model Law”) which was intended to provide a legal framework to more effectively address cross-border insolvency proceedings. Many of the countries where TMA has chapters are now signatories to the Model Law, including Canada, the US, the UK, Japan, Australia and 20 other countries. It has had a dramatic impact on how to deal with cross border insolvencies.
2) In your opinion, what country has had the biggest impact on the global insolvency scene?
The most profound impact on the global insolvency scene has come from the US. Chapter 11 was a novel way to allow a company to attempt to restructure itself. It was initially viewed by many as a form of heresy. How could the creditors of a company incapable of paying its debts be prevented from taking steps to realize on their outstanding claims when it was the company who put themselves into this position in the first place? What became quite relevant was that many of the Chapter 11 proceedings saved precious jobs, protected suppliers and other stakeholders, and often led to greater realizations for creditors. Word spread fairly quickly and, in many different jurisdictions, debtor-in-possession restructurings are now contained in many insolvency statutes.
Even here in Canada I believe we have probably “borrowed” many of the US concepts, though we still have some subtle differences between the statutes in our two countries. The CCAA was passed in the early 1930’s and was meant to deal with restructuring of large companies like railways and trust companies. It was a very scant piece of legislation. It lay dormant for almost 50 years until it was dusted off and used in a case coming out of BC. It was used to obtain the basic protections of debtor in possession restructuring. Since then, the BIA and CCAA have evolved in parallel with the various changes to the US Bankruptcy Code and in particular Chapter 11.
3) How do professionals from other countries view us and the way we do restructurings here in Canada?
I did say that Canadian insolvency proceedings are quite similar to those in the US, but there are some nuances that always catch the attention of our friends in the US and other parts of the world. First is how unstructured our CCAA proceedings started out and how our judge-made law has provided significant flexibility to companies undergoing financial distress. This is the hallmark of our Canadian restructuring regime – once described by Mr. Justice Farley as “real-time litigation”. The other unique feature is our Monitor. Many of our US counterparts have marveled at the useful role played by the Monitor in our proceedings.
4) Are there any cross-border cases that you can think or that you were a part of that demonstrate how professionals from various countries have successfully worked together towards a positive outcome?
One of my first cases which required joint hearings was a cross border forestry case in 2012. Technically to get set up in Vancouver and New York for a simultaneous hearing was challenging. The courthouses were quite new at video conferencing and cameras did not always focus on the party speaking. Once the systems got properly synchronized though, it was pretty amazing to see applications being heard simultaneously and the decisions of both judges being rendered within moments of each other. Thankfully they both came to the same conclusion. Now, hearings can be conducted in many jurisdictions at the same time and when we look at a case like Nortel or Lehman Brothers these types of hearings are held regularly and flawlessly (almost!).
5) How has volunteering with TMA and other industry associations helped with your career and what advice would you have for young professionals in this respect?
Volunteering in professional organizations is extremely rewarding. Colleagues can turn into great clients. Without having been on the national TMA board, I would likely not have met Doug Cheyne who at the time headed up the Special Loans Group of RBC in Toronto. We dined together, played golf a few times and became friends. I started to do RBC’s work and continue to this day. He was a great contact. Volunteering is easy but you have to put up your hand. It is not difficult to take on the job with the MOST responsibility. Usually people don’t want them. With the appropriate effort, they can be the most rewarding. In our world, we have tons of opportunity … the local and national branches of the Insolvency Subsection of the CBA is a great place to meet lawyers from other Canadian jurisdictions. CAIRP or ARIL are always looking for people to write papers or speak at conferences. Local Chambers of Commerce or Boards of Trade will welcome speakers on current economic conditions. IBA, ABI, ACG, CFA, RMA, Bankruptcy Judges, TMA, etc., etc. We are blessed to have so many choices. Consider picking one or two and go deep into the organization – become the leader!
6) Who was the most interesting person you met on the international insolvency scene?
While involved with TMA we had some big budgets for some big name speakers. The most interesting people I met while President or Chairman of TMA were: General Colin Powell, Tony Blair, F.W. DeKlerk, David Feherty, Dana Carvie, Bob Woodward and Rudy Giuliani. All were great and interesting and all had one thing in common … they were really interested in our world of insolvency and restructuring.