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ABI Committee News

Cross-Border Group Filing: “COMI” in Canada Takes Shape (and Comes Full Circle)

R. Graham Phoenix

The recent Ontario case of Massachusetts Elephant & Castle Group Inc., Re[1] provides clear guidance as to what factors should be considered of primary importance by the Canadian bankruptcy courts when determining COMI, both generally and in the context of a group filing.

In September 2009, Canada’s bankruptcy and insolvency laws underwent a significant transformation. As part of sweeping amendments, the Companies’ Creditors Arrangement Act (“CCAA” or the “Act”)[2] — the statute governing “chapter 11 style” restructurings in Canada — was amended to adopt provisions similar to the UNCITRAL Model Law on Cross-Border Insolvency. These provisions are found in Part IV[3] of the CCAA. They are similar to chapter 15 in the US Bankruptcy Code, with certain nuanced differences.

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Foreign Debtors Get Green Light to Sue U.S. Companies

Recent court decisions, in the context of chapter 15 of the U.S. Bankruptcy Code, signal the U.S.’s “open door” policy to lawsuits by foreign debtors. To provide a bit of background, chapter 15 of the U.S. Bankruptcy Code relates to international insolvency proceedings; specifically it regulates bankruptcy proceedings filed in the U.S. that are “ancillary” to an insolvency proceeding in another country. The need for chapter 15 arises from the reality that many insolvent companies have assets, liabilities and claims in multiple countries, including in the U.S. Based on the United Nations’ Model Law on Cross-Border Insolvencies, chapter 15 was enacted to promote cooperation between U.S. courts and foreign courts during international insolvency proceedings and to promote greater legal certainty for trade and investment.

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Last Chance to Register - Join us in Toronto for the Cross-Border Insolvency Symposium

ABI's 2012 Caribbean Insolvency Symposium Will Be Held in Puerto Rico

ABI is pleased to invite you to attend the 2012 Caribbean Insolvency Symposium at the El San Juan Resort & Casino on the wonderful island of Puerto Rico. Back for a third time to Puerto Rico and the second time to team up with the Puerto Rico Bankruptcy Bar Association, the educational program has been developed to provide attendees with an interactive learning experience led by a faculty of prominent national and regional bankruptcy judges, as well as experienced practitioners. Offering both Consumer and Business Tracks, the symposium provides excellent opportunities for business development and renewing friendships among the ABI extended family while earning CLE/CPE credit. Consumer track registrants receive a complimentary copy of Chapter 13 in 13 Chapters. Click here to register for the 2012 Caribbean Insolvency Symposium.

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