Packed with valuable information, our publications help you stay in touch with the latest developments in the fields of law affecting you, whatever your sector of activity. Our professionals are committed to keeping you informed of breaking legal news through their analysis of recent judgments, amendments, laws, and regulations.

Advanced search
  • 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 plan of arrangement. Norgate submitted that the only reason why the creditors who cast those votes had voted against the plan was that they wished to eliminate a competitor from their industry.Norgate operates in the construction industry and filed for protection under the Companies’ Creditors Arrangement Act (the 'CCAA') in November 2011. In February 2012, Norgate filed its plan of arrangement and the meeting of the creditors was called for March 22, 2012. The plan of arrangement provided for division of the unsecured creditors into two classes, that is the protected creditors and the unprotected creditors. The protected creditors were likely to be paid 100% of the amount of their claims while the unprotected creditors could only hope to recover about 7%.

    Read more
  • 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 pension plans of insolvent companies and the applicability of an important decision of the Ontario Court of Appeal in Québec.

    Read more
  • 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 for the Court of Appeal with Justices Marie-France Bich and Jean Bouchard concurring, quashed in part the Superior Court decision rendered by the Honourable Pierre Journet dated June 11, 2010. This case involved the bankruptcy of Doorcorp Installations Inc. (“Doorcorp”). In it, the Court of Appeal examined the characterization of advances of funds by Ballylickey Investments (“Ballylickey”) to Doorcorp. Given that Ballylickey is the parent company and sole shareholder of Doorcorp, did the advances constitute claims falling under section 139 of the Bankruptcy and Insolvency Act (“BIA”), i.e. postponed claims, or were they claims that should be ranked with those of the unsecured creditors?

    Read more
  • 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 provincial statutory provisions pertaining to deemed trusts, namely : the limits of the scope of the deemed trust; and the estoppel.

    Read more
  • 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 bankruptcy of Stonehaven Country Club Resort & Spa L.P.; the Court had to rule on the validity of Investissement Québec’s claim against the bankrupt company. More specifically, the Court of Appeal reviewed the scope of section 139 of the Bankruptcy and Insolvency Act, which provides that in the event of the bankruptcy of a borrower, the claim of a lender who has contracted to receive a rate of interest varying with the profits, or a share of the profits arising from carrying on the trade or business, cannot be recovered until the claims of all other creditors have been satisfied. The Court had to determine whether this rule applied to Investissement Québec, whose hypothecary loan contained a clause whereby a premium was payable to it according to the profits of the business.

    Read more
  • 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 question of whether a creditor advancing an equity claim has the right to vote at creditors’ meetings. More specifically, the case discusses the scope of the Court’s discretionary powers in granting or annulling an equity claimant’s right to vote at such meetings.

    Read more
  • 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 aspect and the number of parties involved, it also constituted a precedent for sales of assets under the new provisions of the Companies' Creditors Arrangement Act (the “CCAA”). In particular, Mr. Justice Robert Mongeon approved a relatively complex process for the solicitation of offers and the sale of assets based on the American “stalking horse” method and allowed a secured creditor to use the secured portion of his debt to bid on the assets offered for sale (“credit bidding”). While credit bidding is the subject of another In Fact and In Law bulletin, this article is intended to focus on the use of the stalking horse method.

    Read more
  • 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 the sale process and a rejected bidder's legal standing to intervene in and contest the approval of the sale sought by this bidder.

    Read more
  • 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 the plan, for example, subsequent creditors?This controversial issue was considered by Judge Jean-Yves Lalonde in the matter of the bankruptcy of Ressources Meston Inc. He concluded that such amounts are vested exclusively in the creditors covered by the plan of arrangement.

    Read more
1 2 3