A summary of recent Canadian insolvency-focused court decisions.
Is a receiver a successor employer subject to the collective bargaining rights of employees? Rose of Sharon operated a 60-bed long-term care facility on Maplewood Avenue in Toronto. United Food and Commercial Workers International Union, Local 175 (the “Union”) was certified as bargaining agent for…
What factors will a court consider on competing applications to terminate or extend the period to make a proposal? A recent Alberta decision considers the factors a court will consider on competing applications brought by the debtor to extend the period to make a proposal…
Can a debtor avoid a receivership if it has a reasonable plan for moving forward? The applicant, Meridian, sought an order pursuant to s. 243(1) of the Bankruptcy and Insolvency Act and s. 10 of the Ontario Courts of Justice Act, appointing a receiver and manager over all…
Can a statute-barred claim still be a provable claim in bankruptcy if it was included on the debtor's statement of affairs? The bankrupt gave the appellant a promissory note in the amount of $250,000 dated April 10, 2001 due on October 10, 2001. On September…
Does the duty of good faith extend to contract disclaimers? Laurentian University (“Laurentian”) experienced a financial crisis and sought protection under the Companies’ Creditors Arrangement Act. Since February 1, 2021, Laurentian has undergone an overhaul of its entire financial and operational structure in order to create…
Is pre-bankruptcy defamatory conduct a bar to discharge? The Bankrupt brought an application for an absolute discharge. One of his creditors, who obtained a judgment and costs against him in a defamation action, opposed the discharge. The proven claims in his bankruptcy consisted of the…
Can a declaration under s. 178 of the Bankruptcy and Insolvency Act be made on a motion for default judgment?
What is the test for the transfer of bankruptcy proceedings to another court? The husband and wife married in September 2002 and separated in September 2018. After immigrating to Canada, the husband incorporated Cellicon for the purpose of operating his cell phone business. Because of…
Does a consent judgment on a fraud action with no mention of fraud on its face survive bankruptcy? MOS is a licenced mortgage brokerage. It held a third charge against a property owned by Heidary. MOS and Heidary agreed to the terms of a new…
Should senior secured lenders be placed in a separate class from subordinate secured lenders?