Bankruptcy and Insolvency

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.

Category: Bankruptcy and Insolvency

Bankruptcy and Student Loan Debts: An Ongoing Problem

Classifying Creditors under the Companies’ Creditors Arrangement Act