A summary of recent Canadian insolvency-focused court decisions.
Will the court allow modifications to prescribed creditor notifications in CCAA proceedings? MEI was a multi-service food business, which operated six restaurants, two food-hall locations and one gourmet grocery location. It had been experiencing financial challenges for an extended period of time as a result…
Will a court stay a sales process pending arbitration over an interest in the subject real estate? This motion arose out of long-running CCAA proceedings involving a group of companies ultimately owned by Urbancorp. Downsview, being the Foreign Representative of Urbancorp, sought a stay pending its…
Can student loan debt be discharged in bankruptcy? The Debtor successfully completed a consumer proposal under the Bankruptcy and Insolvency Act, and brought an application respecting the discharge of her outstanding student loan debt. Pursuant to s. 178(1)(g)(ii) of the BIA, such a debt is not…
What is the test for a stay pending an appeal in an insolvency proceeding? DGDP applied for a stay of two orders approving the sale transaction of assets and granting the gross overriding royalty from the prospective purchaser to DGDP. Prior to the granting of…
Does a CCAA debtor have standing to oppose a sale of its assets to a competitor? The petitioners were two companies which were involved in the business of selling telephone services. The Monitor had previously effected, with court approval, sales of two tranches of the…
Are EI overpayments discharged in a bankruptcy? The bankrupt filed her second bankruptcy on September 22, 2017 (her first, from 2006, ended in an automatic discharge nine months later). Of her $58,499 in declared total debt (all unsecured), $32,000 was an Employment Insurance (EI) overpayment.…
Is a purchaser or a ResidualCo entitled to a tax refund of the debtor? PwC as Monitor of 124 Canada Inc. brought a motion for declaratory relief about entitlement to HST refunds with a value of approximately $456,429.42. The issue arose in connection with a company…
Does a CCAA court in one province have jurisdiction to hear a motion under the CBCA when CBCA proceedings have been commenced in another province? On June 29, 2018, the Quebec CCAA Court issued an Order sanctioning the Joint Plan of Compromise and Arrangement that…
Does a stay of proceedings suspend the running of a limitation period? The Applicants – freehold owners of mines and mineral rights on certain lands and the lessors of petroleum and natural gas leases that affect the lands – sought to lift the stays granted…
Can a bankrupt revoke a discharge to sue a trustee? In July 2013, the appellant McKibbon made an assignment into bankruptcy. BDO acted as the corporate trustee. During the administration, issues arose in calculating the appellant’s surplus income and tax payable to Canada Revenue Agency.…