Publications
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Tax Aspects of Insolvency and Bankruptcy
The current crisis caused by the COVID-19 pandemic has already caused, and will continue to cause, significant liquidity problems for some businesses. Companies whose financial difficulties threaten their very existence will have to restructure in order to avoid bankruptcy, either by availing (…)
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Artificial Intelligence and the 2017 Canadian Budget: is your business ready?
The March 22, 2017 Budget of the Government of Canada, through its “Innovation and Skills Plan” (http://www.budget.gc.ca/2017/docs/plan/budget-2017-en.pdf) mentions that Canadian academic and research leadership in artificial intelligence will be translated into a more innovative economy and (…)
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Farmers, drivers and debtors: The Supreme Court considers the conflicts between the Bankruptcy and Insolvency Act and several provincial statutes
On November 14, 2015, the Supreme Court of Canada rendered three decisions on the application of the the Bankruptcy and Insolvency Act, RSC 1985, c. B-3 (BIA) and its interaction with certain provincial statutes. OVERVIEW OF THE FACTS In Saskatchewan (Attorney General) v. Lemare Lake Logging Ltd. (…)
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The interim receiver: A “Trustee in Bankruptcy” dispensed from obtaining a clearance certificate
In a judgment rendered in the case of 9210-6905 Québec Inc. (proposal of),1 the Superior Court of Québec held that an interim receiver is not required to obtain a clearance certificate from the tax authorities before proceeding with the distribution of a debtor's property, and is not subject to (…)
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Bitter Bidder Better Stand?
Bloom Lake, G.P.L. (Arrangement of), 2015 QCCS 1920In May 2010, Justice Gascon of the Superior Court of Québec issued an important decision in AbitibiBowater Inc. (Arrangement relatif à)1. The context was that of a motion for authorization of the sale of assets owned by AbitibiBowater, following the latter’s restructuring under the Companies’ (…)
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Class Actions : The Conversion Rate Tale Reaches it's Final Chapter
This publication was authored by Luc Thibaudeau, former partner of Lavery and now judge in the Civil Division of the Court of Québec, District of Longueuil. On September 19, 2014, the Supreme Court of Canada issued its ruling in the so called “banks’ cases”1, in the context of which consumers (…)
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Does the federal pension deemed trust outrank a perfected security interest in the context of CCAA proceedings? The Superior Court of Québec weighs in
In the last few years, pension deemed trust issues have been a subject of debate before the courts. The Supreme Court of Canada itself addressed some of these issues in the Indalex case.1 On November 20, 2013, the Honourable Justice Mark Schrager of the Superior Court of Québec rendered an important (…)
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Quarterly legal newsletter intended for accounting, management, and finance professionals, Number 21
CONTENTS The Pros and Cons of Arbitration Clauses in Commercial Contracts Pirating and Using Software Without a Licence: The BSA | The Software Alliance Case Interprovincial Taxation: The Importance of Severing Residential Ties on Departure Security Under Section 427 of the Bank Act: Do the (…)
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The Supreme Court rules in Indalex: DIP lenders rank ahead of pension beneficiaries in CCAA Restructuring
On February 1, 2013, the Supreme Court overturned a controversial decision of the Ontario Court of Appeal which granted pension beneficiaries priority over DIP lenders in the context of a restructuring under the Companies’ Creditors Arrangement Act (“CCAA”).1 The Court of (…)
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Francization – Bill No 14 amending the Charter of the French language
This publication was authored by Luc Thibaudeau, former partner of Lavery and now judge in the Civil Division of the Court of Québec, District of Longueuil. The title of this newsletter gives a good summary of the explanatory notes that serve as an introduction to Bill 14, entitled An Act to amend (…)
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The « Critical Supplier » in Québec Jurisprudence and a Québec Perspective on INDALEX
The Critical Supplier in Québec jurisprudence Superior Court refuses to import INDALEX decision into Québec Law.
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CCAA: Is the termination of employment contracts subject to section 32 CCAA?
On August 30, 2011, Hart Stores Inc./Magasins Hart inc. (hereinafter 'Hart'), filed for protection under the Companies' Creditors Arrangement Act (hereinafter the 'CCAA'). As part of the restructuring, Hart closed down 32 out of 92 points of sale and laid off 640 out of 1,600 employees. Included in (…)
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Creditors suspected of wishing to eliminate a competitor: The Court refuses to annul their votes against a plan of arrangement
On May 14, 2012, the Honourable Normand Gosselin, J.S.C., ruled on an amended motion seeking the sanction of a plan of arrangement concerning a debtor, Norgate Métal Inc. ('Norgate'). The judgment is special in that Norgate asked the Court to annul some of the votes that had been cast against the (…)
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Superior Court refuses to import Indalex decision into Québec law
On April 20, 2012, Justice Mongeon of the Québec Superior Court rendered an important decision in the restructuring of the White Birch Paper Company (“White Birch”). The judgment could have a lasting effect on CCAA jurisprudence in Québec since it deals with issues relating to the (…)
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The Doorcorp Case: The Court of Appeal renders yet another decision on section 139 BIA and the postponement of claims
Last June we discussed the Court of Appeal decision in Stonehaven Country Club, which dealt with the application of section 139 BIA to a claim by Investissement Québec. The Court of Appeal has ruled on the scope of this section once again.On April 17, 2012, the Honourable Marc Beauregard, writing (…)
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Limits of the deemed trust created under provincial tax legislation
In its judgment in the case of Banque Nationale du Canada v. Agence du Revenu du Québec, 2011 QCCA 1943, issued on October 21, 2011, the Court of Appeal of Quebec discussed two grounds of dispute that might be of interest to the hypothecary creditors of tax debtors when the tax authorities rely on (…)
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Secured or postponed: Where does the secured lender who shares?
On April 4, 2011, the Honourable Benoît Morin, speaking for the Court of Appeal, with Justices Michel Robert and Jacques A. Léger concurring, issued a judgment confirming the decision of the Superior Court rendered on April 22, 2009 by the Honourable Jean-Yves Lalonde. The case arose out of the (…)
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BIA: Equity claims in proposals – A look at new section 54.1 BIA
On October 28, 2010, Justice Yves Poirier of the Quebec Superior Court rendered a decision, which enforced the application of new section 54.1 of the Bankruptcy and Insolvency Act. The case, Aliments Möpure inc. (Avis d’intention et de proposition de) (“Möpure”), addressed the (…)
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CCAA: Bet on the right horse – the “stalking horse” in Quebec
The case of the arrangement respecting White Birch Paper (the “White Birch Group”) was one of the most significant matters brought before the Commercial Division of the Superior Court of Quebec in 2010. Not only did this matter receive a lot of attention on account of its crossborder (…)
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CCAA: The use of credit bids at an auction is scrutiniezed by Quebec Courts
In a recent decision of the Court of Appeal, the Honourable Pierre J. Dalphond confirmed that a secured creditor may use its debt to acquire the assets which are charged with its security interests in the context of a sale process monitored by the Court under the Companies’ Creditors (…)
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Bitter Bidder Bites the Dust
On May 3, 2010, Justice Clément Gascon of the Superior Court rendered an interesting decision in the context of a motion for authorization of the sale of assets in connection with a restructuring under the Companies' Creditors Arrangement Act.More specifically, the Court considered the fairness of (…)
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Plan of Arrangement Under the CCAA or Assignment in Bankruptcy Under the BIA: Which Takes Priority?
Which group of creditors is entitled to the money held by a monitor for the purposes of carrying out a plan of arrangement under the CCCA when the debtor goes bankrupt prior to the distribution: only the creditors covered by the plan of arrangement, or all of the creditors, even those not covered by (…)
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Legal Hypothecs of Construction get Priority over a Super Priority Granted by the Court for dip Financing in Respect of Certain Assets of the Bankrupted Party
Creditors petitioned the Court in order to have it amend the order of priority for payment determined by the trustee, so that their claims have priority over the super priority of the Caisse Populaire, but strictly in respect of part of the assets.
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The Interpretation of a Progress Payment by a Bankruptcy Judge Sitting in the Province of Quebec
This publication was authored by Luc Thibaudeau, former partner of Lavery and now judge in the Civil Division of the Court of Québec, District of Longueuil. A recent Superior Court decision deals with a Progress Payment Agreement and a Master Lease Agreement between a financing company, Maximum (…)
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The Partnership and the Independent Patrimony of its Partners: the Bankruptcy of Ferme C.G.R. Enr. S.E.N.C.
On April 16, 2010, the Quebec Court of Appeal issued a judgment concerning the right of a general partnership (“S.E.N.C.”) to file for assignment under the Bankruptcy and Insolvency Act without its partners having also filed for the assignment of their assets, themselves.By responding (…)
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Legal newsletter for business entrepreneurs and executives, Number 1
Can an employer trim its costs by changing one element of its employees’ remuneration ? Entering the “Zone of Insolvency“ - What to do ? Ecomonic slowdown - Some concrete financing indications and how to react