Case considered: Budget Waste Inc., Re, 2009 ABQB 752.
PDF version: Restructuring under the CCAA: Should A Debtor Always Be Allowed to Proceed?
LoVecchio J.’s decision in Budget Waste Inc., Re (“Budget Waste“) is a great example of the questions courts need to keep in mind as they are deciding on issues that arise in the context of restructuring proceedings under the Companies’ Creditors Arrangement Act, R.S.C. 1985, c. C-36 (“CCAA“).
PDF version: The GM Saga So Far
The current financial crisis is arguably the largest corporate debacle and multi-market crash since the Great Depression. Its costs for corporations are substantial and many high profile companies have filed for bankruptcy protection under Chapter 11 (U.S. Code, Title 11, Chapter 11) or the Companies’ Creditors Arrangement Act (R.S., 1985, c. C-36) (“CCAA“). In the United States and elsewhere, this has even affected financial institutions, institutions previously viewed as “too big to fail”, namely AIG, Citigroup, Bear Stearns, IndyMac Bank, F.S.B. (the second largest bank failure in U.S. history), Federal National Mortgage Association (Fannie Mae), Federal Home Loan Mortgage Corporation (Freddie Mac), Lehman Brothers, and Wells Fargo. To date, many Canadian corporations have filed for CCAA protection.
Cases Considered: Devon Canada Corporation v. PE-Pittsfield, LLC, 2008 ABCA 393.
PDF Version: Limited Partnerships: Devon Canada Corporation v. PE-Pittsfield, LLC
In Devon Canada Corporation v. PE-Pittsfield, LLC, the Alberta Court of Appeal clarified the law respecting foreign limited partnerships and discovery of limited partners in two respects. First, it determined that limited partners cannot be examined when the limited partnership is named as a defendant in an action. Second, it determined that a foreign, unregistered limited partnership has the same rights and obligations of a limited partnership under Alberta law.
Cases Considered: Mainstreet Hair Salon 1992 Ltd. v. Schumaker, 2008 ABQB 363
PDF Version: Bankruptcy and Student Loan Debts: An Ongoing Problem
Many individuals would be unable to undertake post-secondary education without assistance in the form of student loans for tuition payments and living expenses. Last year, about 350,000 college and university students relied on federal student loans worth $1.9 billion (K. Pinchin, “Government Accused of Milking Student Loan Plan,” Globe and Mail, July 22, 2007). The fact remains, however, that many students are unable to repay the loan upon graduation, and even an assignment in bankruptcy fails to discharge the debt. This comment discusses the difficulty surrounding the student loan and bankruptcy issue and determines that an answer satisfactory to all sides has yet to be reached.
Cases Considered: Kerr Interior Systems Ltd. (Re), 2008 ABQB 286
PDF Version: Classifying Creditors under the Companies’ Creditors Arrangement Act
In an application for an order to sanction a Plan of Arrangement (Plan), the Alberta Court of Queen’s Bench refused to allow the two protesting creditors to form their own class for the purpose of voting on the Plan in Kerr Interior Systems Ltd. (Re). For the purpose of this post, I will lay out the facts then focus on the principles underlying the classification of creditors under the Companies’ Creditors Arrangement Act, R.S.C. 1985, c. C-36 (CCAA). Pursuant to section 4 CCAA, different classes of unsecured creditors can be created, such that each class would have a separate vote on whether to approve a Plan. This case is one of the most recent to deal with the technical and difficult issue regarding the classification of creditors and Madam Justice M.B. Bielby provides a thorough discussion of the principles that need to be considered before a court will sanction a plan of arrangement.
