In a judgment pronounced December 16, 2010, the Supreme Court of Canada has, for the first time, interpreted key provisions of the Companies’ Creditors Arrangement Act (“CCAA”). Fraser Milner Casgrain LLP (FMC), one of Canada’s leading business and litigation law firms, successfully represented Century Services Inc. in the case of Century Services Inc. v. Canada (Attorney General), 2010 SCC 60.
FMC, on behalf of Century Services Inc., appealed a decision of the British Columbia Court of Appeal which reversed a lower court’s decision to dismiss the Crown’s application for payment of unremitted GST taxes. The Supreme Court of Canada, in a majority decision of seven justices, allowed the appeal of the secured creditor, who was next in line for the funds in question.
“This is a substantial win for FMC’s Insolvency and Restructuring Group,” says John Sandrelli, Managing Partner at FMC Vancouver. “Mary Buttery, Owen James and Matthew Curtis were able to achieve the optimal legal outcome aligned with the client’s business priorities.”
The judgment of the Court overrules appellate authority from Ontario and British Columbia that previously conferred a priority for unremitted GST to the Crown in CCAA proceedings.
The Supreme Court of Canada also provided guidance on the discretionary powers of a court supervising a CCAA reorganization. The Court clarified that, in determining what orders a court should make in the course of a restructuring, the key is whether the order will further efforts to achieve the remedial purpose of the CCAA, which is to avoid the social and economic losses resulting from bankruptcy of an insolvent company.
For more information on this case, please click here.
For further information please contact:
Jennifer Dales
FMC
+1 416 862 3405
jennifer.dales@fmc-law.com
Kelly Olive
MAVERICK PR
+1 416 640 5525, ext. 230
kellyo@maverickpr.com