A supplier takes an order, delivers goods, issues an invoice and waits to be paid. The purchaser subsequently goes into bankruptcy or receivership. What chance does the supplier have to recoup the loss?
Based on numbers recently released by the federal Office of the Superintendent of Bankruptcy (OSB), total insolvency rates in Alberta spiked 43.5 per cent over the twelve-month period ending in the first quarter of this year. In contrast, the country-wide rate of increase during the same period was 3.7 per cent
In May 2016, after much anticipation, the reasons for judgment in a closely-watched Alberta court case, Redwater Energy Corporation, were released. The judgment addresses the clash between provincial and federal legislation. The implications of the judgment have the industry abuzz over the way receiverships and bankruptcies of oil and gas companies are now likely to proceed in the province.
The restructuring options for a company in financial distress are varied. In some cases the debtor company may know exactly what it will do to restructure its operations and what compromises it will ask creditors to make in order for the debtor company to continue in business. At other times there may be more uncertainty. The debtor company may need to invite interest in its business and assets. Walter Energy is a case in point.
In our previous posts, here and here, we discussed some of the rules and formalities surrounding a commercial landlord's right to distress when a tenant defaults on rent. In this week's post, we will focus on further cautions to heed before seizing a tenant's goods as a means to recover arrears in rent. A number of these considerations revolve around the timing of events.