Category Archives: CCAA

Can an Insolvency Court Revive A Contract under the CCAA?!?

 

The court has always had the power to enforce the terms of a contract – through the remedy of specific performance or through the much lesser known/used remedy of a positive injunction. But these are usually limited in scope, and not to a terminated contract.

The passing of the Companies’ Creditors Arrangement Act (CCAA), was done to give courts broad powers to facilitate the restructuring of a company – especially big money companies. In a recent judgement, the Superior Court of Quebec revived a distribution contract, to help bring about the sale of a retailer, in lieu of the fact that the agreement was already cancelled by the manufacturer.  The court overturned a notice of termination, temporarily.

The manufacturer appealed, and the court of appeal denied leave to appeal on the basis of expediency and from a procedural standpoint. It is an interesting issue, because it would seem that the court will have constitutional issues and procedural problems in allowing such an order. The temporary suspension is due to expire on June 28, 2013, so it will be interesting to see how the Quebec Superior court revisits the issue…

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