Nov. 18, 2016
Cross-border recognition proceedings are becoming increasingly prominent for the Canadian insolvency Bar, and more American courts are turning to Canadian bankruptcy law for its unique advantages, according to an article in Lexpert. In his article, author Julius Melnitzer cites the Lac-Mégantic rail disaster — which resulted in substantial losses of life and infrastructure — and the ensuing settlement that was reached as an example of seamless cross-border cooperation between courts in Canada and the U.S. Sandra Abitan, a partner in Osler’s Insolvency and Restructuring Group, says the Canadian bankruptcy law concept of a “monitor” — something unfamiliar to U.S. law — helped facilitate the process of brokering a settlement.
“Because monitors are court-appointed officers who are the eyes and ears of the court, they have a special standing and engender a great deal of respect and are in excellent position to broker settlements,” Sandra tells Lexpert. She adds that “the case would have gone on much longer in the U.S. than the two years it took to settle here.”
Sandra also says she is expecting more standard insolvency and restructuring activity moving forward.
“Companies have been selling assets, avoiding fire sales and keeping the lights on, but they may not be able to continue that for much longer,” Sandra tells Lexpert.
For more information, read Julius Melnitzer’s article “Recognition and Distressed Energy” in Lexpert.