Companies restructuring under the Companies’ Creditors Arrangement Act (“CCAA”) depend on a supply of critical products and services in order to continue operations during the proceedings. An interruption in the supply of such goods and services would likely be fatal to any restructuring. Prior to 2009, the CCAA was silent about how the post-filing supply… Continue Reading
Category Archives: Priorities
Subscribe to Priorities RSS FeedThird Party Benefit Providers Get Super Priority Secured Claim for Unpaid Remittances Owed by Employer
Posted in Bankruptcy, Priorities, Wage Earner Protection ProgramSynopsis In the latest decision of the British Columbia Supreme Court (the “Court”) regarding the bankruptcy of Ted LeRoy Trucking Ltd. (“TLT”), the Court found that unpaid remittances owed by TLT to third party benefit providers constituted “wages” within the meaning of the Bankruptcy and Insolvency Act (“BIA). This entitled the benefit providers to super… Continue Reading
Superior Court of Québec Refuses to Apply Indalex
Posted in Bankruptcy, PrioritiesIn April 2011, the Ontario Court of Appeal rendered a unanimous judgment in Re Indalex Limited which ordered that the amount the debtor was required to contribute towards its pension plan wind up deficiency be paid in higher priority to repayments to its interim (DIP) lender. This judgment was a departure from prior law and… Continue Reading
Proposed Financial System Review Act to Address Priority of Bank Act Security.
Posted in Bank Act, PrioritiesThe Bank Act (Canada) (the “Act”) and a number of other federal statutes relating to financial institutions must, by law, be reviewed every five years. The most recent review process has culminated in Bill S-5 (the Bill) which is entitled the Financial System Review Act (the FSRA).The Bill had first reading in the Senate on… Continue Reading
Supreme Court of Canada ruling in fraud case provides comfort to lenders
Posted in PrioritiesIn a contest between two innocent creditors over the proceeds of shares credited to an investment account which were traceable to fraudulently obtained funds, the Supreme Court of Canada held in favour of the Bank of Montreal (“BMO”), a secured creditor. The decision should provide lenders with a degree of comfort where it is later… Continue Reading
Intercreditor Agreements – Ontario Court of Appeal Considers Circular Priorities
Posted in Intercreditor, PrioritiesA recent decision of the Ontario Court of Appeal illustrates that secured creditors should address their priority position relative to all other creditors of their borrower in order to achieve a complete subordination of competing security. Failure to do so in this case resulted in circular priorities that the Court was left to resolve. In… Continue Reading
Super-Priorities: Update Regarding”Wages” Under the Wage Earner Protection Program Act
Posted in Bankruptcy, Priorities, Wage Earner Protection ProgramIn May of 2010, we reported on the decision of the British Columbia Court of Appeal in Ted Leroy Trucking v. Century Services Inc. In that decision, the Court of Appeal upheld a decision of the B.C. Supreme Court which determined that employee “wages” recoverable under the Wage Earner Protection Program Act (Canada) ("WEPPA") include… Continue Reading
Inadvertent Subordination Under the PPSA
Posted in PPSA, PrioritiesSection 38 of the Ontario Personal Property Security Act (the "Act") contains an exception to the general priority scheme of the Act. It provides that a secured creditor may, in the relevant security agreement or otherwise, subordinate its security interest to any other security interest, and that such subordination will be effective according to its… Continue Reading
PPSA Case Alert – What’s in a Name?
Posted in PPSA, PrioritiesThe decision of the Ontario Court of Appeal in Fairbanx v. Royal Bank of Canada contains some useful information about how courts view inaccurate debtor names in financing statements and their approach to s. 46(4) of the Personal Property Security Act (Ontario)(“PPSA”) regarding materially misleading filings. The case also reminds secured parties to use a… Continue Reading
Super-Priorities: B.C. Court of Appeal Considers Scope of Wages under WEPPA
Posted in Bankruptcy, Priorities, Wage Earner Protection ProgramIn its recent decision in Ted Leroy Trucking v. Century Services Inc., the Court of Appeal for British Columbia upheld a decision of that province’s Supreme Court which determined that employee “wages” recoverable under the Wage Earner Protection Program Act (Canada) ("WEPPA") include components from an employee’s compensation package that are remitted by an employer to third… Continue Reading