A summary of recent Canadian insolvency-focused court decisions.
How should a court deal with a receivership application when the applicant only has security over fixtures, while another party has security over the real property? The Applicant, CEF, sought the appointment of a receiver, pursuant to section 243 of the Bankruptcy and Insolvency Act and section…
Can a secured creditor be barred from making a claim in bankruptcy by a consent order made in a related receivership? The Debtor, 186 Kennedy, owned lands in Markham, Ontario (the “Property”). The court-appointed Receiver marketed and sold the Property for $47,800,000 pursuant to a…
Are arbitration agreements inoperative in insolvency proceedings? The appellant, Peace River, is a partnership formed to build a hydroelectric dam in northeastern British Columbia. The respondent, Petrowest, is an Alberta‑based construction company. In December 2015, Peace River agreed to subcontract certain work to Petrowest and its…
What is a reasonable rate to charge for a junior insolvency lawyer? Otso Gold Corp. owned mineral rights in British Columbia and, through subsidiaries, a gold mine in Finland. It was the subject of receivership proceedings in British Columbia, which have now come to an…
What factors will a court consider in competing applications for a CCAA initial order or a receivership order? On July 8, 2022, the Royal Bank of Canada applied to appoint Ernst and Young Inc. as a court-appointed receiver over all or substantially all of the…
What is the proper method of valuing the assets subject to a security interest in an insolvency? Aldo Group filed for CCAA protection in May 2020, obtained overwhelming creditor approval of its plan of arrangement (the “Plan”) in April 2022, and received sanction of the…
What factors will a court consider when the OSB contests a trustee's fees? The Office of the Superintendent of Bankruptcy contested the Trustee’s Final Statement of Receipts and Disbursements of $30,155.11, as against a recovery of the same amount. The OSB suggested a reduction of…
Will an extension to file an appeal be granted when the late filing arose from a small procedural issue? On July 22, 2022, the Court approved a sale of the petitioners’ unfinished development property to Solterra (the “Sale Order”). One of the secured creditors (“129”),…
In the Matter of the Proposal to Creditors of Conforti Holdings Limited, 2022 ONSC 5420 Can a proposal be approved if the company failed to disclose a creditor’s claim and give notice of the NOI to the creditor? Conforti operated hair salons in malls and…
Can an exercise of set-off rights be contrary to the CCAA? The Applicant, Carillion, applied for protection under the Companies’ Creditors Arrangement Act following the liquidation proceedings of its parent company in the United Kingdom. The Initial order contained a number of provisions which affected Carillion’s operations…