The Insolvency Institute of Canada presents the results of its study into how many Canadian insolvencies have been due to the Covid-19 pandemic, with the biggest takeaway being that Covid-19 has not yet had the massive impact that was expected and was the primary factor for the insolvency in only 15% of the filings.
A curation of recent Canadian insolvency-focused articles.
Vanessa Mensink, Dana Nowak and William Skelly of MLT Aikins tell the tale of the unusual proceedings of EncoreFX, where a bankruptcy (and not a proposal) under the BIA was converted into a CCAA proceeding.
Luc Morin and Arad Mojtahedi of Norton Rose Fulbright share that the SCC has rejected leave to appeal in the restructuring proceedings of Nemaska Lithium and as such, the RVO transaction on this file remains the first of its kind to withstand judicial scrutiny in Canada.
Romain Viel, Hilary Gilroy and Colin Boyd of McInnes Cooper discuss the key takeaways from the Supreme Court of Canada's decision in Chandos Construction Ltd. v. Deloitte Restructuring Inc. and provide guidance on the precise scope of the anti-deprivation rule, including the types of clauses that would not violate the rule.
Sylvain Rigaud, Arad Mojtahedi and Saam Pousht-Mashhad of Norton Rose Fulbright analyze the recently released written reasons in the Bluberi case, noting that the unanimous decision of the Supreme Court, penned by Chief Justice Wagner and Justice Moldaver, reverses the decision of the Québec Court of Appeal, reinstates the supervising judge’s order, and enshrines the recognition of an insolvency court’s wide discretion to, inter alia, approve a litigating funding agreement as interim financing, and to prevent a creditor from voting on a plan where it is found that said creditor is acting for an improper purpose.
James Clark of Stern Landesman Clark reminds trustees that arm's length parties can have non-arms length dealings and reviews the factors to be considered when attacking commercially unreasonable transactions between these parties.
Puya Fesharaki and Stephanie Sonawane of TGF use a recent decision to remind insolvency practitioners that they should always have sufficient evidence to justify why a court-appointed receivership is necessary instead of a private receivership.
Sylvain Rigaud, Arad Mojtahedi and Saam Pousht-Mashhad of Norton Rose Fulbright share the news that the Supreme Court of Canada has unanimously allowed the appeal in the Bluberi v. Callidus case, which cements the use of litigation funding in the insolvency context and confirms that the CCAA judge has the discretion to determine whether a litigation funding agreement should be put to a creditors’ vote.
Richard Williams of James Williams & Associates alerts readers to new regulations that bring into question whether existing protections under the BIA and model orders are sufficient to protect trustees from liability associated with the inadvertent release of personal information.
Ari Sorek of Dentons provides welcome news for DIP lenders and restructuring professionals, summarizing a recent ruling that appears to be the first one in Canada wherein a court was tasked with adjudicating competing claims between post-filing creditors and the beneficiary of a CCAA charge